The introduction of a uniform monthly employer report with the aim of simplifying, clarifying, and systematizing the processes related to employers’ reporting obligations represents one of the biggest administrative changes for employers in recent years.
You can read more about the uniform monthly employers’ report in our article at the link here.
About the act
The law introducing uniform reporting (hereinafter as the “JMHZ Act“) was published in the Collection of Laws[1] at the beginning of September and will come into effect in its majority on 1 January 2026. However, significant labour law changes will be introduced by the now approved “package of amendments” to related legislation – the Act amending certain acts in connection with the adoption of the Act on uniform monthly employers’ reporting (hereinafter as the “accompanying act“).
However, the legislative process of the accompanying act was surrounded by considerable uncertainty from the very beginning, as the original government proposal already contained changes in several areas of labour law that were intensively discussed and anticipated by the professional public. In addition to the many amendments adopted by the Chamber of Deputies, these were mainly changes proposed and subsequently approved by the Senate, which until the last moment threatened to “throw a spanner in the works” of more than one fundamental change to the original wording. Despite the time pressure due to the upcoming elections in October, the accompanying act was approved at the last meeting of the Chamber of Deputies of this electoral term in a more or less expected wording, and on the 29 September 2025, it was published in the Collection of Laws as Act No. 360/2025 Coll. For the most part, it will take effect on 1 January 2026, with a few exceptions.
In this article, we will focus on the most important news and changes according to the accompanying act (except for the employee stock option plan, or ESOP – more on that in our article here), which are the expansion of the concept of undeclared work, the clarification of the definition of employee benefits, and the new, benevolent regime for agreements on the performance of work in agriculture.
The institute of undeclared work
The Employment Act stipulates in Section 87(1) that employers are obliged to inform the relevant regional office of the Labor Office about the commencement of employment or work by EU citizens, family members of Czech and EU citizens, and other foreigners with or without a mandatory work permit, in the currently effective version, no later than on the day these people began to perform work.
The Act amending certain acts in connection with the adoption of the Act on State Social Assistance, effective from 1 October 2025, changed this so that employers will be required to report the start of employment or work of these persons no later than before the start of employment or work, i.e., in fact, one day in advance.
At the same time, it introduced a new concept of so-called unreported work, which, according to Section 5(j) of the Employment Act, will consist in failure to comply with this reporting obligation. The act also foresees the possibility of subsequent fulfillment of this reporting obligation, provided that it is done within 5 days of the date on which the person started employment or work and, at the same time, if an inspection by the State Labor Inspection Office or the regional labor inspectorate was initiated within this period.
The accompanying act regulates undeclared work with effect from 1 July 2026 (new letter k) in Section 5 of the Employment Act), whereby undeclared work will also include work performed by a person for whom the employer has not fulfilled its obligation to register them in the employee register in accordance with the Act no later than before the moment of commencing employment or performing work by this person. Responsibility for failure to comply with this obligation shall cease upon registration before the start of the inspection in general (i.e., without a time limit).
Employers now face a fine of up to CZK 3,000,000 for the new offense of allowing undeclared work.[2]
This amendment, together with the new obligation to keep records of employees in accordance with the Act, is intended to improve the detection of illegal work. Since employers must have fulfilled this obligation at the start of the inspection and cannot fulfil it retrospectively after the inspection has begun, labour inspection authorities will already have information about who may be present at the workplace at the start of the inspection, which will make their work easier.
Clarification of tax exemptions for employee benefits
Last year, the Supreme Administrative Court ruled in two cases[3] that, according to the former version of the Income Tax Act, income provided in the form of wages in -kind, i.e., non-monetary remuneration for work, could also be exempt from personal income tax. However, this interpretation of Section 6(9)(d) of the Income Tax Act (ITA) caused uncertainty, as the legislator never intended to differentiate between the tax treatment of wages or salaries depending on whether they are paid in cash or, for example, in kind.
This amendment therefore responds to the above-mentioned rulings of the Supreme Administrative Court, clarifying the wording of Section 6(9)(d) of the Income Tax Act, according to which only non-monetary benefits that “are not wages, salaries, remuneration, or compensation for lost income” are exempt from tax. Following further interpretative ambiguities regarding this clarification, the Czech Financial Administration issued information[4] specifying that, for the purposes of applying the income exemption, this change is intended to explicitly distinguish employee benefits from types of income linked to an employee’s work performance, regardless of the form in which they are provided.
