In February, all employees in the Czech Republic will notice a decrease in their paychecks ranging from several hundred to a few thousand crowns, attributed to the implementation of the government’s consolidation package. This change, notably the reintroduction of employees’ payment of sickness insurance, is now manifesting in reduced earnings for workers across various income brackets.

The reinstated sickness insurance amounts to 0.6 percent of gross income, translating to tangible reductions in take-home pay for employees. For instance, individuals with a gross income of 25,000 crowns will see a deduction of 150 crowns, while those earning 50,000 gross will experience a reduction of three hundred crowns. Similarly, employees with a gross income of 75,000 crowns will face a deduction of 450 CZK.

Josef Středula, the head of unions, expressed concerns over the impact of reduced pay on employees’ ability to manage essential expenses like rent and food, particularly for those whose wages have not been increased. Notably, state administration employees, who did not see salary increases last year due to a government freeze, are among those affected by the deduction.

The government justifies the move by citing the previous abolition of sickness insurance payments, during which employees received no compensation for the first three days of illness. However, with the current scenario no longer featuring this exemption, the government deems employee contributions necessary to stabilize the state treasury.

Despite the reduction in take-home pay, employees remain entitled to sick pay from sickness insurance and various other benefits such as maternity, paternity, or nursing benefits as needed. While the consolidation package aims to bolster fiscal stability, the immediate impact on employee finances underscores the delicate balance between fiscal prudence and social welfare considerations.

Article by Prague Forum