Incidences of the increase in the officially decreed average wage amount for the year 2021 (No. 948)

With regard to the decree of the general assessment base in the amount of CZK 34,766 and the conversion factor of 1.0194, the average wage for 2021 is increased to CZK 35,441.

The average wage affects a number of other tax and insurance parameters. For example, the amount of the minimum advance paid by self-employed persons (independent contractors) for health insurance (increased from this year’s CZK 2,352 to CZK 2,393 in 2021), the amount of the minimum advance paid by self-employed persons for pension insurance (increased from this year’s CZK 2,544 to CZK 2,588 in 2021) in case of principal activity. Furthermore, the quota of relevant monthly income for employee participation in health insurance (increased from CZK 3,000 to CZK 3,500 from 1 January 2021).

Moreover, the average wage forms currently the fundamental value for the progressive taxation of private individuals. This year, and the previous year, the amount of 48 times the average wage (CZK 1,701,168 in 2021) was the limit for the solidarity increase in natural person income tax. In case of the abolition of the super-gross wage, this amount will become the threshold for the income tax rate of 23%, if the proposal is adopted in its present form.

publikováno 08.10.2020