How does the isolation allowance work?
If your employee is ordered to quarantine or isolate, they must stay at home, and during this period you will pay them wage compensation of only 60% of their wages.
The isolation allowance is an additional payment of up to CZK 370 per day (including non-working days). The employee receives it alongside wage compensation for the first 14 days of quarantine. Employees ordered to quarantine during the allowance's period of validity, i.e. from 23.12.2021, qualify. Since approval came later than the government had announced, employees whose quarantine began on 30.11. or later and lasted at least until 23.12.2021 also qualify. That will be very few people.
This allowance is not subject to contributions or income tax. Employees who worked from home during their ordered quarantine do not qualify.
How does it work for employers?
The Czech Social Security Administration receives information about your employee's quarantine from their doctor. You simply deduct the isolation allowance from the social-security payment for the month of the employee's quarantine and report the deduction in the monthly statement of contributions. If you do not deduct the allowance in time, you have up to 3 months to do so. Put simply, you deduct what you pay the employee from your social-security contribution payment. The allowance therefore costs you, as the employer, nothing.
As usual, the allowance amount is not simple to calculate — I recommend using the calculator provided by the Ministry of Labour and Social Affairs.
This is certainly one of the simpler allowances: the only tricky part is calculating the amount. Naturally, I will help my clients with everything and handle it all. If you are unsure, do not hesitate to get in touch and we will look at it together. 🙂