The average salary in the private sector in the Czech Republic is now 1,779 euros (CZK 43,967), according to the annual CEE Tax Guide by the consulting company Forvis Mazars, which compares tax trends in 25 European and Central Asian countries. Czech wages showed the lowest year-on-year growth (6%) of the Visegrad 4 countries, and are thus no longer the highest, falling behind Poland, where the average wage rose to 1,795 euros (CZK 44,354).
The highest average wage of the 25 European and Central Asian countries included in the study is still in Austria, where the wage has risen to 4,753 euros per month (CZK 117,447 CZK). Austria has thus further increased its lead over Germany, where the average wage is stagnant at 4,105 euros (CZK 101,435). The lowest average salary of 400 euros (CZK 9,884) is in Kosovo and Uzbekistan, followed by Kyrgyzstan (464 euros; CZK 11,465) and Ukraine (525 euros; CZK 12,973).
While last year’s study showed an increase of around 1% in the average wage of most states, this year has seen double-digit growth in many countries. Within the Visegrad Four countries, the highest was Poland (25%), followed by Hungary (11%), Slovakia (7%), and the lowest in the Czech Republic (6%). In Germany, where the average wage fell last year by 2%, there was growth of 1% this year.
The study also found that the level of personal income taxes among the 25 states surveyed did not change compared to last year, with some exceptions. “The most significant change occurred in the personal income tax in Croatia, which switched to more progressive taxation and more significantly adjusted the amount and dispersion of rates. Partial adjustment was also made by Albania, which adopted a 15% rate,” said Pavel Klein, managing partner of the tax department of Forvis Mazars in the Czech Republic.
Tax rates still vary widely from country to country. A minority of states apply a flat tax on personal income, ranging from 10 to 20%. These include Bulgaria (10%), Hungary (15%), Romania (10%) and Ukraine (18%). Other countries use some form of progressive taxation, either multiple rates (e.g. 0, 13, 15, 23% in Albania), or ranges, such as 0 to 55% in Austria or 16 to 50% in Slovenia. Slovakia also uses progressive taxation, with a spread of rates from 15 to 25%.
In the Czech Republic, personal income tax is applied at progressive rates of 15 and 23% on all types of income, including employment, self-employment, rental income or capital gains.
The Forvis Mazars study also compared mandatory employer contributions. “On average, the ratio of the employer’s costs to gross wages for mandatory contributions has increased from last year’s 15 to 16%,” said Klein. Here too, however, there are significant differences between countries. While in Romania taxes amount to 2.25%, and in Lithuania just 1.77% of the gross salary, in Slovakia this figure has been increased from 35.2 to 36.2%. In the Czech Republic, employer contributions remain at 24.8% for annual incomes up to 86,140 euros (valid for 2024).
