Agreements to complete a job in 2026

How Agreements on Performance of Work (DPP) Changed in 2026: Key Updates and Their Practical Impacts

The most fundamental change is the cancellation of the originally planned aggregation of agreements. The previous complex proposal with two limits for single and multiple employers was repealed before it could take effect. In 2026, a much simpler system applies: the limit for participation in insurance is tied to 25% of the average wage.

For 2026, this limit is set at CZK 12,000. If your income from a single DPP with one employer does not exceed CZK 11,999 in a calendar month, this agreement is not subject to social security and health insurance contributions.

The limits are assessed separately for each employer, and income from agreements with different companies is not aggregated. This means an employee can have an income below CZK 12,000 with one employer and another income below CZK 12,000 with another, without having to pay insurance contributions from either of these agreements. 

However, as soon as the CZK 12,000 threshold is reached with one of them, an obligation arises to pay both social and health insurance on the entire income from that specific employer.

The increase of the DPP limit from CZK 11,500 to CZK 12,000 means that an employer can save on contributions from a higher volume of remuneration per worker per month than last year. The limit is tied to 25% of the average wage, so it will automatically adjust each year.

Agreement on Work Activity (DPČ) – Limit Increase

While a higher limit applies to DPPs, the threshold for insurance participation for Agreements on Work Activity (DPČ) is set significantly lower and is tied to 10% of the average wage. For 2026, this limit is CZK 4,500 per month. It is crucial to distinguish between these two, as many companies use DPP and DPČ interchangeably, but their limits and rules differ fundamentally. If you are unsure about the correct setup of your agreements and related obligations towards employees, a consultation with our labour law team can help.

For a DPČ with income below this limit, the term "small-scale employment" is used. This is a situation where the agreed monthly remuneration does not reach the decisive income level, and the employee is therefore not a participant in sickness insurance. However, be aware that the actual income accounted for in a given month is what matters—if it exceeds the threshold in any month, insurance participation arises for that specific month.

For a DPČ, insurance contributions are due from a monthly income of CZK 4,500. If an entrepreneur classifies an employee under a DPČ when they should have been on a DPP (or vice versa), and the income level is around the debatable point, the Financial Administration may demand back-payment of insurance and potentially taxes for a longer period during an inspection. In such a case, there is also a risk of a fine for failure to meet reporting obligations. We also address the risks of external collaboration being reclassified as dependent work during an inspection (along with back-payments and penalties) in the article External Contractors vs. Employees: How to Correctly Set Up Contractual Relationships and Eliminate the Tax Risks of Disguised Employment.

Uniform Monthly Employer Report: A New Reporting System from 2026

Previously used forms (like the DPP Statement) were last submitted for December 2025. As of 1 January 2026, the Act on the Uniform Monthly Employer Report (JMHZ) came into force, introducing a completely new centralized system. This system is mandatory not only for people on DPP and DPČ but for all employers and all types of employment contracts. Live reporting operations started on 1 April 2026.

The JMHZ replaces dozens of old forms with a single comprehensive electronic submission via the ČSSZ ePortal. Employers send data to only one place, and the authorities then automatically share it among themselves. This gives the ČSSZ, the Ministry of Labour and Social Affairs, the Financial Administration, the Labour Office, and the statistical office access to the information. The goal is to massively increase the efficiency of inspections. Our tax advisory team can also help with setting up internal processes and preparing documents for potential audits by the authorities.

All income must now be reported in detail in the system, including from agreements that did not reach the limit for insurance contributions. This gives the state a complete overview of everyone working outside of a traditional employment relationship. Paper forms have been definitively abolished; everything operates exclusively electronically. Authorities can now see data in real time that was previously only on a payslip.

The first standard monthly report in the live system is submitted for the month of April 2026, with a deadline of 20 May 2026. Data for January to March 2026 are to be backfilled into the system during the spring months. For all subsequent calendar months, a strict and unchangeable rule applies: data must always be sent by the 20th day of the following month at the latest.

Risks and Fines for Non-Compliance

The fine for failing to submit the JMHZ or for submitting it with errors is up to CZK 50,000 for each individual violation. The practical impacts of the changes to agreements and the related administration are also summarized in our update DPP 2026: News, Changes, Limits. This means that if you have three temporary workers and accidentally omit one of them from the report, you face a harsh penalty. The same CZK 50,000 fine awaits you if you forget to send the monthly report to the authorities altogether.

