Impacts of the consolidation package and key parameters
The basic obligations for self-employed persons (SEPs) will be significantly affected in 2026 by the cumulative impact of legislative changes introduced in previous years as part of the so-called “consolidation package.”
The key parameters for calculating contributions are derived from the average wage, which for 2026 is expected to be CZK 48,967.
A fundamental change concerns social security
Starting in 2024, there is a gradual increase in the minimum assessment base for social security. This will rise from the original 25% of the average wage to as much as 40% of the average wage by 2026.
The increase in the social security assessment base is a direct fiscal measure responding to efforts to maintain the sustainability of the Czech pension system.
Mandatory levies for self-employed persons (main activity) in the standard regime
The standard tax regime requires the filing of an annual tax return and statements, with final insurance contributions based on the actual tax base achieved.
Minimum health insurance advances
The minimum monthly health insurance advance is based on the minimum assessment base, which is half the average wage. The insurance premium rate remains at 13.5%.
For 2026, the minimum monthly health insurance advance will amount to CZK 3,306. The calculation is as follows: 48,967 × 0.5 = 24,483.5, × 13.5% = 3,305.2725 (rounded up to whole crowns). By comparison, in 2024 this advance was CZK 2,968.
Minimum social security advances
As we have already mentioned, the minimum assessment base for social security for 2026 is legislatively set at 40% of the average wage.
The insurance rate is 29.2% of the assessment base and includes:
- 28% for pension insurance
- 1.2% for state employment policy
The minimum monthly advance payment for social security for the main activity will reach CZK 5,720 in 2026. The calculation is therefore: 48,967 * 0.4 = 19,586.8 * 29.2% = 5,719.3456 (rounded up to the nearest whole crown).
The total minimum mandatory monthly payment within the standard regime (Health Insurance + Social Security) is thus CZK 3,306 + CZK 5,720 = CZK 9,026.
Comparison of minimum advances in 2025 and 2026
| Year | Minimum health insurance advance (CZK) | Minimum social security advance (CZK) | Total minimum monthly advance (CZK) | Year-on-year growth (%) |
| 2025 | 3,143 | 4,759 | 7,902 | |
| 2026 | 3,306 | 5,720 | 9,026 | +14.2% |
Table: Development of minimum monthly advance payments for SEPs (main activity) between 2025 and 2026
Personal income tax advance payment
The personal income tax advance in 2026 will apply to those SEPs whose tax liability for the previous year (i.e., in the 2025 tax return) exceeded CZK 30,000.
If the resulting income tax for 2025 is less than CZK 30,000, no advance payments will be made. The SEP will remit the tax for 2026 only with the tax return in 2026.
The amount of the tax liability also determines the frequency of paying advance payments:
- If the income tax for the previous period was between CZK 30,000 and CZK 150,000, advances are paid semi-annually at 40% of the last tax liability (due by June 15 and December 15).
- If the income tax exceeded CZK 150,000, advances are paid quarterly at 25% of the last tax (due by March 15, June 15, September 15, and December 15).
In the first year of business, no income tax advance payments are made, regardless of the amount of the anticipated profit.
Voluntary sickness insurance
Participation in sickness insurance is optional for SEPs. However, it is necessary to qualify for certain benefits such as sickness benefit, maternity cash benefit, or paternity leave benefit.
The minimum premium for sickness insurance (rate 2.7%) is again derived from the minimum assessment base. This is set at CZK 9,000 for 2026. A SEP can voluntarily increase the assessment base and pay a higher premium, which then allows them to draw higher benefits.
The minimum premium in 2026 is CZK 243 (9,000 * 2.7%).
Obligations of self-employed persons (secondary activity) in the standard regime
The secondary activity regime is very advantageous for SEPs who are also employed, receive an old-age or disability pension, or are on parental leave.
Social security for secondary activity
SEPs engaging in secondary activity do not have to pay social security advance payments during the year if their net profit for the taxable period does not exceed the so-called decisive amount. This is set at CZK 117,521 per year for 2026 (based on 2025 profit). If the profit in 2025 exceeds this amount, the SEP with a secondary activity will also be obliged to pay advance payments in 2026.
The minimum social security advance payment for secondary activity is set at CZK 1,574 for 2026. Advance payments start to be paid from the month following the submission of the income overview for the year in which the decisive amount was exceeded.
Health insurance for secondary activity
SEPs with a secondary activity are not required to pay monthly health insurance advance payments if the insurance premium is paid from their main source of income (e.g., employment or the state budget in the case of pensioners or parents on parental leave).
The premium is calculated after the end of the year from the actual tax base, and any underpayment must be settled within 8 days after the overview is filed.
The standard regime is usually more advantageous for beginning entrepreneurs with a secondary activity
Despite the increase in the minimum social security advance payment for secondary activity (CZK 1,574), this regime remains advantageous for starting or occasional entrepreneurs. However, they must be careful not to exceed the decisive amount, as this triggers the obligation to pay the insurance premium. This can retrospectively increase the real tax burden. For people in retirement or on parental leave, secondary activity remains the most economical way to do business.
