Taxes and levies for self-employed persons in 2023: What changes are coming?

Thenew year traditionally brings a number of legislative changes. Some of them will also affect entrepreneurs. For example, self-employed persons must adjust their payment orders to new amounts.

The new amounts are based on the average wage

Even in 2023, we will not be able to avoid the usual increase in monthly payments. Why? In the Czech Republic, the amount of the minimum compulsory contributions for self-employed persons is calculated on the average wage for the year. And this amount has increased to CZK 40,324 for 2023.

Health insurance

The amount of the minimum health insurance contribution corresponds to 13.5% of the minimum assessment base, which in this case is half of the average wage - CZK 20,162. After calculation and rounding, the minimum health insurance contribution for 2023 is CZK 2,722, which is CZK 95 more than in 2022.

The new amount of advance payments will be paid for health insurance from January. The monthly advance is always due from the first day of the month for which you pay the premium until the eighth day of the following month.

Further details can be found in Act No. 592/1992 Coll., on public health insurance.

Social insurance

There are also changes to social insurance contributions. Let us just remind you that self-employed persons are obliged to pay only a contribution to pension insurance and state employment policy, at least in the minimum amount. This is calculated as 29.2% of a quarter of the average wage (CZK 10,081) for the main activity, and for 2023 it corresponds to CZK 2,944 ( CZK 103 more than this year). If you run a secondary business, you will be liable for CZK 1,178, which is CZK 41 more than in 2022.

Please note that the amount of social security contributions will only change after you submit your Income and Expenditure Statement. Social security contributions are then due by the last day of the calendar month for which you pay them.

The amount of compulsory social insurance contributions is regulated in particular by Act No. 589/1992 Coll., on social security contributions and contributions to state employment policy.

Attention! Remember that you only pay the minimum amount of social security contributions if your actual assessment base is lower than the minimum amount. The self-employed person's assessment base is calculated as half of the difference between your income and expenses. If you have high profits, your monthly contributions are likely to be higher - you can find the specific amount on your latest Income and Expenditure Statement.

Lump sum tax

The flat rate tax was introduced in 2021 to simplify administration for individual taxpayers. It works on the principle of one monthly payment, which includes income tax itself as well as social security and health insurance contributions. Switching to the flat-rate tax regime is voluntary, but you must notify the authorities in advance, no later than 10 January. Just fill in the form on the tax administration's website.

If you have already signed up for a flat-rate tax or are considering it, there are several changes that will affect you in 2023. From the beginning of the new year, the monthly payment amount will change to CZK 6,208 ( CZK 214 more than this year). This advance payment is always due by the 20th day of the calendar month to which it relates.

An amendment to the law is also under negotiation to increase the limit for entry into the flat-rate regime and to introduce new tax bands.

How much will the self-employed pay in levies in 2023?

Overall, the levies for self-employed workers in 2023 will look like this:

Type of monthly payment Amount
Minimum advance payment for health insurance 2 722 CZK
Minimum advance payment for social insurance (main activity) 2 944 CZK
Minimum deposit for social insurance (secondary activity) 1 178 CZK
Flat tax 6 208 CZK

And these are not the only tax changes that will take place in our country next year. We summarise the others in our article on tax news for 2023.

Tip! Don't forget about the other new obligations that await you from the coming year. For example, from January 2023 all self-employed persons will have to use a data box to communicate with the authorities.

Need advice on taxes and levies? Book a consultation with our experts using the form below.

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