Taxes
How Much Will a Sole Trader (OSVČ) Pay in Taxes and Contributions in 2026?
· 3 min read
Sole traders (OSVČ) pay three main levies: income tax, social security contributions, and health insurance. We explain how they are calculated, what the minimum monthly advances are for 2026, and how much a sole trader earning CZK 1.2 million will actually pay.
Quick take
- Personal income tax is 15%, rising to 23% on any tax base exceeding CZK 1,762,812 per year.
- Social security is 29.2% of 55% of the tax base; health insurance is 13.5% of 50% of the tax base.
- The minimum annual contribution for primary self-employed activity is CZK 60,060 for social security and CZK 39,672 for health insurance.
- The basic taxpayer tax relief is CZK 30,840 per year.
How Contributions and Taxes Are Calculated
The starting point for all three payments is the difference between revenue and deductible expenses — the tax base. You can claim expenses either in their actual documented amount under tax records (daňová evidence) or via flat-rate statutory expenditure percentages (80 / 60 / 40 / 30%) capped at CZK 2,000,000 of income. Income tax is calculated on the entire tax base, whereas contributions are calculated on a fraction of it: 55% of the base for social security and 50% of the base for health insurance.
Rates and Thresholds for 2026
The following figures are used in our calculation tools for the 2026 tax year.
| Item | Value for 2026 |
|---|---|
| Personal income tax rate | 15%, and 23% for tax base exceeding CZK 1,762,812 |
| Basic taxpayer tax credit (sleva na poplatníka) | CZK 30,840 / year |
| Social security contribution rate | 29.2% of 55% of the tax base |
| Health insurance contribution rate | 13.5% of 50% of the tax base |
| Minimum social security (primary activity) | CZK 60,060 / year (CZK 5,005 monthly) |
| Minimum health insurance (primary activity) | CZK 39,672 / year (CZK 3,306 monthly) |
| Decisive threshold for secondary activity | CZK 117,521 tax base |
Model Calculation: Income of CZK 1,200,000, 60% Flat-Rate Expenses
Gross income CZK 1,200,000, 60% lump-sum expenses = CZK 720,000, resulting in a tax base of CZK 480,000. • Income tax: 15% of CZK 480,000 = CZK 72,000; after deducting the taxpayer credit (CZK 30,840), tax payable is CZK 41,160. • Social security: CZK 480,000 × 55% × 29.2% = CZK 77,088. • Health insurance: CZK 480,000 × 50% × 13.5% = CZK 32,400, which is below the statutory minimum — therefore, the minimum CZK 39,672 is paid. In total, you will pay approximately CZK 157,920 annually, representing around 13% of gross income.
Other Factors That Can Alter the Final Figure
Child tax credits, spouse relief, and personal deductions (pension scheme contributions, donations, mortgage interest) reduce your personal income tax, but not your social or health contributions. In contrast, operating self-employment as a secondary activity (e.g. alongside full-time employment) eliminates the statutory minimum advances, and social security is only payable once your tax base exceeds CZK 117,521. If your total tax and levy burden is substantial, compare your outcome against the flat-rate tax regime (paušální daň) or setting up a limited liability company (s.r.o.) — calculators for both options are available on our site.
What to do now
- 1Determine your annual gross income and decide between lump-sum expenditure deductions and actual documented expenses.
- 2Calculate your tax, social security, and health insurance contributions using the calculator below.
- 3Verify that your monthly advances match your latest annual overview (Přehled) — otherwise, an underpayment will arise.
When to call an accountant
If you combine employment with self-employment, earn foreign income, use a collaborating person (spolupracující osoba), or are nearing the 23% tax bracket threshold, consulting an accountant is advisable — errors in advance calculations only surface once the annual overviews are filed.
Frequently asked questions
- When do you have to pay minimum advances?
- Always when self-employment is your primary activity (hlavní činnost), even if your business is operating at a loss. Minimum advances do not apply to secondary activity (vedlejší činnost).
- When does the advance payment amount change?
- New monthly advance amounts take effect from the month following the submission of your annual overview (Přehled) to the OSSZ (Social Security Administration) and your health insurance company.
- Does the basic taxpayer tax credit reduce social and health contributions too?
- No. Tax credits and deductions apply exclusively to personal income tax. Social security and health insurance contributions are always calculated directly from the assessment base.
Sources
Author: FinTaxo expert team
Operated by: Zaklipso s.r.o.
Information valid as of: 17 August 2026
Czech original: read this article in Czech
This article is general information and does not replace individual tax, accounting or legal advice. Czech legislation changes frequently — verify the current wording or discuss your situation with us before acting on it.
Need help with this in practice?
We go through your situation in a free consultation in English and tell you exactly what has to be registered, filed and paid.
Czech accounting news, once a month
Practical updates on Czech taxes, VAT and payroll — concise and spam-free. Unsubscribe anytime.
By subscribing you consent to the processing of personal data under GDPR and to their use for the marketing purposes of FinTaxo, operated by Zaklipso s.r.o.. You can withdraw your consent at any time. See our privacy policy.