From 1 January 2023, the minimum wage has been increased by 1.100 CZK to 17.300 CZK.
This base minimum wage is set for a full-time job, i.e. 40 hours of working time per week. For non-employment contracts (DPP, DPČ), the hourly minimum wage is used instead of the monthly minimum wage, which in 2023 is 103,80 CZK per hour.
Guaranteed salary in 2023
In December 2022, the government decided that the guaranteed salary would increase starting from 1 January 2023 only for working category 8 and has been increased from 32.400 CZK to the amount of 34.640 CZK. For other working groups in 2023, the sum for guaranteed wages will remain the same as it was in the previous year.
The increase in the minimum and guaranteed wages from 1 January 2023 was approved according to Government Decision No. 465/2022 Sb.
Difference between minimum wage and guaranteed wage
The minimum wage is sometimes confused with the guaranteed wage but they are not the same thing. The minimum wage indicates the minimum possible remuneration of an employee, regardless of the type of work they perform. The minimum wage applies to all professions throughout the Czech Republic.
Guaranteed wages are determined based on work categories. Working groups are divided depending on the complexity, responsibility, and labour intensity of the work carried out. As such, different sums of guaranteed wages are established for specific groups. The guaranteed wage can never be lower than the minimum wage.
What does the minimum wage affect?
– Additional payment for work in difficult conditions. The increase in the minimum wage will affect workers working in difficult conditions. Starting in 2023, the salary increment for such employees will be at least 10% of the minimum wage, i.e. at least 1.730 CZK or if paid by the hour – 10,38 CZK.
– Increasing health insurance premiums. With the increase in the minimum wage, the minimum base for deductions for health insurance for persons without taxable income (OBZD) has also been increased. In 2022, this amount was 2.187 koruna, and starting 1 January 2023, it has been increased to 2.336 koruna.
– Increased discount on “školkovné”. The increase in the minimum wage also applies to families with small children. The size of the “kindergarten” tax credit again depends on the minimum wage. In 2022, this was 16.200 koruna and in 2023 it will be 17.300 koruna.
– Increasing the limit for paying the tax bonus for children. In 2023, the income limit required to qualify for the tax bonus payment has also been increased. This income limit is six times the amount of the minimum wage. If in 2022 it was 97.200 koruna, then in 2023 it is 103.800 koruna.
– Increasing the limit of non-taxable pensions. Pensions are exempt from tax if the annual amount does not exceed 36 times the minimum wage. In 2023, this amount will be 622.800 CZK per year, which corresponds to a pension of 51.900 CZK per month.
– The possibility of higher earnings for persons registered with an employment centre. If you are registered with the Employment Office, you can work part-time if the amount of remuneration is no more than half the minimum wage. In 2022, this was no more than 8,100 koruna per month. In 2023 this amount has been increased to 8,650 koruna.
What is the minimum wage for 2023 in neighbouring countries?
The increase in the minimum wage took place not only in the Czech Republic but also in Poland, Slovakia, and Germany. In Poland, the minimum wage in 2023 is approximately CZK 18.680; in Slovakia, it’s approximately CZK 16.910; and in Germany, it’s approximately CZK 5.000, which is the highest minimum wage in Central Europe.
If you want to receive up-to-date news on changes in tax legislation regularly, become a DoMyTax client. Our company employs high-level specialists with at least 10 years of experience. We constantly monitor and keep up with all changes in legislation and inform our clients. Get more from your business, and trust us with the bookkeeping.