Correction, 25 September 2026: the comparisons include the annual minimum health-insurance base. The flat-tax income ceiling and Czech domestic VAT turnover are assessed separately.
- Paušální daň has three bands by annual income: band I 9,162 CZK/month, band II 16,745 CZK/month, band III 27,139 CZK/month (Czech Financial Administration).
- The conditions: annual income from self-employment up to 2,000,000 CZK, and no VAT-payer status — identified-person registration is explicitly excluded from that condition (§ 2a(1)(a)(3) of Act No. 586/1992 Coll.).
- A contractor on CZK 100,000/month saves roughly 47,968 CZK a year with paušální daň versus 60% flat expenses; near the 2,000,000 CZK/year ceiling the saving is even larger.
- Above 2,000,000 CZK a year, paušální daň ends in every band, while Czech VAT registration depends separately on domestic turnover and place of supply.
Responsibility for this page rests with Ganado International s.r.o., company ID 19322119 (ARES registry entry), acting through its director Artem Chagin. It is general information as of the update date, not tax advice on your specific case.
2026 paušální daň conditions
Paušální daň replaces personal income tax, social insurance and health insurance with a single monthly payment. The 2026 conditions: annual income from self-employment cannot exceed 2,000,000 CZK, and you cannot be a VAT payer or have a VAT registration duty — with one exception (Czech Financial Administration).
That exception is identified-person registration: the Income Tax Act explicitly excludes it from the condition (§ 2a(1)(a)(3) of Act No. 586/1992 Coll.). A contractor who becomes an identified person by invoicing a service into the EU (§ 6i of Act No. 235/2004 Coll.) stays on paušální daň — but must keep filing an EC Sales List for every month with a relevant supply.
You become an actual VAT payer on domestic turnover: after exceeding 2,000,000 CZK from the first day of the following calendar year, and after exceeding 2,536,500 CZK from the day after it is exceeded (§ 6(1) and (2) of Act No. 235/2004 Coll.). Only supplies with a place of supply in Czechia count towards that turnover (§ 4a(1) of the same Act) — and becoming a VAT payer removes you from paušální daň regardless of which band you were in.
2026 paušální daň bands
Your band is set by annual income and the share of income falling into each flat-expense category. For a typical IT contractor or freelance consultant (100% of income in the 60%-expense category), the extended ceilings in the table apply.
| Band | Income ceiling | 2026 monthly advance |
|---|---|---|
| Band I | CZK 1,000,000 (no condition) / CZK 1,500,000 (≥75% in the 60% or 80% category) / CZK 2,000,000 (≥75% in the 80% category) | 9,162 CZK (from 1 July 2026, previously CZK 9,984) |
| Band II | CZK 1,500,000 (no condition) / CZK 2,000,000 (≥75% in 60%/80% category) | 16,745 CZK |
| Band III | CZK 2,000,000 (no condition, no extension) | 27,139 CZK |
Source: Czech Financial Administration, 2026 paušální daň information. The extended ceilings apply only when at least 75% of annual income falls into the 60% or 80% flat-expense category; band I's CZK 2,000,000 ceiling is reserved for income in the 80% category (craft trades, agriculture), not the 60% category a typical IT contractor on a free trade licence falls into.
Paušální daň, or 60% flat expenses?
What decides it is the relationship between your real costs, your income level, and whether your band makes paušální daň cheaper than actual contributions.
| Your situation | What usually makes sense |
|---|---|
| Income up to CZK 1,500,000/year, low real costs (a typical remote IT contractor) | Paušální daň in band I is usually cheaper than 60% flat expenses — see worked example A below. |
| Income between CZK 1,500,000 and CZK 2,000,000/year | Paušální daň in band II (if the 75% condition is met) is usually still cheaper, but the gap needs computing case by case — see worked example B. |
| Income above CZK 2,000,000/year | Paušální daň is unavailable in every band. The alternative is 60% flat expenses or actual expenses, with VAT assessed separately by place of supply and domestic turnover. |
| A high share of real costs (above 60% of income — e.g. subcontractors, office rent, employees) | Actual expenses can come out cheaper than both 60% flat expenses and paušální daň — run both scenarios on real numbers. |
| Expected income drop into a lower band next year | Bands can be changed for the next year. Crossing an income ceiling mid-year requires checking notification and annual settlement; it is not, by itself, an instruction to stop paying advances the next month. |
The worked comparison below uses the 60%-expense category — for craft trades in the 80% category, actual expenses usually win at lower income levels already.