The 300-Hour Limit and Restrictions on DPPs – What Isn't Changing, but Is Often Violated

One of the most common problems that lawyers from ARROWS encounter when defending entrepreneurs against the Labour Inspectorate is exceeding the 300-hour limit. This limit for Agreements on Performance of Work (DPP) is absolutely fixed by law, but many companies unfortunately interpret it very creatively.

The Labour Code is clear: a maximum of 300 hours can be worked on a DPP per calendar year for a single employer. Only hours actually worked are counted towards the limit. Periods of obstacles to work or taken holiday, which "agreement workers" are now entitled to, are not included in these 300 hours.

Imagine a temporary worker who works eight hours a day in the summer. The limit will be exhausted after about 37 days. If they continue to work on the same (or a newly written) DPP, it is a violation of the law. They can legally continue only by switching to an Agreement on Work Activity (DPČ) or a standard employment contract.

If an employee continues to work without a proper contractual basis, the authorities classify it as illegal employment (so-called undeclared work). For this serious violation of labour law, companies face a crippling fine of up to CZK 10 million from the Labour Inspectorate.

A common mistake is trying to "circumvent" the limit. Companies think that by drawing up another DPP for a different position in the same year, the hours reset, or that the limit is calculated separately for each branch. This is not true – the hours from all DPPs in a given year are aggregated under one company ID number (IČO) of the employer.

Holiday for Agreement Workers in 2026: When It Arises and How It's Calculated

Since 2024, "agreement workers" have been entitled to paid holiday if they meet certain conditions. The rules do not change in 2026, but errors in their application are among the most common findings of the Labour Inspectorate. The entitlement arises only when two conditions are met simultaneously with one employer in a calendar year:

• the agreement (both DPP and DPČ) lasts for at least 4 continuous weeks, i.e., 28 calendar days,

• the employee works at least 80 hours.

Meeting only one of them is not enough. A temporary worker who works 120 hours in three weeks is not entitled. Likewise, a student with a six-month agreement and 70 hours worked is not entitled.

For the calculation itself, a fictional weekly working time of 20 hours is always used for agreements, regardless of the actual scope of work. The hours worked are divided by twenty (only whole weeks are counted), the result is substituted into the statutory formula, and it is always rounded up to the nearest whole hour according to Section 216(5) of the Labour Code. Rounding down is the most common mistake made by payroll departments—the employee then receives less than they are entitled to, and the company faces back-payment and a penalty. A detailed procedure including examples can be found in the article on how to calculate holiday for DPP and DPČ step by step.

A crucial difference between DPP and DPČ: for an Agreement on Performance of Work, the time taken for holiday does not count towards the annual 300-hour limit—so the employee can work a full 300 hours and be paid for holiday on top of that. For an Agreement on Work Activity, on the other hand, holiday taken does count towards the hours worked, which is a hidden trap for employers who are on the edge of the average 20 hours per week for a DPČ. We discuss the specifics of DPČ in a separate article on holiday entitlement for an Agreement on Work Activity.

You must pay the employee for any unused holiday at their average earnings when the agreement ends. This obligation is most often forgotten in practice for short-term seasonal agreements.

Tax Deductions for DPPs: Withholding Tax and Its Gradual Demise

In 2026, withholding tax (15%) will apply if the employee has not signed the "pink form" (taxpayer's declaration) and their income has not exceeded the limit for contributions, which is now CZK 12,000 per month. In such a case, the employer deducts the tax directly. The employee does not need to report this income anywhere or deal with it in their tax return.

Imagine an employee without a signed declaration earns CZK 11,000. A 15% withholding tax (CZK 1,650) will be applied, and the net income will be CZK 9,350. No insurance is paid, but the employee unnecessarily loses money. Without the declaration, they cannot claim the taxpayer tax credit, which would reduce or zero out the tax.

If the same employee had signed the tax declaration, advance tax would automatically be applied. Thanks to the basic taxpayer tax credit (CZK 2,570 per month), the tax on an income of CZK 11,000 would be exactly CZK 0. The employee would thus receive a net remuneration of CZK 11,000 in their account without any deductions.

