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Czech Republic: Reduced penalties for employers, late payment of social security premiums (COVID-19)

Czech Republic: Reduced penalties for employers

The government approved a legislative proposal reducing penalties imposed on employers for late payment of social security premiums and contributions to the state employment fund—relief offered in reaction to the coronavirus (COVID-19) pandemic.

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The draft legislation concerns amounts paid by employers that are 24.8% of their employees’ wages (employer’s premiums) payable for the calendar months of May to July 2020. If the premium for these months is paid no later than by 20 October 2020, the employer would be required to pay only 20% of the standard penalty for late payment. The reduced penalty would correspond to an approximately 4% relief.

To be eligible for this relief, the employer would be required to make a timely payment of the part of the social security premiums for employees (that is, the amount for the relevant month, by the 20th day of the following calendar month). Thus, employers would still be required to submit reporting overviews and pay premiums for their employees by the regular deadlines.

The amendment further introduces mandatory electronic submission of reporting overviews.

The proposed amendment must be approved by the Parliament and signed by the president, to be enacted.

Penalties for late payment of health insurance premiums for the period from March to August 2020 have already been waived, provided that the premiums are paid no later than by 21 September 2020. The waiver of penalties for health insurance premiums should apply to late payment of both the employer and employee shares of premiums.


Read a May 2020 report prepared by the KPMG member firm in the Czech Republic

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