Changes for employers in social insurance when employing Agreements to work

Registration is compulsory from 1 July 2024 for all employees with Agreement to work (ATW) as well as for all employers who have only employees with ATW.

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Changes for employers in social insurance when employing Agreements to work

What is changing from 1 July 2024?

1) Evidence of ALL employees working based on ATW is implemented.

  • Until now, employers have registered their employees (in the register of insured persons of the Czech Social Security Administration), only if they became eligible for sickness and pension insurance (income limit of CZK 10,000). Now, employers are obliged to register every employee based on ATW, regardless of whether they are obliged to participate in insurance.
  • By 20 August 2024 at the latest, employees who started before 1 July 2024 must register if they have not yet been registered and their ATW continues in July 2024.
  • Employees can be registered in the standard way as employers are used to (the form “Notice of Commencement of Employment (Termination of Employment)”, which may be part of the employer’s payroll and HR software, or this function is also included in the newly prepared form for reporting income: e-Submission of the VPADPP “Statement of Income Accounted for by the Employer to Employees Operating on the Basis of an ATW”. This means that employees can also be registered by filling in the income statement. The employer has a choice as to which option to use. The new electronic form will be available on the Czech Social security website from 1 August 2024.
  • Employees who have already been registered shall not be registered again.

 

2) An employer who has so far employed only uninsured employees based on ATW, must register in the Register of Employers of the Czech Social Security Administration by 31 July 2024 at the latest.

  • Until now, the obligation to register as an employer has only applied to employers who employ at least one employee who became eligible for sickness (and pension) insurance.
  • The new legislation imposes the obligation to register all employees with ATW, and therefore it also requires the registration of those employers who employ only employees with ATW who have never participated in the insurance.
  • The application is submitted on the prescribed form “Application to the Register of Employers”.

 

3) Every month, the employer electronically reports a list of all employees with ATW (both insured and uninsured) and their income.

  • The report is sent monthly via employer’s SW or the Czech Social Security ePortal by the 20th day of the following month.
  • The report shall be sent for the first time in the month of July with deadline 20 August 2024.
  • The employer will use the new e-Submission of the VPDPP “Statement of Income Charged by the Employer to Employees Operating on the Basis of ATW”.
  • The new VPDPP e-Submission will be available to employers on the CSSA website from 1 August 2024

 

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Former newsletters to review:

Legislative changes affecting corporate taxes and VAT in Czechia in 2024 – SME Info Czechia 2024-01

*  *  * 

Part II  Legislative changes impacting payroll in Czechia  – SME Info Czechia 2023-04-2

*  *  * 

Part I   Legislative changes impacting payroll in Czechia  – SME Info Czechia 2023-04

 

The purpose of SME INFO is to provide general information and to draw the attention to the current changes in law which we believe to be important for the business operation of our clients. It is not a replacement for careful review of the acts and rules and the consultation with your tax advisor. © Copyrights 2023, Process Solutions, – All rights reserved

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