New limits for tax exemption on health benefits in the Czech Republic from 2025 | News Flash

As of January 2024, the tax exemption on health benefits in the Czech Republic, such as non-monetary employee benefits in the field of sports, culture, health, education, recreation, etc., has been significantly reduced. The aggregate of non-monetary benefits provided to employees up to half of the average wage has been exempted from income tax (and thus from insurance premiums).

From 2025 onwards, health non-monetary benefits have been separated and two annual exemption limits are newly monitored for non-monetary benefits.

Benefit limits from 2025

Health benefits: limit up to the average wage (CZK 46,557 for 2025).

• Includes the purchase of goods or services of a medical, therapeutic, hygienic, or similar nature from healthcare facilities of medical devices based on a doctor prescription (e.g. medicines, prescription glasses, vaccinations, psychological consultations, membership in a private health clinic).
• The exemption applies only if the provider of the health services or goods is registered in the National Register of Health Service Providers.

Other non-monetary benefits: limit up to half of the average wage (CZK 23,278 for 2025).

• Includes benefits such as contributions to publicly accessible cultural and sporting events, use of sports facilities, recreational stays, tours, pre-school childcare facilities, books etc.

The amount of non-monetary benefits provided above this limit is subject to taxation and social security and health insurance contributions on the employee’s side. On the employer’s side, on the other hand, the excess amount of a non-monetary benefit may be considered a tax-deductible expense if the employee’s entitlement to the benefit is regulated in an internal regulation or employment contract. We have informed you about this issue in more detail in our eBook Employee benefits and taxation in the Czech Republic.

Impact of tax exemption on health benefits in the Czech Republic on employers and employees

The introduction of a separate cap on health benefits will allow employers to provide more health benefits, which are increasingly important to many employees. However, employers will have to keep records of the use of two different limits for each employee, which will lead to a higher administrative burden. For tax deductibility, an employee’s entitlement for benefits must be based on internal regulations or another document of the employer.

Example 1:

The employer provides its employees with:

• Participation in the Multisport program (monthly CZK 1,000, annually CZK 12,000).
• Membership in a private health clinic registered in the National Register of Health Service Providers (monthly CZK 3,500, annually CZK 42,000).

Total amount:

• Multisport: CZK 12,000 (up to a limit of CZK 23,278, exempt).
• Private clinic: 42,000 CZK (up to the limit of 46,557 CZK, exempt).

All amounts are exempt from tax and insurance premiums on the employee’s side. On the employer’s side, these amounts are not tax deductible.

Example 2a:

In addition to the above benefits, the employer will add vouchers for a recreational stay in the mountains worth CZK 18,000.

Total amount:

• Multisport + recreational stay: 30.000 CZK.
  • The limit of CZK 23,278 is exceeded by CZK 6,722, which is subject to tax and insurance on the employee’s side.
  • On the employer’s side, the amount of CZK 23,278 is not tax deductible, and the amount of CZK 6,722 is tax deductible (internal regulations).

The effects of membership of the private clinic remain as above.

Example 2b:

In addition to the above benefits, the employer will add vouchers for massages in a health facility worth CZK 8,000.

Total amount:

• Private clinic + massages: 50.000 CZK.
  • The limit of CZK 46,557 is exceeded by CZK 3,443, which is subject to tax and insurance on the employee’s side.
  • On the employer’s side, the amount of CZK 46,557 is not tax deductible, and the amount of CZK 3,443 is tax deductible (internal regulations).

The effects of participation in the Multisport programme remain the same as above.

Lan Anh Mai

Senior Tax Consultant | Accace Czech Republic

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Kateřina Hrůzová

Tax Director | Accace Czech Republic

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