Looking for an Employer of Record in the Czech Republic? Here’s what you need to know

The Czech Republic’s local labor laws govern how businesses can hire and pay employees in the Czech Republic. All companies, whether based in the Czech Republic or beyond, must comply with these laws, and the law can be complex to navigate and prone to change. 

In the Czech Republic, Employer of Record models may not be permitted. However, a Temporary Work Agency, like Payoneer Workforce Management, can help streamline the process of engaging local talent.

Looking to simplify hiring in the Czech Republic? Payoneer Workforce Management can help. Get in touch today or keep reading to find out what the Czech Republic payroll involves.

How to hire employees in the Czech Republic

Companies can engage and pay employees in the Czech Republic using one of three routes:

1. Set up a local entity: Once you’ve established a legal entity, employers are free to hire and manage teams directly in the Czech Republic, much like you can on home soil. This provides operational control but takes time and money to complete.

2. Hire independent contractors and freelancers: A legal entity isn’t required to hire contractors or freelancers in the Czech Republic. However, contracts with these workers must be short-term or project-based, or you risk misclassification and penalties.

3. Temporary Work Agency: Partnering with a Temporary Work Agency allows companies to engage and pay employees in the Czech Republic without a local entity.

Payoneer Workforce Management helps streamline the process in the Czech Republic. We enable compliant onboarding and engagement of talent in 160+ countries without having to set up a legal entity, and we can assist you in mitigating risks related to contractor misclassification.

How to onboard employees in the Czech Republic

International workers can have additional onboarding needs, and it is essential to address them for a seamless onboarding.

The employee onboarding process typically covers:

• Setting up payroll and statutory benefits: Add the local candidates to the payroll system and complete all mandatory benefit enrollments required by regional labor laws.
• Providing equipment and preparing the work environment: Ensure the employee receives the necessary devices, tools, and access so they can begin working without delays.
• Delivering a first‑week onboarding session: Guide the employee through key company procedures, onboarding steps, and expectations for their role during their initial week.
• Facilitating team and organizational introductions: Arrange meetings that help the onboarded candidate get acquainted with their immediate team and connect with colleagues throughout the organization.

Payoneer Workforce Management enables companies to compliantly engage talent across borders through its technology platform.

Pay employees in the Czech Republic

Employers must pay employees in the Czech Republic in korunas (CZK). Payroll cycles run in arrears, and salaries are paid on the 15th of the following month. 

Minimum wage in the Czech Republic is CZK 22,400 per month, which is CZK 134.40 per hour. There is no legal requirement for 13th-month or annual bonuses to be paid.

Czech Republic taxation

Individual income tax in the Czech Republic is progressive, with a rate of 15% applied to annual income up to CZK 1,676,052 and a higher rate of 23% applied to income exceeding CZK 1,676,052.

Employers are also responsible for contributions towards social security (which covers the state pension scheme, sickness insurance, and state employment policy contributions) and public health insurance (which provides free medical treatment to Czech citizens, permanent residents, and foreigners working).

Payoneer Workforce Management’s unified, all-in-one platform gives you a single dashboard to manage the global workforce.

Employment laws in the Czech Republic

Below are the labor laws to follow to hire and pay employees in the Czech Republic compliantly.

• Working hours: Employees usually work 40 hours in a standard week.
• Overtime hours: Overtime is limited to 150 hours per calendar year, and should not exceed 8 hours per week on average. Additional overtime (beyond 150 hours per year) may be agreed upon between both parties up to a maximum of 416 hours per year.
• Overtime pay: Overtime pay is due on any hours above 40 per week. This is calculated at 125% of the worker’s average monthly wage per hour.

Get support to stay compliant with local labor laws using Payoneer Workforce Management’s infrastructure.

Minimum wage in the Czech Republic

As of January 2026, the minimum wage in the Czech Republic is CZK 22,400 per month, which is CZK 134.40 per hour. 

As the minimum wage in the Czech Republic is usually reviewed yearly, it’s advised to check back with government websites for the latest wage requirements.

Employment contracts in the Czech Republic 

Czech Republic payroll and labor laws dictate that an employment contract should be provided in writing.

According to the Labour Code, this document should cover:

• The type of work the worker is to perform
• The place of work
• The start date of the employment.

The employment contract may also define the length of the trial or probationary period, salary, weekly working hours, and the type of contract.

Onboard talent quickly and securely with localized contracts and payroll using Payoner Workforce Management as your Temporary Work Agency.

Leave policy in the Czech Republic

In the Czech Republic, employers must offer leave, including vacation time, public holidays, sick leave, and more.

Vacation leave and public holidays

Employees in the Czech Republic are entitled to a minimum of 20 working days of vacation leave per year, in addition to 13 public holidays. Vacation leave should be taken in the year it accrues. If this isn’t possible, the unused portion can be carried into the following calendar year.

Where prior-year leave remains unscheduled, the employer should determine its use by June 30th of the following calendar year. If the employer fails to do so, the responsibility passes back to the employee. Employees must give at least 14 days’ notice of taking unused leave (unless a shorter notice period is agreed).

