Employees working under an employment contract do not have to worry about paying for health insurance. When working under an agreement on work performance, the situation may be different. Which employees working under an agreement are exempt from taxes for the purpose of paying health insurance?
For employees working under an employment contract, health insurance is calculated and paid by the employer to the relevant health insurance company. 4.5 percent of the employee’s gross salary is deducted directly from the health insurance amount, and another 9 percent is paid by the employer.
Health insurance: the rate cannot be reduced
When calculating health insurance, there are no discounts or deductions, and the number of children is not taken into account. The health insurance rate is always the same, and there are no limitations when calculating health insurance, as is the case with social insurance. In the attached table, we have calculated the amount of health insurance for selected gross salaries.
| Gross wage | Health insurance | |
| Employee gross wage deductions | Employer deductions from gross wage | |
| CZK 20,000 | CZK 900 | CZK 1,800 |
| CZK 30,000 | CZK 1,350 | CZK 2,700 |
| CZK 40,000 | CZK 1,800 | CZK 3,600 |
| CZK 50,000 | CZK 2,250 | CZK 4,500 |
| CZK 70,000 | CZK 3,150 | CZK 6,300 |
| CZK 100,000 | CZK 4,500 | CZK 9,000 |
Notification of health insurance company change
Upon starting employment, every employee must notify the payroll department employee of their health insurance company. In order for health insurance payments to be made to the correct insurance company’s account, it is always necessary to notify of a change in insurance company. According to the law, health insurance companies can be changed from January 1 or July 1.
Health insurance under an agreement (DPP)
The health insurance contribution for employment under a work performance agreement varies depending on the monthly gross remuneration. If the monthly gross remuneration is CZK 10,000 or less, then health insurance is not paid from the monthly gross remuneration, and neither the employee nor the employer pays the insurance. However, if the monthly gross remuneration is CZK 10,001 or more, health insurance is already payable.
For whom is non-payment of insurance contributions from FSA a problem?
Non-payment of health insurance from a work performance agreement is beneficial for employees who have “insured status” recorded in the health insurance company’s register. This means they pay health insurance from their main employment, or they pay health insurance monthly as a self-employed person, or they are state-insured persons (e.g., pensioners, students, recipients of parental allowance) for health insurance purposes. However, in other cases, if you do not pay health insurance at your workplace, you will have to pay health insurance monthly as a person without taxable income (PIP).
Who is a person without taxable income?
For the purposes of health insurance payments, a person without taxable income is any insured person who is not an employee, a self-employed person, or a state insured person. Thus, in practice, employees who work only under a work performance agreement with a monthly gross remuneration of CZK 10,000 or less, who do not meet any of the above conditions, are also OHS.
What amount does OHSP pay?
Persons without taxable income are obliged to pay health insurance monthly in the amount of CZK 2,552 (i.e., 13.5% of the minimum wage of CZK 18,900). They must transfer the monthly health insurance contribution to the account of the relevant insurance company by the 8th day of the following month. The monthly payment for PWD is always the same, regardless of actual income or financial situation.
Practical example
Susan’s fixed-term contract ended in June. In July and August, she will earn extra money by working simultaneously for several employers. The monthly gross remuneration from each employer will be CZK 10,000. In July and August, Ms. Zuzana will be an OBZP for health insurance purposes and will have to transfer CZK 2,552 to her health insurance company monthly.
