Single Monthly Employer Reporting Effective from 1 January 2026

Basic technical information on the functioning of the SMER system can be found in an article prepared by our accounting department, available HERE.

What the SMER System Replaces

The SMER system will gradually replace, in particular, the monthly overviews of insurance contributions submitted to the Czech Social Security Administration (hereinafter “CSSA”), pension insurance records, certain reports to the Czech Labour Office (e.g reports on the fulfilment of the mandatory quota of employees with disabilities), and selected statistical surveys for the Czech Statistical Office and the Ministry of Labour and Social Affairs (hereinafter “MLSA”). The system will also be used for transmitting data to the Financial Administration, which will use it to assess advance payments for income tax – but only from 2027.

Health insurance companies are not yet integrated into the SMER system. Employers must therefore continue submitting separate monthly reports to each health insurance company. However, their integration is expected in the future.

Who Must Report and When

The obligation to submit the SMER applies to all employers without exception. This includes foreign companies temporarily assigning employees to the Czech Republic, as well as individuals employing workers based on work agreements or agreements to perform work. While the number of separate forms will indeed be reduced, the scope of data that employers must provide will remain the same or even increase. In particular, smaller employers who have not yet had to submit certain statistical reports, or those who have had only a limited range of reported employment relationships, will now face expanded obligations. The report will be submitted (for the first time for April 2026) from the 1st to the 20th day of the following month.

Key Implementation Dates

Although the SMER Act comes into force on 1 January 2026, the obligation to submit monthly reports begins only on 1 April 2026. However, this does not mean that employers can delay their preparations. Before the first report for April can be submitted (by 20 May 2026), employers must register all existing employees and all employment relationships in the system by the end of April at the latest. Each employee will be assigned a unique personal identification number and each employment relationship a specific employment relationship identifier.

In addition, employers must retroactively submit monthly reports for January through March 2026 no later than 30 June 2026. From 1 July 2026, new rules for employee registration take effect—all employees, including Czech nationals, will have to be registered before they start work. This may extend the period between the conclusion of the employment contract and the actual start of work. If the employee ultimately does not start work, this must also be reported.

For clarity, we have summarised the key dates for you in the following table:

SMER Implementation Timeline

What Employers Will Report

The SMER form and related notifications (particularly employment commencement notifications) will be submitted through the CSSA in XML format—either via the CSSA data box, the CSSA e‑portal, or an API environment.

The SMER form has a multi‑layered structure. It includes summary data for employers (e.g. total social security contributions and contributions to state employment policy, total tax advances), summary data for individual employees (e.g., total income received from the same employer), and, finally, individualised data on each specific employment relationship (e.g. data from the employment relationship and from the agreement on work activity of the same employee are reported separately). The exact scope of required data is specified in Government Implementing Regulation No. 417/2025 Coll., which can be found HERE.

Notifications of Employment Commencement and Changes

Under current rules, employers may report an employee’s commencement of employment within 8 days after the start date. From July 2026, the rules will be tightened – employees will have to be registered before they start work. Basic information may be submitted in advance; remaining data may be completed within 8 days after commencement of employment.

Employers must report not only commencement and termination of employment but all changes, such as changes of job position within the company. All work performance agreements must also be reported before work begins.

A significant expansion compared to the current system is the obligation to report small‑scale employment relationships that have not been reported so far, such as employment not establishing participation in sickness insurance or low‑remuneration positions of managing directors. This will undoubtedly lead to an increase in the administrative burden.

Connection with Changes in Income Tax

Together with the SMER Act, a comprehensive amendment affecting 22 laws—including the Income Taxes Act—has been adopted. However, the changes in the area of taxation are so complex that we have devoted a separate article to them in this newsletter, which you can read HERE.

In connection with the SMER system, it is important to note that from 2027, the Financial Administration will begin to use data from monthly reports to continuously assess advance payments for income tax. This will eliminate the need for employers to file the annual tax reconciliation—for the first time for the 2027 tax year. However, as early as 2026, employers will be required to report detailed individualised data on each employee, which the Financial Administration will use for control purposes.

Penalties for Non‑Compliance

The SMER Act includes substantial penalties for failure to submit or late submission of the monthly report. The amount of penalties is derived from the number of employees subject to reporting. For large employers, the penalties can theoretically reach tens to hundreds of millions of crowns, so we recommend that compliance with deadlines is considered a top priority.

How to Prepare for the SMER

The successful implementation of the SMER system will require thorough preparation. Employers should therefore not wait until the last moment, but should already begin reviewing internal processes, obtaining any missing employee data, and ensuring that their payroll and HR systems meet the new requirements. We also recommend testing the employee registration procedure before the start of employment and following the MLSA information campaign, which will provide methodological guidance and instructions on its website.

Conclusion

The SMER system represents one of the most significant changes in payroll administration in recent years. While the long‑term goal is simplification through consolidation of multiple reports into one, implementation will initially require substantial preparation and internal processes adjustments. Employers should begin preparing as early as possible to ensure a smooth transition and avoid penalties for non‑compliance.

If you have any questions, please feel free to contact our specialists, who will be happy to provide consultation and support in preparing for the new system.

Authors:

Gabriela Ivanco, Tax Department Manager 

Anna Klímová, Newsletter Editor