Czech Republic: Social security

social security

Some changes relating to social security have come into force in January 2011. Regarding the maximum assessment base for social security payments per employee, it continues to be a 72-multiple of the average wage, which in 2011 amounts to CZK 24,740. The maximum assessment base for social security payments amounts therefore to CZK 1,781,280.
As of 1 January 2011, sickness benefits will be paid starting on the 22nd calendar day of an individual’s temporary work disability. The employer will provide the employee with wage compensation during the first 21 calendar days of sickness. The amount of sickness benefits per day will remain at 60% of the reduced assessment base per day over the whole period of sickness.
Employers are no longer entitled to deduct 50% of the wage compensation relating to workdays within the period of the first 21 calendar days of temporary work disability from social security insurance payments.
An exception will be applied for employers with up to 25 employees making contributions to health insurance who have voluntarily registered for a special social security treatment scheme. They may choose whether to pay the social security contributions at 25% of the employees’ assessment bases, without the option to deduct from the premium charges half of the wage compensation paid for temporary inability to work, or whether they will continue to pay the contribution at 26%, and keep the option to deduct half of the wage compensation paid.
In this connection, the Ministry of Finance issued information regarding the calculation of the super-gross wages for employees of small organizations who choose to apply the 26% rate. For these employees, for the purpose of calculating the super-gross wage, the increase will be by 34% only, i.e. 25% for social security and 9% for health insurance.
In relation to 2010, it will be possible to deduct half of the wage compensation from insurance payments only for workdays in December 2010. For compensation reported for January 2011 and the following months, it will no longer be possible to utilize the claim for reimbursement of half of the wage compensation, even if the compensation is related to the period of temporary work disability before 2011.


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