What is the difference between supergross, gross and net salary in the Czech Republic?
Up until 1.1.2021, the income tax had been deducted from the super gross salary. What does the terms super gross, gross, and net salary mean?
Super gross salary
The super gross salary is the employee’s gross salary plus the percentage of social security and health insurance payments that are paid by the employer. This means:
- 25% for the social security insurance
- 9% for health insurance
The difference between the super gross salary and net salary (the actual amount of money the employee receives) is with the average Czech salary over 40%.
The gross salary is the amount you will agree on with your employer/employee. The reason for the gross salary being used and not the net salary is that different people may have different bonuses and tax discounts, which can influence the final calculations.
The net salary is the actual amount the employee will receive. It is counted from the gross salary in the following way:
- 6,5% for the social security insurance
- 4,5% for the health insurance
- 15% for the income tax (15% from the super gross salary)
From the income tax, we can deduct tax discounts. All employees can claim the basic tax discount, which for the year 2020 reached 24 840 CZK. Additional discounts, such as the student tax discount, the disability discount, or the child discount (only one parent can claim these) can also be deducted from the final income tax amount.
Since counting the final net salary amount can be complicated, there are net salary calculators available online that will do the counting for you.
Changes in 2021
Since 1.1.2021, the super-gross salary concept has been abolished for 2 years. Instead, the 15% income tax is deducted from the gross salary.