Employer obligations: what not to forget?
After the employees have started, you will be expected to handle payroll and regular contact with the authorities. Other formalities are involved when employees leave the company. Read on to find out what to think about.
What to do before you start?
As a new employer, you cannot do without registering with the tax office, health insurance companies and the district social security administration (OSSZ). You will also report the start of each employee to the insurance companies and the OSSZ - always within 8 days of the event.
Every employer in the Czech Republic is also obliged to take out employers' liability insurance with Kooperativa. You must also arrange an employment contract, occupational health and safety training and a compulsory medical examination with the new employee before they start work.
Are you interested in details? We cover the topic in more detail in our article on employer's obligations before employees start working.
Obligations during the employment relationship
Among the main necessities that you as an employer have to face are regular deductions from the employee's gross wages. However, you will not avoid other administrative tasks either.
An essential obligation during the employment relationship is the regular deduction of the insurance contributions from the employee's gross wages. You then send this amount, together with the insurance premiums you pay on the employee's behalf, to the account of the relevant Social Security Institution.
The insurance premiums are always due by the 20th of the following month (e.g. you pay the insurance premiums for January by the 20th of February). You must also submit a completed 'Insurance premium statement' to the Social Security Institution by the same deadline .
If your worker is unable to work for more than 14 days during the year, you fill in the form "Annex to the claim for benefits" and then submit it to the Social Security Institution.
After the end of each calendar year (by 30 May of the following year), you must then submit a "Pension Record She et" for each employee to the Social Security Office. One copy is also given to your employee.
Health insurance company
Similar to social insurance, you also deduct health insurance premiums from the employee's gross wages each month. You then pay the amount deducted, together with the employer's premium, to the relevant health insurance company.
You also send a "Summary of Employer's Premium Payments" to all your employees' insurers each month. The deadline is again the 20th of the following calendar month.
In addition, if an employee accidentally suffers a work-related injury, you must provide the insurance company with a copy of the accident record no later than the 5th day of the following month.
The tax office
As an employer, you deduct an advance payment of income tax (i.e. withholding tax) from the employee's gross wages each month, which is paid to the tax authorities.
No later than 2 months after the end of the calendar year (by 20 March in the case of electronic filing), you then submit to the tax office the Employment Tax Statement and, if applicable, the Withholding Tax Statement at the special income tax rate.
After termination of employment
As soon as the employee's employment relationship ends (i.e., for example, after the expiry of the notice period), it is necessary to issue the mandatory documents to the employee and to conclude the whole matter with the Social Security and Health Insurance Institutions as well.
No later than 8 days after the end of the employment relationship, you must deregister the employee from the Social Security Institution using the same form you used during the registration process. However, in the header of the document you will select the type of action "notice of termination of employment". Furthermore, do not forget to submit the Pension Insurance Record Sheet to the Social Security Office within 30 days of the employee's departure.
Health insurance company
You follow a similar procedure when notifying the employee's health insurance company of the change. In this case, you have 8 days from the date of termination of employment to submit the "Employer's Bulk Notification" document, this time indicating the termination code.
Documents for employees
You will issue the employee with a certificate of employment, which should include the following:
- Type of employment relationship (HPP, FTE, LTC),
- duration of employment,
- the time worked,
- the type of activity performed,
- the qualification obtained by the employee,
- information on deductions from wages.
You must also issue the employee with a Taxable Earnings Certificate and Pension Record Sheet on the date of termination. The official form can be found on the CSSA website.
Worry-free payroll accounting
Navigating the tangle of tax laws is not easy. Save yourself the stress and leave payroll accounting to the professionals. Contact us using the form below to discuss the details.