From 2027: The End of Withholding Tax, the Rise of Advance Tax

From 1 January 2027, withholding tax on DPPs will be completely abolished. It will be replaced exclusively by advance tax, which the employee may have to account for themselves in their tax return. The entire regime for agreements will thus become even more legislatively and administratively similar to standard employment.

In practice, this means one thing: you should already be actively discussing the signing of the "pink form" with your "agreement workers" today. If you get them used to it in 2026, you will elegantly prepare the entire company for the new system without unnecessary chaos. If you underestimate this, employees will be confused, and the risk of errors in the payroll department will increase.

Seasonal Workers in Agriculture – New Rules and Benefits

Completely new rules for seasonal workers in agriculture, specifically in fruit and vegetable growing, come into effect on 1 January 2026. This special legislative measure is aimed at supporting a sector that is extremely demanding in terms of manual labour and has a highly seasonal nature.

New 1280-Hour Limit and Conditions

Agricultural workers can now conclude a special DPP with a limit of up to 1280 hours per calendar year, which replaces the standard 300-hour limit. This exception applies exclusively to precisely defined work (harvesting, crop care, sorting, or packing) performed in the period from 1 April to 30 November.

A fundamental legal condition is that this agreement may only be concluded by an authorized agricultural entrepreneur. Furthermore, this entrepreneur must meet the strict requirement of having been a demonstrable recipient of state aid tied to the production of selected types of fruit and vegetables in the previous calendar year.

Discount on Social Insurance – 7.1 percent

If the employee's monthly income from this special DPP does not exceed the average wage (firmly set at CZK 48,967 for 2026), they are entitled to a discount. Their social insurance contribution is then reduced by exactly 7.1% of the assessment base.

In 2026, an employee normally pays 7.1% for social (including sickness) insurance. Thanks to this discount, their contribution is completely zeroed out, which effectively increases their net wage. The employer, however, continues to pay their standard portion of the insurance contribution at a rate of 24.8%.

How It's Reported in the JMHZ

The administration associated with the discount is handled exclusively electronically within the Uniform Monthly Employer Report (JMHZ), which has been in live operation since 2026. The information about the discount must be reported in the regular monthly report filed by the 20th day of the following month.

The rules for claiming the discount are extremely strict on the part of the state. If the employer sets the DPP parameters incorrectly, arranges work outside the designated period, or makes a mistake in the report, the entitlement to the discount is forfeited. The law does not allow for subsequent corrections in these cases.

Responsibility and Risks for Entrepreneurs: What You Cannot Afford

Illegal employment is not just an abstract legal category – in 2026, it has become a concrete and measurable threat for entrepreneurs. The state and inspectorates are focusing on this problem much more intensively than in previous years.

According to the Employment Act, illegal work is defined as dependent work performed by a natural person outside of an employment relationship. It also includes work performed by a foreigner without a valid permit or the unauthorized mediation of employment.

If an employee works without a written DPP, DPČ, or employment contract, it is unequivocally illegal work. The same applies if they exceed the 300-hour limit on a DPP, lack a permit (for foreigners), or you hire them through an unregistered employment agency.

The fine for a company or a self-employed person (OSVČ) for enabling illegal work is up to CZK 10 million, with a minimum of CZK 50,000. An employee who performs work illegally can be fined up to CZK 100,000.

In 2026, inspectors are sharply targeting unwritten DPPs, discrepancies between recorded working hours and reality, or the hidden chaining of agreements. The victims of these inspections are not just "exotic" companies, but ordinary small and medium-sized enterprises that have underestimated the administration.

Financial Penalties for Errors in Contributions

If an employer fails to correctly pay insurance contributions (health or social), the Financial Administration and the ČSSZ will subsequently assess the amount due. A hefty penalty and default interest calculated for each day of delay from the due date are imposed.

Imagine an employee on a DPP with an income of CZK 12,500. You mistakenly believe they are under the limit and do not pay the insurance. A year later, the authorities notice and assess the owed insurance for the entire 12 months.

From an income of CZK 12,500, the monthly contributions are:

• Social insurance: employee 7.1% (CZK 887.50), employer 24.8% (CZK 3,100)

• Health insurance: employee 4.5% (CZK 562.50), employer 9% (CZK 1,125)

In total, this amounts to CZK 5,675 for one month. Multiplied by 12 months, the underpayment is exactly CZK 68,100. To this is added a substantial penalty and default interest, so the amount can easily climb to dangerous heights even for a single person.

