Discount on Insurance Premiums for Employers

Discount on Insurance Premiums for Employers

Czech Republic
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On 1 February 2023, an amendment to Act No. 589/1992 Coll., on social security premiums and premiums to state employment policy, will come into force. The amendment introduces a discount on insurance premiums for employers who, on a part-time basis, employ designated groups of employees for whom it is usually more difficult to find employment on the labour market.

The discount can be applied to employees who are in an employment or civil service employment with the employer (subject to the condition that they are covered by health insurance), with agreed shorter working hours of at least 8 hours per week and no more than 30 hours per week.

The discount applies to premiums for employees in the following groups:

• employees over 55 years of age;
• employees caring for a child under 10 years of age;
• employees caring for a person dependent on the help of another person;
• employees preparing for a future career by studying;
• employees who have undertaken retraining in the last 12 months;
• employees with a disability; and
• employees under 21 years of age (part-time condition not applicable for this group).

If more than one reason for applying the discount is met for the same employee, the employer may apply the discount only once. Similarly, if an employee is employed by more than one employer, only one employer can claim the discount, usually the employer that first notified the social security administration of its intention to do so.

The amount of the discount is 5% per calendar month of the employee’s assessment base.

The application of the discount requires activity on the part of the employer, who must first notify the social security administration of the intention to apply the discount and then reflect the discount in the "premiums statement".Also, additional details of the discounts should be included in the statement.

The discount cannot be claimed retrospectively.

By Radek Matous, Partner, Ondrej Benes, Counsel, Eversheds Sutherland