Payroll Newsletter - Summer 2020
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.
Partial remission of penalties for outstanding social security and health insurance contributions
If the employer does not pay the social security premiums and the contributions to the state employment policy (hereinafter the “premium”) for the calendar months of May 2020 to July 2020 within the statutory deadline, or pays the premiums in a lower amount and the incurred debt is repaid by 20 October 2020, the penalty will be reduced from approximately 20% p.a. of the amount owed to a fifth, i.e. 4% p.a. The condition for the reduction of the penalty is that the employer has paid part of the premiums for their employees for all calendar months within the statutory deadline and in the amount specified in the insurance premium overview.
Thus, the debt on the premiums and penalties incurred in the period from 21 June 2020 to 20 October 2020 is not considered a debt for the purposes of confirming no outstanding payments on the employer’s part.
Remission of penalties relating to health insurance
At the end of March, the Public Health Insurance Act was amended to ease the situation for payers of insurance premiums. Outstanding premiums of an employer for employees relating to the period from the beginning of March 2020 to the end of August 2020 are thus not subject to any penalty, namely until 21 September 2020. This does not apply to premium payments for February 2020, which are due by 20 March 2020.
Regime B – extended until 31 August 2020
Regime C – remission of social security premiums for employers with up to 50 employees
The social security premiums are remitted for June, July and August 2020. Only premiums paid by the Employer amounting to 24.8% of the assessment base are remitted, while the amount of the assessment base that can be deducted is capped at CZK 52,253 thousand. The amount of premium paid for employees remains unchanged.
The employer can claim the remission using the “Premium Amount Overview” form, which will be, for the relevant months, supplemented by a reduced assessment base.
Conditions for claiming the remission of social security premiums (their fulfilment is determined for each month separately):
- The premiums can be reduced by employers that, as of the last day of the month, do not employ more than 50 employees who participate in the sickness insurance system.
- The number of employees determined at the end of each of the 3 months did not decrease by more than 10% compared to 31 March 2020.
- The sum of assessment bases of employees in a single month did not decrease by more than 10% compared to 31 March 2020.
- The employer has paid insurance premiums for their employees in the amount of 6.5%.
- In the calendar month for which the employer claims the premium remission, the employer did not draw any funds from the Antivirus programme – regime B.
The employer who has already submitted the Overview for June, July and August cannot additionally claim the premium remission.
Czech Social Security Administration (CSSA) and the digitisation of mandatory forms and payments
With effect from 1 July 2020, the Employer is now obliged to submit all forms to the relevant CSSA (notification of the commencement/termination of employment, pension insurance record sheets, annexes to health insurance benefits, etc.) exclusively in electronic form via e-filing directly from the payroll system, through the CSSA e-portal, or a data box.
If, for any reason, it is impossible to deliver the form to the CSSA in electronic form, the reason for the submission in paper form must be stated.
Documents regarding an allowance for nursing a sick family member, applications for paternity post-natal care benefits and maternity allowance, as well as confirmations of the duration of temporary incapacity to work, which arose before 1 January 2020, must be submitted by employers in paper form.
Simultaneously, with effect from 1 June 2020, the cash registers of the individual CSSA permanently closed. Payments can only be made cashless to the relevant CSSA account.
Rules for drawing a nursing care allowance from 1 July 2020
From 1 July, the conditions for claiming a nursing care allowance will return to their original state. What are the conditions for drawing a nursing care allowance from 1 July 2020?
- A nursing care allowance can only be drawn for children under 10 years of age.
- An employee who is unable to work because they have to nurse a sick child or another member of the household is entitled to a nursing allowance.
- A nursing care allowance is provided for 9 calendar days, for single parents up to 16 calendar days.
- A nursing care allowance amounts to 60% of the daily assessment basis.
New formula for calculating deductions resulting from insolvency and enforcement proceedings
As already announced in the previous issue of the Payroll Newsletter, Government Regulation No. 62/2020 Coll. came into force on 1 July 2020; it fundamentally modified the formula for calculating the non-seizable amount.
From the above-mentioned date, the calculation of the non-seizable amount will proceed as follows: from the sum of the amount of the subsistence minimum and the amount of the normative housing costs per person, three quarters are now calculated (two thirds until 30 June 2020). If dependants further increase the non-seizable amount, a third (until 30 June 2020 a quarter) of the non-seizable amount for each dependant is added.
The change in the calculation of the non-seizable amount is valid for the processing of wages for July 2020 paid out in August 2020.
The Amendment to the Labour Code
The amendment to the Labour Code changes certain labour law contexts:
- Job sharing – with effect from 1 January 2021, the so-called job share arrangment can be set up;
- Taking vacation – with effect from 1 January 2021, the method of calculating the vacation entitlement for a calendar year changes. The leave is reduced to a calendar year and its proportional and additional parts, while the leave for the days worked is cancelled.
- New rules for delivering to employees – with effect from 30 July 2020
- Compensation for health damage – with effect from 1 January 2021, the institute of one-off compensation for non-property damage is introduced in the event of particularly serious damage to an employee’s health, with consequences comparable to death.
- Time off for employees – with effect from 1 January 2021, the conditions for granting salary compensation to employees active at children summer camps will be updated to include similar activity at children training camps.
- Posting employees abroad – with effect from 30 July 2020, the information obligation to employment agencies that send employees abroad is extended; also, the application of the provisions of the Labour Code is extended.
- New rules regarding the termination of employment – with effect from 30 July 2020, the conditions for the termination of employment within transition in the event of transfer of activities are extended.
- Provision of a certificate of employment – with effect from 30 July 2020, there will no longer be an obligation to issue certificates regarding agreements to perform a job which did not establish participation in the sickness insurance system and under which the remuneration was not subject to salary deductions.