The difference between employee benefits and performance-related remuneration lies simply in the performance of work itself. The provision of employee benefits is not fundamentally related to the work performed by the employee, and the employee receives benefits in addition to their wage, salary, or remuneration under the agreement. Typical examples include Multisport cards, cafeterias, or contributions to sports or culture, vacations, or health care. The purpose of these benefits is not to reward employees for their work, but to motivate them, ensure their loyalty, and make the position or employer more attractive on the job market. Benefits provided in addition to wages are tax-exempt if the legal conditions are met.
On the contrary, benefits related to the performance of work (e.g., rewards for completing a task or wages in kind) are closely linked, as the name suggests, to the work performed by the employee and are defined in Part Six of Act No. 262/2006 Sb., the Labour Code. These rewards are always subject to both income tax and social security and health insurance contributions.
The aim of the amendment is therefore to remove any doubts and confirm that the tax exemption applies only to benefits, not to remuneration for work. This is therefore purely a change in wording, and in practice nothing changes for employers or employees, and benefits remain exempt from income tax under the specified conditions.
Special regime of the agreement on the performance of work (DPP) for seasonal work in fruit and vegetable production sector
For employers in the fruit and vegetable production sector, a new amendment to Section 6 of the Agriculture Act and special agreements on the performance of work (DPP) are being introduced. This special DPP regime responds to the specific conditions in this sector. The agreement may only be concluded between an employee and an agricultural entrepreneur in accordance with Section 2e of the Agriculture Act. It will only apply from April 1 to November 30, i.e., during the main agricultural cycle for the relevant crops. In addition, the employer must meet another condition – in the previous year, they must have been a recipient of support linked to the production of selected types of fruit and vegetables with high or very high labour intensity in accordance with Government Regulation No. 83/2023 Sb. The agreement may then apply exclusively to work directly related to the production of these crops.
A key advantage is the increased hourly limit. While a standard arrangement on the performance of work allows for a maximum of 300 hours per year, under the special regime this ceiling is increased to 1,280 hours per year. This corresponds to full-time employment during eight months of the season. The limit is calculated cumulatively for all agreements between a specific employee and employer and includes substitute periods such as vacation or obstacles to work. However, if any of the conditions are not met, e.g., the agreement also includes other activities such as equipment maintenance, or is concluded outside the specified period, the special DPP regime does not apply, and the agreement is evaluated according to the standard rules of the Labor Code with a limit of 300 hours per year. However, employers may continue to conclude several agreements at the same time, one under the seasonal work regime and the other under the normal rules, if it concerns a different type of work or a different period. This new institution thus brings more flexible use of DPP in agriculture, while at the same time clearly defining the boundaries so that it is intended only for difficult and seasonal work in fruit and vegetable production sector.
Discount on insurance premiums under the Social Security Insurance Act
In connection with the new DPP regime for seasonal work described above, pursuant to the new provisions of Sections 7f and 7g of the Social Security Insurance Act, a discount on insurance premiums of 7.1% of the assessment base is introduced for employees working under this DPP for seasonal work. The purpose of this amendment is to support the fruit and vegetable sector, which is highly seasonal and often requires mainly manual labour. Thanks to the discount, this type of work should become more attractive, as employees’ net income will increase compared to the current situation. In addition, the discount will also apply to income that will be paid to employees additionally.
Conclusion
The amendment to the Act on uniform monthly employers’ reporting has several practical implications for employers. The introduction of the concept of undeclared work brings with it the threat of a penalty of CZK 3 million for undeclared work, which is intended to motivate employers to comply with legal procedures. Another change introduced is the clarification of the tax regime for employee benefits, which does not impose any new obligations in practice, but defines more precisely what is exempt from tax. This gives employers greater legal certainty. For fruit and vegetable growers, the introduction of a special DPP regime, which increases the hourly limit and reduces insurance contributions, is crucial.
Employers should prepare for the changes in good time – correctly set up internal employee record-keeping processes, review the tax treatment of benefits and, if they are engaged in agriculture, consider using the new DPP regime. This will effectively prevent the risk of penalties and at the same time take full advantage of the benefits offered by the amendment.
If you have any questions regarding undeclared work, employee benefits, or labour law in general, please do not hesitate to contact us.
[1] Act No. 323/2025 Sb., the Act on the Uniformed Monthly Employers´ Report
[2] In Section 139(2)(f) and (g) and Section 140(1)(g) and (h) of the Employment Act.
[3] Rulings as of 1 October 2024, č. j. 6 Afs 354/2023-48 a as of 14 October 2024, č. j. 5 Afs 295/2023-67.
[4] Available at the link here.
Mgr. Jakub Málek, managing partner – malek@plegal.cz
Ráchel Kouklíková, legal assistant – kouklikova@plegal.cz
Rozálie Polášková, legal assistant – polaskova@plegal.cz
2. 10. 2025