Worked example A: CZK 100,000/month (CZK 1,200,000/year)
A contractor with 100% of income in the 60%-expense category meets the condition for band I's extended ceiling (CZK 1,500,000), so at CZK 1,200,000/year they stay in band I. The model assumes main self-employment throughout 2026, Czech public health insurance, the minimum health base applying for all 12 months and only the basic personal tax credit. Annual health insurance uses the higher actual/minimum base and is rounded upward once, not calculated as twelve rounded advances. Both sample incomes put the social assessment base above the ordinary minimum. Exemptions, a shorter activity period or other insurance change the result.
| Annual income | 1,200,000 CZK |
|---|---|
| 60% flat expenses (60% of 1,200,000 CZK) | 720,000 CZK |
| Tax base (1,200,000 CZK − 720,000 CZK) | 480,000 CZK |
| 15% tax on the base (72,000 CZK) minus the 30,840 CZK personal credit | 41,160 CZK |
| Social insurance, 29.2% of 55% of the base (264,000 CZK) | 77,088 CZK |
| Health insurance, 13.5% of the higher actual/minimum annual base (293,802 CZK) | 39,664 CZK |
| Total under 60% flat expenses | 157,912 CZK |
| Paušální daň, band I (12 × CZK 9,162) | 109,944 CZK |
| Annual saving with paušální daň | 47,968 CZK |
The combined tax, social and health insurance under 60% flat expenses is 157,912 CZK a year; paušální daň in band I is 109,944 CZK. The calculation uses the 15% income tax rate under § 16 of Act No. 586/1992 Coll. and the CZK 30,840 personal tax credit under § 35ba(1)(a) of the same Act, plus the ČSSZ rate of 29.2% of 55% of the base and the VZP rate of 13.5% on the higher of 50% of the tax base or the applicable statutory minimum. The tax base here stays below the threshold at which § 16's 23% rate starts, so only 15% is applied. VZP: 2026 minimum monthly base CZK 24,483.50; exceptions assessed separately.
Worked example B: at the ceiling, 166,667 CZK/month (2,000,000 CZK/year)
The highest annual income at which paušální daň is still available. With 100% in the 60% category, this meets the condition for band II's extended ceiling (CZK 2,000,000), so band II applies, not band III. The model assumes main self-employment throughout 2026, Czech public health insurance, the minimum health base applying for all 12 months and only the basic personal tax credit. Annual health insurance uses the higher actual/minimum base and is rounded upward once, not calculated as twelve rounded advances. Both sample incomes put the social assessment base above the ordinary minimum. Exemptions, a shorter activity period or other insurance change the result.
| Annual income | 2,000,000 CZK |
|---|---|
| 60% flat expenses (60% of 2,000,000 CZK) | 1,200,000 CZK |
| Tax base (2,000,000 CZK − 1,200,000 CZK) | 800,000 CZK |
| 15% tax on the base (120,000 CZK) minus the 30,840 CZK personal credit | 89,160 CZK |
| Social insurance, 29.2% of 55% of the base (440,000 CZK) | 128,480 CZK |
| Health insurance, 13.5% of the higher actual/minimum annual base (400,000 CZK) | 54,000 CZK |
| Total under 60% flat expenses | 271,640 CZK |
| Paušální daň, band II (12 × CZK 16,745) | 200,940 CZK |
| Annual saving with paušální daň | 70,700 CZK |
The combined total under 60% flat expenses is 271,640 CZK a year; paušální daň in band II is 200,940 CZK. One koruna higher — above CZK 2,000,000 annual income — paušální daň ends in every band.
Above the CZK 2,000,000 limit
A contractor on CZK 200,000/month invoices 2,400,000 CZK a year — above the 2,000,000 CZK limit, paušální daň cannot be used in any band, regardless of expense category. They must switch to actual expenses or 60% flat expenses with a standard tax return.
Foreign income alone does not establish Czech VAT-payer status. The relevant domestic-turnover thresholds are 2,000,000 CZK and 2,536,500 CZK under § 6(1) and (2) of Act No. 235/2004 Coll.. The combination of paušální daň ending and VAT-payer status starting is why, near 2,000,000 CZK a year, both conditions should be checked together, not separately.
What you send, what we do, when it is done
No introductory call. You describe the scope in writing and get a price and timeline back in writing.
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Send five facts
Client country and type (EU business / non-EU / platform), approximate monthly income, current status (new OSVČ / taking over an existing one), whether and where you plan to physically work abroad, invoices per month.
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Get scope and price
Within one working day we confirm whether and when identified-person status arises, which expense regime makes sense, and send a fixed price and invoice.
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We start after payment
We handle registration where needed, set up your invoicing, and run ongoing records, EC Sales Lists and the annual return within the agreed scope.
Written reply within 1 working day.
What is billed separately
Monthly OSVČ bookkeeping starts at 990 CZK and covers ongoing records. The following are one-off or event-driven and billed separately at the published rates, so you can work out the total without a phone call.
| Identified-person / VAT registration | from 1,990 CZK | Application, power of attorney and correspondence with the tax office when identified-person or VAT-payer status arises. |
|---|---|---|
| Monthly VAT / identified-person filing | from 690 CZK / filing | Preparing and filing for the month in which a relevant supply occurred. |
| Historical backlog cleanup | from 1,990 CZK | Reviewing and completing periods that were not correctly recorded or filed. |
| Standalone annual return outside continuous service | from 2,990 CZK | For contractors who want only the annual work, without monthly bookkeeping. |
The annual return and the relevant insurance overviews are included in continuous monthly bookkeeping; they are billed separately only outside that scope.
VERIFIED
Verified
Primary sources for the bands, conditions and limit described above.
Send your income, we calculate your band
Approximate monthly income, real cost share and current status (OSVČ / identified person / VAT payer) is enough for a first written reply.