Payroll Newsletter - Spring 2021
Tax changes, news, practical information
An overview of the news from the payroll environment in one place. This is our quarterly payroll newsletter. Scroll through the current release.
2021 Time-off – Bank Holiday
From 1 January 2021, the amendment to the Labour Code enables taking time-off on a bank holiday, if the employee has a shift planned on that day and asks for time-off exclusively on this particular date (in the original wording, the bank holiday always had priority). If the employer does not need the employee to work the shift, it will always be regarded as a “paid bank holiday”. In cases where the employee takes longer time-off, e.g. a week, and the bank holiday should be their regular working day, the current legal regulations continue to apply – i.e. the holiday is not included in the time off.
Contribution to Self-Testing
On 24 February 2021, the Czech Government passed Resolution No. 191 regarding contributions to employees and self-employed persons for covid-19 self-testing. Based on this resolution, the self-testing for employees and self-employed persons is supported by the insurance companies’ prevention fund in the amount of max. CZK 60 for no more than four tests per month and employee. The contribution is applicable for tests included in the List of antigen tests for which an exception has been issued by the Ministry of Health pursuant to Section 4 (8) of Government Directive No. 56/2015 Coll.
The employer can apply for such contribution through a special portal. Registration is made using an activation code sent to the data box or requested through an online form, which is available on the website.
Subsequently, the employer records information regarding the performed tests on a monthly basis. Furthermore, the applicant has to provide a receipt/tax document for the purchased tests. Detailed conditions for the use of such contribution are available on the website.
Extending the Validity of the “Isolation” Contribution until 30 June 2021
On 30 April 2021, Act No. 182/2021 was published in the Collection of Law, extending the validity of the extraordinary “Isolation” contribution until the end of June 2021. The extraordinary contribution continues to be paid to employees with ordered quarantine or isolation during the first 14 calendar days of the quarantine/isolation, amounting to CZK 370 per calendar day and not exceeding 90% of the average earnings for the relevant number of missed hours in the period. Employers shall continue to subtract the paid contributions from the paid social security contributions.
Crisis Attendance Allowance – Additional Payments
In connection with the adoption of the amendment to Act No. 438/2020 Coll., pursuant to which crisis attendance allowance is provided, the rate for the calculation of attendance allowance has been increased retroactively from 1 March 2021 from 70% to 80% of the reduced daily assessment base.
The contribution is paid retroactively for the period from 1 March 2021; no application is required.
The additional contribution does not apply in cases where, thanks to the minimum amount of the attendance allowance (CZK 400 per calendar day), the granted contribution already amounts to 80 % of the reduced daily assessment base or exceeds it.
Extension of the Possibility of Receiving Attendance Allowance
At the end of April, an amendment to the crisis attendance allowance was published in the Collection of Law, which, in addition to the increase in attendance allowance payments, brings an extension of cases where such allowance can be provided. Currently, due to the closing of schools and children’s establishments, the attendance allowance also applies to parents of children with special educational needs pursuant to the Education Act, if the child cannot attend school due to extraordinary measures during the epidemic and is ten years old or older. The attendance allowance can be applied for retroactively from the beginning of March.
Another change in the possibility of receiving the attendance allowance is the extension of the category of persons who can receive such allowance arising from the closing of schools and children’s establishments. The allowance can newly be granted not only to parents and persons in the same household but also to close relatives, regardless of their fulfilling the condition of living in the same household. Most often, this will include grandparents, aunts, uncles and brothers or sisters. The amendment became effective on 30 April 2021.
Employment Office of the Czech Republic – Possibility to Register at the Employment Office When Still Employed
In addition to unemployed people (job seekers), people who have a job but want to change it, people in the notice period, those who study or look after a child under four years of age may also register at the Employment Office. These people shall register as job applicants by filling in an application for registration. The application may be filed electronically (through a data box or by e-mail with an electronic signature), sent by regular mail or handed in at the filing office. Unlike a job seeker, anyone interested in job matching can become a job applicant. After a person has registered as a job applicant, the Employment Office may provide a job matching service, career advisory, suitable retraining or include the job applicant in one of its projects, such as “Outplacement”, which focuses on helping everyone who could lose their jobs or who might need to register as unemployed (not only due to large-scale dismissal) at the Employment office.
Antivirus and Short-Time Work (Kurzarbeit)
The current form of the Antivirus programme was valid until the end of May 2021. On the meeting of 31 May, the Government decided that this programme shall only continue in the A mode in June, if the expenses were incurred due to significant obstacles at work on the employee’s part, consisting in an ordered quarantine. Therefore, only those employers shall receive the contribution for June 2021 whose employees were ordered quarantine or isolation due to the covid-19 infection. The B and A plus modes of the Antivirus programme are therefore terminated. The A mode can no longer be used in relation to forced restrictions of operation.
The Parliament of the Czech Republic still discusses the amendment to the Employment Act, which regulates the new institute of “Contribution during Short-Time Work” (“Kurzarbeit”). The amendment has already been adopted by the Chamber of Deputies and is currently subject to discussion in the Senate. Given that short-time work will become effective on the first day of the calendar month following its declaration, it is clear that it will not yet be possible to use the new institute in June, which, to a certain extent, replaces the current Antivirus programme.
The following conditions should apply to short-time work itself:
- Period of contribution – up to 12 months;
- Activation of the Government decree; and
- Contribution paid to employees with labour relation of at least 3 months.
The paid contribution should amount to 80% of the wage of the particular employee, including insurance paid by the employer from this part, up to the maximum of 1.5 times the average wage in the national economy in the first three quarters of the previous calendar year.
Monetary Meal Allowance – Specification within the Additional Statement of the General Financial Directorate regarding the Monetary Meal Allowance
From 1 January 2021, employers can provide another form of meal contribution, i.e. the monetary meal allowance, which represents an alternative to meal vouchers.
Following the prior issue of the Payroll Bulletin – Winter 2021 we bring selected specifics of meal contributions and their solution:
Shift length: the meal contribution can be used as an expense for tax purposes if an employee’s presence at work during a single shift lasts at least 3 hours (the employer is entitled to set higher limits for the contribution entitlement, e.g. 4 hours, 4.5 hours and more).
Tax exemption in the case of a shift exceeding 11 hours: the amount exceeding CZK 75.60 within one shift will represent taxable income. On the part of the employer, it will represent a tax-deductible expense in full.
Tax exemption for taxpayers working under a contract for work and agreement to perform work: the condition is the definition of a certain portion of the working hours (exactly defined shifts), preferably explicitly in the relevant contract, and an attendance record. Afterwards, the monetary meal contribution can be assessed similarly to other employees with an employment contract.
Tax exemption for statutory executives based on a contract for the performance of a function: the condition is the definition of the working hours in the contract for the performance of a function, as well as an attendance record. Based on this, the contribution can be assessed as income exempt from tax up to a certain limit. From the company’s perspective, this contribution can be used as a tax expense if the conditions are fulfilled and if the length of the statutory executive’s presence at work during a defined part of the working hours is at least 3 hours.
Home office and monetary meal contribution: a monetary meal contribution can be provided under the condition that the place of residence is agreed upon contractually as the workplace and it is at the same time provable that the employee worked at least 3 hours within a single shift, which is confirmed by the working hours record.
More forms of meal support or their cumulation: from the tax perspective, the employer can choose what type of meal support will be provided, but each employee can only use one option in the tax-advantaged mode. However, it is possible for a part of employees to use the employer’s canteen, another part to receive meal vouchers and yet another part to receive a monetary meal contribution.