Discount on social security contributions for part-time employees

The employer will be able to apply a monthly discount of 5% on its part of the social security contribution from the total of the assessment bases of employees in part-time service or employment if they fulfil the conditions specified by law. Thus, the amount of the employer's contribution after applying the discount will only be 19.8% for these employees.

Pursuant to Section 7a (1), the employer is entitled to a discount on the contribution for the calendar month for an employee in service or employment who is:

• a person over 55 years of age;
• a person caring for a child under the age of 10, of whom he is a parent or a foster parent;
• a person caring for a close person under the age of 10 dependant on the care of another person in the first degree, or a close person dependant on the care of another person in the second to fourth degrees;
• a person preparing for a future profession through studies;
• a person who, in the period of 12 calendar months prior to the calendar month for which the discount on the premiums is applied, has joined as an applicant for employment for requalification;
• a person with disabilities pursuant to section 67 (2) of the Employment Act;
• a person younger than 21 years of age.

In particular, the given employment or service must meet the following criteria (with the exception of employees under 21 years of age, for which the restriction does not apply):

• the staff member shall work part-time in the scope of 8 to 30 hours per week;
• the sum of the assessment bases for the given employer from the employment is less than 1.15 times the average wage per 1 hour and less than 1,5 times the total average wage;
• the time worked at the employer shall not exceed 138 hours for the given month;
• The contribution from the Labour Office shall not apply to the employee at the time of the part-time work.

The employer shall notify the Czech Social Security Administration of its intention to apply the discount on the premium on the prescribed form no later than by the deadline for submitting the overview of premiums paid for the calendar month for which the discount is applied. The employer is obliged to keep the prescribed records of employees for whom it applies the discount on the premium.

If an employee is employed by more than one employer in the given calendar month, only the one who is the first to report its intention to apply the discount on the premium can apply this discount. The condition for applying the discount on the premium must last for the employee for the duration of the employment in the given calendar month and the employee is obliged to provide the employer with all the documents necessary for the application of the discount.

It will be possible to apply the discount from 1 February 2023, i.e., for the wages for February 2023 for the first time. We recommend that employers who are considering applying the discount on premiums to study the conditions for applying this discount in a timely manner and, if necessary, adapt their payroll systems accordingly.

If you have any questions about this issue, please do not hesitate to contact our experts.

Authors:

Gabriela Ivanco, Tax Manager

Anna Klímová, Editor Mazars Tax View