The employer's contribution to the annual limit of 30 000 CZK for life insurance, pension or additional pension savings is tax advantaged. From the employer's contribution does not pay employee tax on personal income tax, social security or health insurance, and the employer does not pay social insurance and health insurance. The employer can contribute to the employee eg. only to the contract of life insurance or can contribute to the employee on a contract of life insurance and a contract on supplementary pension savings at the same time. "Until exhaustion monthly allowance of 2 500 CZK is thus both employees and employers in tax terms more advantageous to increase employers' contributions to employee contracts than gross wages by the same amount, "explains Emil Brooch, CEO FinFocus.
How high is the cost savings?
The monthly employer contribution to legislation supported financial products amounting to CZK 2,500, it costs the employer 2,500 CZK, while increasing gross wage employees by 2500 CZK labor costs will rise due to the payment of compulsory insurance for 3350 CZK. When pumping monthly contribution by the employer to contract in the amount of CZK 2 500 employee receives at its financial products full amount, while increasing gross wage of CZK 2 500 but increases net salary the employee received on account of only 1714 CZK, precisely because of the payment taxes on personal income tax and the mandatory premiums from the gross salary.
The contribution can draw on agreement
One of the most popular company benefits the employer contribution to the employee's contract of life insurance, pension insurance and supplementary pension savings. Employers may continue to contribute to the contract and employees working under agreements, and to the same extent as employees working under a standard employment contract for an indefinite period. "Entitlement to the employer's contribution to supported financial products should be arranged directly in a written agreement for work or contracts for work, another option is to negotiate a contribution in the collective agreement or internal regulation of the employer, "explains Emil Brooch.
The amount of contribution is not limited to the contract
Employers can help employees on a contract arbitrarily high amount. Tax-deductible for the employer's contribution of any amount. From the annual contribution agreements above the statutory limit of CZK 30 000 employees but has a standard levy a tax on personal income, social insurance and health insurance, and employers compulsory insurance. Employees working for multiple employers at the same time can be a contribution for a contract of life insurance, pension insurance and supplementary pension savings from all employers.
When lower taxes while working on a deal?
The employment agreement and an agreement on work activity must be made in writing to be valid. One copy of the agreement the employee and one employer. Work on the agreement is attractive to employers and employees for extra income. The advantage is a simpler administration and lower taxes to the limit. Employees working on the deal have, inter alia, entitled to severance pay or vacation. Work organization is at work on a deal simpler for employers, which is especially appreciated in its high season, when receiving volunteers.
The agreement to complete a job with a monthly fee of 10 000 CZK and less pay health insurance and social insurance, employee or employer. In contracts for work are not paid compulsory insurance at a monthly salary of less than 2,500 CZK. On the basis of contracts for work an employee can work for the employer maximum of 300 hours per year. The amount of remuneration is not limited, for work performed can be arranged arbitrarily high reward.
Source: tz