Trade license or DPP or employee?
What a salary really costs a company, what is left for the person, and how much more they keep when the same money is paid to a trade license.
Salary plus the employer’s social and health insurance, or the invoice of a trade license holder. EUR at CZK.
- Trade license, 60/40
- Person keeps
- –
- Trade license, flat-tax method
- Person keeps
- –
- DPP agreement
- Person keeps
- –
- Employee
- Person keeps
- –
Per month, from the same company budget of –.
Share of the company’s money that goes to the state
Income tax, social and health insurance (employee and employer part together) as a percentage of what the company spends per month. Lower means more for the person. The marker shows your amount.
- Trade license, 60/40 method
- Trade license, flat-tax method (up to 2M CZK a year)
- Employee
Where the cost of an employee goes
Per month, in CZK, by company budget. Social and health insurance include the employer’s part (24.8% and 9% on top of the salary) and the employee’s part (7.1% and 4.5%).
- Net salary
- Income tax
- Social insurance
- Health insurance
Employment rates for 2026
| Employee pays | Employer pays on top | |
|---|---|---|
| Social insurance | 7.1% | 24.8% |
| Health insurance | 4.5% | 9% |
| Income tax | 15%, 23% above 146,901 a month | – |
| Basic tax credit | −2,570 a month | – |
| Insurance total | 11.6% | 33.8% |
- Minimum wage: 22,400 CZK a month. Average wage: 48,967 CZK.
- Maximum assessment base for social insurance: 2,350,416 CZK a year.
DPP: agreement to perform work
- No social or health insurance up to 11,999 CZK a month per employer. From 12,000 CZK the full rates apply. Several DPPs with the same employer are added together.
- At most 300 hours a year per employer (1,280 hours for seasonal farm work from April to November).
- Income tax of 15%; with a signed tax declaration the basic tax credit applies.
- Since April 2026 every DPP is reported in the employer’s single monthly report, even below the limit. DPP workers are entitled to paid holiday.
- For comparison, a DPČ has an insurance limit of 4,499 CZK a month.
Why companies work with trade license holders
Lower cost
No 33.8% employer insurance on top of the salary. The company pays an invoice, and the person still keeps more.
No sick pay or holiday
No wage compensation for days 4 to 14 of sickness and no paid holiday to fund or plan around.
Flexibility
No notice periods, severance or working-time rules of the Labour Code. The cooperation ends on the terms of the contract.
Less administration
No payroll, no monthly reports and no insurance registrations for the company.
Specialists and projects
Ideal for expert, project, part-time and remote work, and for short engagements.
Better for the person
60% flat expenses or the flat-tax method, several clients, their own tools and their own schedule.
Watch out for švarcsystém
A trade license is not a cheaper label for a job. If the work is in fact dependent work, it must be done in an employment relationship. Signs of dependent work:
- a superior and a subordinate: the company gives instructions on how to do the work
- the work is done personally, in the company’s name and on its responsibility
- at the company’s workplace, at fixed hours, for a fixed monthly amount, for one client only
Labour inspection fines go up to 10,000,000 CZK for the company and up to 100,000 CZK for the person, plus back payment of insurance. Real independence protects both sides: several clients, an agreed result instead of hours, your own tools and your own schedule.
What these numbers assume
- The same amount every month for a full calendar year.
- Employee: the basic tax credit only (tax declaration signed), no children, no other income and no benefits.
- DPP: only up to 11,999 CZK a month, with a signed tax declaration.
- Trade license: the company’s full budget is invoiced, main activity, public health insurance, 60/40 flat expenses or the flat-tax method (60% group, up to 2,000,000 CZK a year), no VAT.
Hiring or being hired?
We check the contract and the numbers before you sign.
In a consultation we compare your options and the risks for your situation.
