The Czech Government, Chamber of Deputies and also the Senate have decided on exempting all the freelancers from advance payments for their minimum social security and health insurance contributions.
The freelancers with a trade license, so-called živno, won´t have to pay the advance payments for the social security and health insurance contributions starting from March up until August. This applies to all the self-employed people, also to those whose regular monthly advance payments are higher than the minimum amount.
For 2020 the minimum amount for social security contributions is 2,544 CZK for the trade license as the main activity. For freelancers having their trade license as a secondary activity, it is 1,018 CZK. The amount of the minimum monthly contribution to health insurance is currently 2,352 CZK.
So how does it work, and what do you need to do?
Normally as a freelancer, you should pay your social security contributions from 1st to 20th of the current month for the previous month. With health insurance contributions, it is a bit different. The advance payments are due each month for the same month.
If you have already paid your March contributions, you do not need to worry. This advance payment will be used for your September contributions.
Basically, the advance payments are suspended for all the freelancers. No matter the amount of your monthly contribution, whether it is minimum or higher. From March until August no self-employed person has to pay anything for social and health.
Will you need to pay these contributions with the 2020 Tax Declaration?
If you are supposed to pay only the minimum amount for your contributions, then you won´t have to pay anything. If your contributions are higher than is the minimum amount, you will have to pay the difference between the minimum amount and the one you were supposed to pay.
The conclusion si that all the self-employed people will save the amount equal to 6 months of contributions to health insurance and social security. It means that all the freelancers having a trade license as their main activity will be exempt from paying 29 376 CZK in total.
The related Act still needs to be signed by the President, but there shouldn´t be any further changes to the above.
You can find all the official information related to the current situation and the adopted measures directly at the Government website.