Implications of the rise in average wage from January 1, 2022 (No. 1033)

Based on a government decree No. 356/2021 Coll., the average wage will increase to CZK 38,911 from January 1, 2022. With the increase in the average wage, there is also a rise in the minimum assessment base for determining contributions to the public health insurance of self-employed persons, increasing the minimum monthly advance payment to the amount of CZK 2,627. For the contributions to the social security system, the minimum monthly assessment base is determined as 25% of the average wage in case of primary activity, respectively as 10% of the average wage in case of secondary activity. This represents a monthly advance of CZK 2,841 for the primary activity and CZK 1,137 for the secondary activity.

In 2022, the self-employed person using the lump-sum tax regime will pay a monthly advance of CZK 5,994. The average wage is also substantial for calculating the maximum assessment base for social security contributions for both employees and self-employed persons. This annual limit is set at 48 times the average wage, which amounts to CZK 1,867,728 for 2022.

In terms of income tax, the average wage is crucial for the application of a progressive personal income tax rate of 23%, from the part of the tax base exceeding 48 times the average wage for the tax period, i.e. the amount of CZK 1,867,728. In the case of reckoning the monthly wage, it is 4 times the average wage, i.e. the amount of CZK 155,644.

publikováno 22.10.2021
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