The government has approved an increase in the minimum wage to CZK 24,900 per month with effect from 1 January 2027. The corresponding hourly rate will be CZK 148.30 for a standard 40-hour working week. The increase is based on the indexation mechanism laid down in the Labour Code, with its parameters determined by a government regulation. The government is required to set the relevant coefficients by regulation every two years, which are then used to calculate the minimum wage.
The monthly minimum wage is calculated as the product of the forecast average gross monthly nominal wage in the national economy for the following calendar year and the coefficient used to calculate the minimum wage. For 2027 and 2028, the approved coefficients are 0.446 and 0.458, respectively.
The level of the minimum wage affects, among other things, the following parameters in the areas of taxation and health insurance:
- The minimum income threshold for entitlement to a tax bonus for a dependent child, which is set at six times the minimum wage. Only income from employment and self-employment is taken into account when calculating this threshold. In 2027, the threshold will be CZK 149,400. To receive the monthly tax bonus, the total employment income for the relevant calendar month must reach at least half of the minimum wage, i.e. CZK 12,450.
- The amount for the tax exemption of regularly paid pensions, which under the Income Taxes Act is set at 36 times the minimum wage. In 2027, this amount will be CZK 896,400. Any part of a pension exceeding this threshold is subject to income tax.
- The minimum assessment base for health insurance for persons without taxable income (OBZP), which is equal to the minimum wage. In 2027, the health insurance contribution will therefore amount to 13.5% of the minimum wage, i.e. CZK 3,362 per month.
