Waiver of social security and health insurance premiums for self-employed persons in 2021

At the beginning of May, two new bills were circulated to MPs and the outcome of the legislative process to approve both bills will be of particular interest to the self-employed.

This article was written in 2021. If you are looking for up-to-date information on this topic, please do not hesitate to contact us at office@arws.cz or by phone on +420 245 007 740. We will be happy to advise you.

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Author of the article: ARROWS (Ing. Jan Dyškant, office@arws.cz, +420 245 007 740)

The first bill (Parliamentary Document 1211) concerns adjustments in the area of public health insurance premiums in connection with the extraordinary epidemic measures in 2021 and the second bill (Parliamentary Document 1212) concerns adjustments in the area of social security premiums and contributions to state employment policy and pension insurance in connection with the extraordinary epidemic measures in 2021.

Similarly to what was already the case in 2020, these bills are intended to mitigate for self-employed persons the negative impact caused by a number of implemented containment measures against the spread of COVID-19 by making it mandatory for self-employed persons not to pay advance contributions at all (for social security) or to pay only the difference above the minimum advance (for health insurance) for a certain period in 2021. As was the case in 2020, it will only be possible to pay the difference thus determined in the form of a supplementary insurance payment, no later than 8 days after the date on which the self-employed person's income and expenditure statement for 2021 was or should have been submitted. However, the proposed wording of these laws raises the question of where the drafters of these laws are going, since the period in 2021 for which self-employed persons do not have to pay the aforementioned advance payments is set from January 2021 to June 2021.

Given the experience of the length of the approval process, it is more than likely that these laws will not come into force until after the specified period has elapsed and self-employed persons who are duly complying with their legal obligations will have duly paid their advance payments of insurance premiums for this period, and so they may not be helped by this relief, or they may be helped by the fact that these bills include in their provisions that if an advance premium has been paid for any calendar month of the specified period, it will be applied to the payment of liabilities due and then to advance premiums for the other calendar months of 2021.

Other Proposed Mitigations

• Pension insurance premiums and state employment insurance contributions determined on the 2021 assessment base are reduced for each calendar month of the defined period in which self-employment was carried on for at least part of the month by:
• CZK 2 588,- for the main self-employed activity
• CZK 1 036 for secondary self-employment.
• The advance payment of health insurance premiums that the self-employed person would have been obliged to pay in the defined period is deemed to have been paid up to the amount of the premium calculated on 1/12 of the minimum assessment base for 2021.