• 24/02/2023
  • By wizewebsite
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The limit for extra earnings, school and bonus for the child increases<

From the beginning of 2022, the minimum wage will rise by one thousand crowns to 16,200 crowns gross per month. In hourly terms, it will increase by CZK 5.90 to CZK 96.40.

Although the minimum wage applies only to the lowest paid employees (139 thousand, which is less than four percent), its increase also affects others.

At the same time, the so-called guaranteed salary, i.e. the basis for other professions in the private sector, is also growing. We have described its increase in detail in a separate overview. For example, the minimum for "garbage collectors" will rise to CZK 17,900, for cashiers to CZK 19,700 and for bus drivers to CZK 24,100.

However, some other limits that are not directly related to remuneration for work also depend on the minimum wage set by the state. We will now look at them in more detail:

Go through the other effects of the increase in the minimum wage:

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Additional earnings of a job seeker

A job seeker who is registered with the labor office can legally earn a maximum of half the minimum wage. The limit for so-called non-conflicting employment will therefore rise to CZK 8,100 per month in 2022 (in 2021 it reaches CZK 7,600).

The condition for such additional income remains that the applicant does not receive unemployment benefits - because at the same time, you cannot legally earn a crown. Therefore, non-conflicting employment usually comes into play only after the support has been exhausted.

Why should a working person continue to remain in the official register of applicants? Leaving aside the interest in the employment office providing him with a better job, the main advantage is that the state pays for the applicant's health insurance.

The applicant can earn extra in the form of an employment contract (employment relationship) or agreement on work activities, not through an agreement on the execution of work.

School fees

"Discount for placing a child" allows one of the parents to deduct from their taxes expenses that they have demonstrably spent on a kindergarten or similar care facility for pre-school children in the relevant calendar year.

The discount, called kindergarten fee for short, can reach a maximum of the monthly minimum wage for the entire calendar year. You can thus deduct up to CZK 15,200 from taxes for 2021, while it will be up to CZK 16,200 from taxes for 2022.

The limit for additional income, school fees and bonus will increase per child

However, you can only deduct actual expenses from taxes, their amount is confirmed by the nursery school operator. The mentioned limit is therefore not a flat rate to which every parent is automatically entitled.

Tax bonus for child discount

While you can deduct normal discounts (for the taxpayer, spouse...) from tax only up to the amount of the calculated tax liability, you can also use the tax bonus for the so-called dependent child benefit .

This is a situation when, after deducting the discount, you end up "in the red" - the right to a tax benefit is higher than the originally calculated tax liability. The resulting difference becomes a bonus. Thanks to it, you not only pay no taxes, but also get something from the state.

The tax bonus can only be claimed by those who earn six times the monthly minimum wage - for income for the year 2021 it is therefore CZK 91,200, for the year 2022 the lower limit will increase to CZK 97,200.

From 2021, the bonus payment is no longer capped. Deputies decided to cancel the limit of 60,300 crowns as part of the tax package. Parents with four or more children can therefore get more money from the state.

Persons without taxable income

The so-called persons without taxable income must pay an advance for health insurance as 13.5% of the amount of the minimum wage. For 2022, the deposit will increase to 2187 CZK, while in 2021 it is 2052 CZK.

These are persons who have no taxable income (from employment or business), but at the same time do not belong to the category for which the state pays health insurance. These mainly include:

Pension taxation

Pensions are generally exempt from income tax. It must be taxed only if the annual income from all received pensions (in addition to old-age pensions, for example, disability pensions) exceeds 36 times the minimum monthly wage.

In 2022, pensions up to an annual amount of CZK 583,200 (on average CZK 48,600 per month) will be exempt from tax, while in 2021 it is CZK 547,200.

Let's also remember that the so-called guaranteed wage, i.e. the basis for other professions in the private sector, is growing at the same time as the minimum wage. It is graded according to the complexity, responsibility and effort of the work into eight levels. We will look at them one by one.

1. group of work

minimum for 2022 will rise to 16,200 CZK per month or 96.40 CZK per hour (in 2021 it is 15,200 CZK per month or 90.50 CZK per hour)

Examples:

2. group of work

minimum for 2022 will rise to 17,900 CZK per month or 106.50 CZK per hour (in 2021 it is 16,800 CZK per month or 99.90 CZK per hour)

Examples:

3. group of work

minimum for 2022 will rise to 19,700 CZK per month or 117.50 CZK per hour (in 2021 it is 18,500 CZK per month or 110.30 CZK per hour)

Examples:

4. group of work

minimum for 2022 will rise to 21,800 CZK per month or 129.80 CZK per hour (in 2021 it is 20,500 CZK per month or 121.80 CZK per hour)

Examples:

5. group of work

minimum for 2022 will rise to 24,100 CZK per month or 143.30 CZK per hour (in 2021 it is 22,600 CZK per month or 134.40 CZK per hour)

Examples:

6. group of work

minimum for 2022 will rise to 26,600 CZK per month or 158.20 CZK per hour (in 2021 it is 24,900 CZK per month or 148.40 CZK per hour)

Examples:

7. group of work

minimum for 2022 will rise to 29,400 CZK per month or 174.70 CZK per hour (in 2021 it is 27,500 CZK per month or 163.90 CZK per hour)

Examples:

8. group of work

minimum for 2022 will rise to 32,400 CZK per month or 192.80 CZK per hour (in 2021 it is 30,400 CZK per month or 181 CZK per hour)

Examples:

Government Regulation No. 567/2006 contains further concrete examples and a general description of individual groups.

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Petr Kučera

Editor-in-chief of the website Peníze.cz. It focuses on a wide range of personal finance and consumer topics. He graduated from the Faculty of Law of Charles University in Prague, but he likes the media even more than paragraphs. He led the coverage of the Czech... More articles by the author.

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