Taxes
As of 1 January 2024, the child placement discount (known as the "childcare allowance") has been abolished in connection with the adoption of the consolidation package - this discount can no longer be claimed in the annual tax return or in the tax return for 2024.
Both the taxpayer's allowance and the child tax credit remain unchanged in 2025.
Amount of the limit for the 23% advance payment of the income tax for natural persons income taxes
From 2024, the limit of income from which the employee pays a 23% tax is changing from 4 times the average wage to 3 times the average wage. In 2025, a 23% income tax on income over CZK 139 671 will be paid (in 2024 the limit was CZK 131 901).
Non-cash employee benefits
In 2024, the rules for taxing non-cash employee benefits changed. The tax exemption applied only to the amount up to half of the average wage. In 2024, this limit was CZK 21 983.
From 1 January 2025, the limits for tax exemption are divided according to the type of benefits (Act No. 470/2024 Coll.)
1. Health benefits
- The tax exemption increases up to the level of the entire average wage.
- For 2025, this limit is set at CZK 46 557.
2. Leisure benefits – all remaining benefits listed in Section 6(9)(d) of the Income Tax Act
- The tax exemption remains limited to half of the average wage.
- For 2025, this limit is set at CZK 23 278.
The introduction of a separate limit for health benefits is aimed at promoting employee health and improving access to health services.
Increased limit for exemption of pensions from taxation
Regularly paid pensions are exempt from income tax if the annual amount does not exceed 36 times the minimum wage. In 2024, the limit was CZK 680 400; for 2025, the limit is CZK 748 800.
Author: Martina Farářová, HR & Payroll Services, Manager
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