The Czech ministry of finance has been working on a bill that will abolish the "super-gross wage" concept and change the way in which wage tax is being assessed. Specifically, the bill anticipates that the 15% wage tax will be calculated based on the gross wage. (A higher tax rate of 23% shall replace the solidarity surcharge). The bill is slated for a debate on the cabinet level and in parliament in the course of this fall, with the goal of having it written into law and come into force as of 1 January 2021.
The "super-gross wage" is the gross wage, increased by the employer’s social and health insurance contributions (at 33.8 percent). It is on this amount that employees are currently paying 15% wage tax and a 7% solidarity surcharge for monthly earnings in excess of CZK 139 340. As of 2021, it is the gross wage – rather than the super-gross wage – that is to serve as the assessment base for personal income tax. The abolition of the super-gross wage concept translates into a financial benefit for employees. The tax rate itself remains unchanged at 15 percent.
Employees whose gross wage is more than four times the average earnings (i.e., more than CZK 139 340) will tax the excess amount at 23 percent. Overall, the reduction of the assessment base will result in a higher net salary: those who earn CZK 30,000 on average will take home an additional 1,521 crowns.
Website of the Czech ministry of finance
19th January 2021
26th May 2021