What is coming and who will be affected by the changes?
From January 2026, the decisive amount for participation in sickness insurance for employees working under a work performance agreement will increase. The new threshold will be CZK 12,000. The change is based on the Communication of the Ministry of Labour and Social Affairs No. 396/2025 Coll. and will thus affect when the insurance premiums are deducted from the LSA.
Determination of the applicable amount for participation in sickness insurance for agreements on the performance of work
The decisive amount for the purposes of social security contributions is based on the average wage for the calendar year. For 2026, the average wage is CZK 48,967.
The relevant income for employees working under a work performance agreement is 25 % of the average wage rounded down to the nearest 500 crowns. A simple calculation shows that 25 % of CZK 48,967 is CZK 12,241.75, which, rounded down to the nearest 500 crowns, amounts to CZK 12,000.
Income limit for the contribution to the insurance premium for the FIT
For employees working on the basis of a PPA, this means that if their employer charges them a countable income of CZK 11,999 for a calendar month, no insurance premiums will be deducted from this income. Neither social security nor health insurance. Participation in health insurance for employees working on the basis of a work performance agreement also depends on participation in sickness insurance pursuant to Act No. 187/2006 Coll., on Sickness Insurance.
It's important to know that if an employee has more than one work arrangement with the same employer, their earnings are added together. Only the total amount of income determines whether the qualifying amount for participation in the insurance has been exceeded.
Taxation of income from a work performance agreement
As regards the taxation of income from a work performance agreement, it is important whether or not the employee has made a tax declaration to the payroll provider.
When a tax declaration is made, an advance payment of income tax is always made on any total income earned under a work arrangement with the taxpayer.
If the employee does not make a tax declaration, then the aggregate amount of the income (or income) from the agreement (or several agreements) for the performance of work with one employer (taxpayer) is important. Even in the case of the limit for withholding tax on income, it is based on the amount applicable for participation in sickness insurance, which is CZK 12,000 for 2026. Thus, next year, income earned by employees without a tax declaration on the basis of one or more agreements on work performance with one taxpayer in the aggregate amount of up to CZK 11,999 inclusive will be subject to withholding tax. If an employee who has not made a tax declaration with his/her employer achieves an aggregate income from work performance agreements of at least CZK 12,000, an advance payment of personal income tax will be made on this income in a calendar month.
And how will it be from January 2026 onwards?
At present, the income of employees working under a performance agreement is sent via Statement of income from agreements to perform work (EAPA) always by the 20th day of the following calendar month. The report is sent also for employees who have not achieved the income eligible for sickness insurance, as well as for employees with zero income in a given month.
On 1 January 2026 takes effect Act No. 360/2025 Coll., amending certain laws in connection with the adoption of the Uniform Monthly Employer Reporting Act. This Act also changes Act No. 589/1992 Coll., on social security contributions and state employment policy, specifically to repeal of § 9a.
What does this mean for employers?
For January 2026 For there will be no need to send Income Statements from work performance agreements. These forms were in fact repealed by law, ...so they're no longer being worked with.
Statements of income from work performance agreements have often been used for employee login and logout working on the basis of work performance agreements. After their cancellation this option will not be available.
If an employer decides to employ a DPP employee in a so-called. „transition period“ (January-March 2026) to log in or out, can only do this through the Notice of Entry/Exit.
Check-in and check-out of employees working on the basis of the FTE during the period January-March 2026 will not be mandatory.
From April 2026 will start employee registration, which will be part of the Single monthly employer reporting. Data for the period January to March 2026 will then be reported additionally.
