Taxes for the self-employed

Hi all,

I'm self-employed (working as a freelance journalist) and I'm considering moving to Prague. I'm trying to research exactly what kind of taxes I would need to pay. I know there is a flat 15% rate whether you're an employee or self-employed, but then I also found something a little disconcerting regarding social security:

Czech Republic Social Security:
Mandatory social and health insurance payments are:
Employer - 34%.
Employee - 11%.
Self employed pay mandatory 42.7% for social security and health insurance.


Is that right? Do I really need to pay 43% + 15% = 58% of what I earn as taxes? That sounds like way too much, I'm hoping what I read was wrong :)

If I'm wrong, would you be so kind to point me to a resource that explains the taxes for self-employed people clearly?

Thank you so much!
Dario

Hi Dario,

www.europa.eu/youreurope/citizens/work/ … ed_en.htm.

About social security: www.europa.eu/youreurope/citizens/work/ … ex_en.htm.

Health insurance is quite dependent on the duration of your stay and a few other parameters; see here:

www.europa.eu/youreurope/citizens/healt … ex_en.htm.

Hope that helps!

Hi Dario,
I was looking for the same info myself. You calculation doesnt take into account that you can reduce your income for the purpose of tax by 60% for expenses whether you have incurred them or not. Making the effective income tax 6% of gross, social 13.6% of gross, etc. The clearist info I found in english so far is http://alexio.cz/business/zivnostensky_list.html . It is dated 2013 so dont know if the info is now out of date. Can anyone tell me if the 60% of gross calculation of explenses for self employed people is still in operation? And everywhere says this is to change soon, what is it going to change to?

I found a good site that seems to explain a lot, and things are better than I hoped.

http://tradelicense.cz/income_tax_and_t … cense.html

In general the total sum of Income Tax, Social / Health contributions taken from your revenue is around 12% (non-EU, no health contributions) and about 15% (EU Citizens) (2014).



There is also a spreadsheet that allows you to calculate the amount of taxes that you pay, including income tax, social and health contributions, if you get a trade license (which you can if you're self-employed).

I can't see your link yet (it says it's under review), maybe it's the same as mine but I included it anyway.

Hi Someguy, Yes it says link under review in your post too but sounds like just what i am looking for. Would you mind PM'ing the link to me?

I believe that the government has or plans to change the deduction from 60% to 50% in most cases. . In addition, the first roughly Kc 100.000,- of income is not subject to income tax! Your income however, must come from multiple "employers"/clients, not just one.

I have been living and working in Prague for 20 years.

Steve