Tax and other contexts of the increase in the minimum wage as of January 1, 2021 (No. 970)

With the start of 2021, the minimum wage will increase from CZK 14,600 to CZK 15,200 (see our previous information). The following changes in the amounts and limits regulated by the Law on Income Tax also go along with this change:

Tax abatement for placing child in a preschool facility (so called NURSERY BONIFICATION) can reach a maximum of CZK 15,200 in 2021 (for 2020, the limit is CZK 14,600). The entitlement to the TAX BONUS payment for a child arises when the income reaches at least the level of 6 times the minimum wage during the tax period. This means CZK 87,600 for the year 2020, i.e. proportional part of income of CZK 7,300 per month from the employer; however, for the year 2021 it is an annual amount of CZK 91,200, i.e. CZK 7,600 per month from the employer. Only revenues from dependent activities (employment) and self-employment are relevant and applicable.

Along with the minimum wage, the threshold for the exemption of REGULARLY PAID PENSIONS is also rising, which is set at 36 times the minimum wage. In 2021, an annual pension of up to CZK 547,200 (i.e. monthly pension of CZK 45,600) will be exempt. For 2020, a pension of up to CZK 525,600 is exempt.

There is also a change in HEALTH INSURANCE: liable persons without taxable income (e.g. students over 26 years of age) will pay health insurance premiums in the amount of CZK 2,052 per month from January 1, 2021 (in 2020, the monthly payment is CZK 1,971).  

KODAP advisers continue to be at your service.  

Words of gratitude

We wish to thank our clients and our employees for the fact that, in the heavy competitive environment, the KODAP group took the first place in the “Accounting Firm of the Year 2020” contest. The event is organized jointly by the Union of Accountants, the Chamber of Certified Accountants, and the Wolters Kluwer publishing house. The Jury thoroughly explored the qualification, expertness, techniques, visions, and it checked the references of customers, too. The more we are enjoying this success.

publikováno 11.12.2020