The change mainly targets people working under multiple agreements who use the option of an “unlimited” number of DPP agreements up to CZK 10 thousand without contributions. From 2024, agreements should attract contributions in these cases:
- an employee works under a DPP agreement for one employer and their monthly pay exceeds 25% of the average wage;
- an employee works under DPP agreements for several employers and their combined monthly DPP earnings exceed 40% of the average wage.
The thresholds at which contributions become payable would therefore change every year. The Czech Social Security Administration announces the average wage for each year. For 2023, it is calculated at CZK 40,423, so the above thresholds would be approximately CZK 10,105 and CZK 16,169 for 2023.
For example, if an employee had 2 agreements paying CZK 10 thousand a month each, assessed separately they would not attract contributions (the current position). Under the amendment, each employer would have to pay contributions on these earnings because the combined DPP total exceeds the 40% threshold.
These changes also involve plans to introduce a register of workers under DPP and DPČ agreements. Employers would gain a new obligation to report their agreement workers to it. The register would be used to check how many agreements a person has and with which employers.
I do not expect such a register to be freely accessible. It therefore remains unclear how an employer will establish whether their agreement worker also works elsewhere, or how cases where the employee conceals this information will be handled…
These proposed changes have not yet been approved, and I will of course keep you informed of any changes and their effective dates. 😊 If you are unsure, do not hesitate to get in touch and we will look at it together. 🙂