Ministry of Labour and Social Affairs retracts the “reserved” regime for an agreement to complete a job

Czech Republic
Available languages: CZ

In this article in June, we informed you in about recent changes proposed for agreements to complete a job (dohoda o provedení práce, “DPP”), especially regarding mandatory contributions to social and health insurance.

While it is now required to register all employees working under DPPs with the Czech Social Security Administration (CSSA) and regularly report their income on a designated form, the Ministry of Labour and Social Affairs has made a last-minute decision to cancel some of the changes planned for 1 January 2025. The derogating bill is now in the Senate, which is expected to approve it. Once the President signs it, it will become a binding law with expected effectiveness as of 1 January 2025, so the original changes should not come into effect at all.

Which changes were cancelled before taking effect?

The proposed “reserved” regime for DPPs will not be introduced. Employers will not need to reserve DPP agreements to benefit from favourable social security and health insurance contributions. The current system will continue, meaning all DPPs with a monthly income below the specified threshold will benefit from the favourable regime. However, from 1 January 2025, a different method of determining the income threshold should apply. The legislation will not set a specific figure, but the threshold will depend on the average salary.

What is the planned threshold and how it will be calculated?

As of 1 January 2025, the monthly income threshold for DPP employees to participate in social security and health insurance should be CZK 11,500. This figure will be calculated as 25% of the average salary under the Social Security Insurance Act and rounded down to the nearest CZK 500. Income below this threshold will remain subject only to withholding income tax.

What rules continue to apply?

Employers must still comply with the recently introduced registration and income reporting requirements, as these obligations have not been cancelled.

If you have any questions about the DPP, please do not hesitate to contact your local CMS experts.