The Flat-Rate tax regime in 2026: What are its conditions and for whom is it worthwhile?
The Flat-Rate Tax represents a key regime for simplifying payments, as it combines income tax, social security, and health insurance into a single monthly payment. This eliminates the need to file an annual tax return and overviews.
Conditions for entering the Flat-Rate Tax regime and deadlines for 2026
The flat-rate tax regime is available for SEPs with annual income up to two million CZK. The basic restrictions also include:
- prohibition from being a VAT payer
- prohibition of income from dependent activity (employment) except for that which is taxed (only) by withholding tax
SEPs must register for the flat-rate tax no later than January 10, 2026. If this deadline falls on a weekend (as in 2026), it is extended to the next business day. The binding deadline for 2026 is therefore January 12, 2026.
Monthly advance payments are always due by the 20th day of the given month. The first advance payment at the new amount must be paid by January 20, 2026. If the 20th falls on a weekend, the due date shifts to the next business day.
Amount of monthly payments for 2026 according to Flat-Rate Tax bands
The flat-rate tax is structured into three bands, which reflect different income and activity limits.
Band I (up to CZK 1 million income)
In Band I, there is another significant jump in levies for 2026. The total monthly levies will increase by CZK 1,268 to CZK 9,984 (compared to CZK 8,716 in 2025). This increase is primarily due to the increase in the assessment base for social security.
The breakdown of the payment in Band I is as follows:
- Income tax: CZK 100
- Health insurance: CZK 3,306 (same as the minimum advance payment in the standard regime)
- Pension insurance: CZK 6,587 (set at 115% of the minimum assessment base for social security)
Entrepreneurs with income up to CZK 1.5 million can also enter the first band, provided that at least three-quarters of all their earnings come from activities for which a sixty or eighty percent fixed-rate expense can be applied, i.e., from agricultural production, forestry and water management, craft activities, and the like.
Bands II and III
For SEPs in the higher bands, nothing changes for 2026, as the increase in their payments already occurred in 2024.
Band II (income up to CZK 1.5 million)
- Total monthly payment: CZK 16,745
- Income tax: CZK 4,963
- Health insurance: CZK 3,591
- Pension insurance: CZK 8,191
Band III (income up to CZK 2 million)
- Total monthly payment: CZK 27,139
- Income tax: CZK 9,320
- Health insurance: CZK 5,292
- Pension insurance: CZK 12,527
| Band (Income Limit) | Total Monthly Payment 2026 (CZK) | Income Tax (CZK) | Health Insurance (CZK) | Social Security (CZK) |
| I. (up to 1 mil. CZK) | 9,984 | 100 | 3,306 | 6,587 |
| II. (up to 1.5 mil. CZK) | 16,745 | 4,963 | 3,591 | 8,191 |
| III. (up to 2 mil. CZK) | 27,139 | 9,320 | 5,292 | 12,527 |
Table 2: Monthly Flat-Rate Tax Payment for 2026 – Detailed Breakdown
The fact that the flat-rate tax for Band I is higher than the sum of the minimum advance payments in the standard regime is not a mistake, but a deliberate part of the flat-rate tax design. The social security component here is set at 115% of the minimum, which automatically ensures a better future pension base for SEPs in this regime compared to those who only pay the strict minimum in the standard regime.
When is the Flat-Rate Tax worthwhile and when is the standard regime worthwhile?
Standard regime versus Flat-Rate Tax Band I (Income up to 1 mil. CZK)
In Band I, the flat-rate tax (CZK 9,984 monthly) exceeds the minimum mandatory advance payments (CZK 9,026 monthly) by CZK 958.
Advantages of the Flat-Rate Tax (Band I):
- Administrative simplicity: Complete exemption from annual administrative tasks.
- Tax certainty: No underpayments.
- Pension base: A higher social component (CZK 6,587) ensures a better future pension amount than the statutory minimum.
- It is suitable for SEPs who have no applicable tax reliefs (except for the taxpayer discount, which is accounted for in the Flat-Rate Tax by the symbolic tax of CZK 100).
Advantages of the standard regime:
- Tax reliefs: If the SEP uses the preserved reliefs for a spouse (with a child up to 3 years old) or disability reliefs, they can benefit from tax reliefs.
- High costs: The standard regime is more advantageous if the SEP can claim actual costs that significantly exceed the fixed-rate expense.
Higher income groups (Bands II and III)
Given the stability of monthly payments in Bands II (CZK 16,745) and III (CZK 27,139) in 2026, the flat-rate tax regime is very attractive for SEPs with income up to CZK 2 million who:
- have low actual costs (and thus would have to pay high income tax in the standard regime);
- do not use any tax reliefs that would compensate for the complexity of the standard regime.
Are you a SEP and need help with tax records and taxes?
If you operate as a self-employed person and do not yet have your own accountant, contact the Jaspar accounting office. We will help you with all agendas, including legal tax optimization. And in case of your growth, of course, also with the transition to a legal entity or, for example, with payroll agenda. If interested, go through our case studies, get to know our team, and contact us.