Sick leave

Employees in the Czech Republic may take up to 380 days of sick leave.

The employer pays the employee sick pay (60% of reduced salary earnings) for the first 14 days of sickness. Starting from the 15th day, employees receive sick pay from the government instead.

Parental leave

Maternity leave in the Czech Republic lasts for 28 weeks, or 37 weeks in the case of multiple births. It can begin up to 6 to 8 weeks before the due date. Paternity leave is 2 weeks (14 calendar days) and must be taken within 6 weeks of the child’s birth.

Either parent is entitled to parental leave to care for a child until the child is 3. Unpaid parental leave may be taken with the employer’s consent until the child is 4.

Bereavement leave

In the event of the death of a spouse, partner, or child, employees are entitled to 2 paid days of leave plus 1 additional paid day to attend the funeral, totaling 3 paid days. For the death of a parent, grandparent, sibling, or grandchild, they receive 1 paid day of leave plus 1 additional paid day if they are responsible for arranging the funeral.

Owing to recent policy updates, up to 5 additional unpaid days may be granted for close family losses. 

Wedding leave

An employee can be granted wedding leave under the following circumstances:

Occasion	Leave allocation
Employee’s own wedding	2 days off (the day of the ceremony is paid, the other is not)
Employee’s child’s wedding	1 paid day to attend
Employee’s parent’s wedding	1 unpaid day to attend

Work permit in the Czech Republic 

Non-nationals may require a work permit in the Czech Republic. This must be granted by the Labour Office and is typically non-transferable between positions or employers. 

Permit requirements and permissions may differ based on the employee’s nationality. Check the Ministry of Labour and Social Affairs website for more information.

Background check in the Czech Republic

Background checks are key for due diligence when engaging international talent. A background check may review a potential candidate’s education, employment history, employment references, and social media. A criminal record check could also be essential for the role.

Employers may have to obtain consent and disclose what information will be processed before the background check is performed.

Employment termination in the Czech Republic

In the Czech Republic, employers can only terminate employees based on valid grounds. Termination without valid grounds may be considered unfair dismissal, which causes legal issues for the employer. 

Valid grounds for termination include:

• Employee resignation
• Mutual agreement between the employer and the employee
• Termination within the probationary period
• Termination by the employer due to misconduct, performance issues, absence without leave, etc.

Termination notice

In the Czech Republic, contracts can be terminated with immediate effect during the probationary period, although it’s recommended to give at least 7 days’ notice

After probation has ended, a 2-month notice must be given to terminate the contract.

Severance pay

If severance pay is owed, the amount is calculated based on the employee’s tenure

Tenure	Severance pay
Less than 1 year	1 month’s salary
1 to 2 years	2 months’ salary
2 years or more	3 month’s salary

If a contract is terminated for health reasons, a severance of 12 times the employee’s average earnings is due. This is a legal requirement unless the employer has been found not liable, according to a medical certificate issued by an occupational medical services provider or according to a ruling of the competent administrative agency having reviewed the medical certificate.

Company registration in the Czech Republic

If you foresee the Czech Republic becoming a key market for your work, you may wish to explore company registration. Details on how to incorporate in the Czech Republic can be found on the government website.

For most businesses looking to engage and pay employees in the Czech Republic, this isn’t necessary. A Temporary Work Agency offers a quicker way to engage talent and expand into the market.

Payoneer Workforce Management enables compliant onboarding and engagement of talent in 160+ countries without having to set up a legal entity.

PEO in the Czech Republic

A PEO is designed to help you with HR and admin tasks for employees you already employ through your local entity.

While some countries allow the use of EORs, in the Czech Republic, companies may use a Temporary Work Agency like Payoneer Workforce Management instead. Our platform helps manage HR and compliance processes for companies without a local entity. This is invaluable for international companies seeking expansion into the Czech Republic.

Explore Payoneer Workforce Management services in the Czech Republic

Working with a partner like Payoneer Workforce Management helps support global operations and access local talent. 

With our unified platform, you can get assistance with:

• Onboarding & offboarding
• Payroll and taxes
• Benefits administration
• Timesheets and more

Book a demo to find out more.

FAQs

1) Are EORs legal in the Czech Republic?

An Employer of Record in the Czech Republic may not be an applicable model. Companies may use a Temporary Work Agency, like Payoneer Workforce Management, instead. Our unified platform enables companies to compliantly engage talent across borders through its technology platform.

2) How much does it cost to hire Czech talent?

Employers may typically expect to pay around 35.80% on an annual salary of USD 60,000. The total cost may depend on employee salary and other local factors. 

Head to our cost calculator tool for a detailed employment cost breakdown.

3) Why hire Czech talent through a Temporary Work Agency?

A Temporary Work Agency, like Payoneer Workforce Management, allows companies to onboard and pay employees across the globe in 70+ currencies, without setting up a local entity.