The government has approved the coefficient for the calculation of the minimum wage for 2025 and 2026. The relevant amendment to the Labor Code has come in force as of 1 August 2024.
The minimum wage will newly be set as the product of average monthly gross earnings across the national economy, and a special coefficient to calculate the actual minimum wage. The former, i.e., the average monthly gross earnings, will be determined by the finance ministry by the end of August of the respective preceding year, whereas the coefficient will be stipulated by the government. For 2025, it is 42.2%; for 2026, it is 43.4%.
Based on the above formula, the minimum wage for 2025 will increase from today’s CZK 18 900 to CZK 20 800. The hourly minimum wage is rising from CZK 112.50 to CZK 124.40.
The minimum wage affects, among other things, the amount to be paid in health insurance premiums for persons without taxable income; the minimum social security payments on account to be made by self-employed persons and part-time workers, and the eligibility thresholds for tax bonuses.
The amendment to the Labor Code, which has come into effect on 1 August 2024, abolished what was known as “guaranteed pay” in the private sector. Going forward, employers merely need to ensure that workers receive the minimum wage, this being the lowest admissible compensation for work performances. Only in the public sector (i.e., for those employed by the state) does the institution of guaranteed pay remain in place.
Depending on the demands imposed by the given type of job, guaranteed pay falls into one of four (as opposed to the previous eight) categories. The first category of work is associated with the lowest level of guaranteed pay of CZK 20 800 / month; the second with CZK 24 960 / month, the third with CZK 29 120 / month, and the fourth with CZK 33 280 / month (whereas the aforementioned amounts are derived from the minimum wage; figures given are valid for 2025).
Source:
Ministry of Labor and Social Affairs