5% social security contributions reduction for employers who employ selected groups of jobseekers

As of next year, employers may apply a 5% reduction to the employer’s social security contributions for their employees. The rationale behind the relevant amendment to the Act on Social Security and Employment Policy Contributions is to motivate employers to hire individuals who, due to their age or various life situations, cannot enter into full-time employment.

Employers who employ selected categories of part-time employees may as of February 2023 make use of a 5% reduction on their social security contributions.
These selected categories of employees include:
– Employees above the age of 55.
– Employees who are the caretaker of (their own or a foster) child below the age of 10.
– Employees who care for a close person in need of care
– Students at secondary schools or universities (unless they are enrolled for self-study, evening, or remote-learning classes or studies in tandem with work).
– Employees who were hired in the past 12 months as a job-seeker for retraining.
– Handicapped persons.

The same reduction applies to persons below the age of 21 years – irrespective, in their case, of whether the scope of employment is part-time. The criteria for whether the monthly reduction may be drawn are these:
– At least 8 working hours but not more than 30 working hours per week;
– The assessment base from all forms of employment with one and the same employer does not exceed 1.5 times the average wage, and, at the same time
– The assessment base from all forms of employment with one and the same employer per one hour from the total count of hours worked in the given calendar month does not exceed 1.15% of the average wage.

These criteria must be fulfilled for the entire duration of employment in the given month. If the employee has several jobs, then the reduced contributions will be paid by that employer who was first to announce its intention to do so to the Social Security Administration.

The Employer must notify the Social Security Administration (ČSSZ) electronically one month before the day as of which it wishes to apply the reduction, and in any case no later than prior to the filing of the overview of contribution payments for the concrete month for which the reduction is sought.

The employer enters the reduction which it desires to use in the standard form Overview of Contribution Payments, to be filed with the ČSSZ.

Act No. 216/2022 Coll.

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