Foreign insurance and super-gross wage calculation

An inconspicuous amendment to the Income Taxes Act came into effect as of this January, bringing about some complications and practical problems with employee wage processing in situations where employees have social security insurance in other EU states, EEC states or in Switzerland.

Prior to January it held that in order to calculate the super-gross wage, the gross wage of an employee was increased by the employer’s insurance premium in accordance with the Czech legal regulations (34%), and that was uniformly applied to cases including where employees were actually subject to the respective foreign insurance system (usually on the basis of an issued A1 form).

From now on, in cases where employees have foreign insurance, for the purposes of super-gross wage calculation it is also necessary to increase the gross wage of an employee by the mandatory foreign premium paid by the employer in accordance with the legal regulations of the respective state where the premium is paid.

publikováno 12.02.2019