Compulsory social insurance
The Czech Social security system has compulsory social insurance which covers sickness benefits, unemployment benefits and pension insurance. There is also a state social support covering the cost of subsistence and other basic personal needs.
Social security contribution
Everyone working in the Czech Republic is insured with the Czech Social Security Administration. The social security contribution is 8% of your gross salary. It will be automatically taken off your monthly pay by your Czech employer. Employers also have to pay social insurance for their employees from their own funds amounting 26% of gross wages. If you work freelance you will have to pay 28% of your declared monthly earnings. If your declared earnings are less than 25% of the national average monthly wage a minimum flat-rate tax applies.
In order to be entitled to unemployment benefits, you have to be in the job seekers registry and have a permanent residence in the Czech Republic. To receive unemployment benefits you must have worked for at least twelve months within the last three years. The amount of the benefit is calculated by the net income of your last job. You receive 50% of your average monthly earnings for the first three months of unemployment. The maximum support is 2.5 times the subsidence level.
The amount of monthly retirement pension in the Czech Republic is calculated on the personal earnings basis of 1.5% of the personal assessment base per year of coverage.
Pregnant women, juveniles and employees taking care of their children are eligible for special provisions. Maternity leave entitles you to 28 weeks. Within that time you receive financial support from the government, which is usually around 69% of your average monthly income of the last twelve months.