Czech Government to Halt Social Security Contribution Hikes for Self-Employed in 2026
The Czech Republic’s new governing coalition, comprising the ANO, SPD, and Motorists parties, has introduced legislation to freeze the growth of minimum social security contributions for self-employed professionals (OSVČ) starting in 2026. The move marks a significant policy shift away from previous efforts to increase state pension funding through higher mandatory payments from sole traders.
Under the proposed amendment, the minimum advance for those in their primary business activity will no longer increase to the previously planned 40% of the average wage. Instead, the new administration intends to cap these contributions at 35% of the average wage, maintaining the levels seen in 2025. According to Alena Schillerová, one of the proposal’s proponents, this adjustment could save self-employed individuals up to 8,580 CZK annually in 2026.
This policy reversal targets a “consolidation package” previously implemented by the government of Petr Fiala. That administration had sought to bolster the financial stability of the pension system and prevent self-employed workers from facing poverty in old age by gradually raising the minimum assessment base. Specifically, the Fiala government had increased the minimum annual assessment base from 50% to 55% of the tax base and phased in a rise in minimum advances from 25% to 40% of the average wage.
The decision to halt these increases highlights the ongoing tension between providing immediate liquidity to business owners and ensuring long-term social security solvency. While the new coalition views entrepreneurs as the “backbone of the economy,” critics warn of the long-term systemic risks.
Outgoing Minister of Labour and Social Affairs Marian Jurečka has voiced strong opposition to the plan, warning that it will create a generation of “pensioners with problems.” Jurečka argues that lower contributions today will inevitably lead to lower pension payouts in the future.
The financial implications are already being felt in legislative discussions. Reports indicate a proposed reduction in minimum advances from 5,720 CZK to 5,005 CZK. If the amendment is signed by the Senate and approved by the President, self-employed individuals will pay these lower rates from the date of effectiveness, with any overpayments on social insurance to be refunded at the end of the year, as stated by Minister Alena Schillerová.
Market observers note that these changes may put additional pressure on the state budget. Because pensions are funded through social security contributions, a decrease in revenue from the self-employed may force the state to rely more heavily on other tax revenues to cover pension obligations, potentially impacting the overall distribution of funds available for seniors.
Additional changes previously implemented under the consolidation package, such as the increased monthly assessment bases for those in the flat-rate regime—which rose to 28,050 CZK for the second band and 42,900 CZK for the third band—remain part of the existing fiscal landscape. Minimum advances for health insurance are expected to continue rising in line with the average wage, as the current proposal specifically targets retirement insurance contributions.