Fines for Not Reporting a DPP or for Incorrect Reporting

The fine for failing to report (or for submitting with errors) through the JMHZ system is up to CZK 50,000 for each individual violation. You must therefore proceed with maximum caution in this regard.

If you have four employees on a DPP and forget to report one of them in a given month, you risk a fine of CZK 50,000. If you miss the monthly report entirely, it's another CZK 50,000. The authorities do not forgive errors in this system and penalize them immediately.

Reporting an Employee and Their Changes: What You Must Do in 2026

Previously, reporting a DPP was a simple matter – you submitted the Income Statement by the 20th of the following month and you were done. However, this old statement was discontinued at the beginning of 2026. Since April 2026, reporting has become significantly more complex with the launch of the Uniform Monthly Employer Report (JMHZ).

Onboarding an Employee on a DPP – How and When to Report

When you hire an employee on a DPP or DPČ, you must now report them through the "Employee Registration – Start of Employment" process directly via the JMHZ system. This gives the state an immediate central overview of all "agreement workers" in companies.

Until the end of June 2026, there is a deadline for Czech citizens where you must register the employee within 8 days of their actual start of work. However, from 1 July 2026, the rules become drastically stricter, and completely new deadlines will apply.

From July 2026, you must register a Czech employee even before they actually start performing work. A two-step pre-registration can be used (you report basic data in advance and supplement the rest within 8 days). For foreigners, the obligation to register before starting work has been in effect since April 2026.

If an employee starts performing work and you do not report them within these strict deadlines, it is considered an immediate violation of the law from the authorities' perspective. The Czech Social Security Administration (ČSSZ) can very easily trace this delay and impose a fine.

Termination of Employment – Also Newly Reported

Just like the start, the termination of an employment relationship must also be reported from spring 2026 via the module in the JMHZ system. If a temporary worker on a DPP or DPČ leaves your company, you have a strict obligation to notify the authorities of this fact.

The statutory deadline for reporting the termination of employment is uncompromisingly set at 8 calendar days from the day of the actual end of work performance. This rule applies to both Czech and foreign employees without distinction.

If an employee leaves and you do not report it to the authorities, the ČSSZ will continue to register them as your active worker. If this person later, for example, starts a business, they will technically still be your employee. This can lead to inspections and tax confusion that will harm you.

The Minimum Wage and Its Impact on DPPs in 2026

The minimum wage in the Czech Republic has been set at CZK 22,400 per month since January 2026. For a standard 40-hour work week, this corresponds to a minimum hourly rate of exactly CZK 134.40. Remuneration is now governed by a new automatic valorization mechanism.

The Labour Code clearly states that remuneration from a DPP must not be lower than the currently valid minimum hourly wage. If you agree on a lower rate with a temporary worker (for example, only CZK 100 or CZK 120 per hour), it is a clear violation of the law.

If the employee subsequently complains to the Labour Inspectorate, the employer must immediately pay the difference. If the employee decides to resolve the matter in court, the company also faces a hefty fine.

Many small businesses still maintain an informal "agreement" with temporary workers on hourly rates lower than the legal minimum. In 2026, however, this approach becomes extremely dangerous, as inspections are targeting precisely these cases.

If you have a temporary worker who works for you below the CZK 134.40 per hour threshold, you should rectify the situation immediately. You must either officially increase their hourly rate or agree with them to terminate your cooperation.

Practical Tips and Strategies for Entrepreneurs

Audit Your Existing DPPs

There are many changes in legislation for 2026. You should therefore go through all the DPPs you currently have in force in detail. Carefully check the following:

• Are all DPPs concluded strictly in writing?

• Does the agreed rate correspond to the current minimum wage of CZK 134.40/hour?

• Are you aware of the new limits for insurance (CZK 12,000 for DPP and CZK 4,500 for DPČ)?

• Do you know exactly how many hours your agreement workers have worked for you this year?

• Are you really reporting all employees to the JMHZ system? 

If you are unsure, contact the lawyers at ARROWS. We will audit your processes and rectify any shortcomings before an inspection knocks on your door.

Clear and Correct Documents

Every DPP should mandatorily contain clearly defined contracting parties. Furthermore, a detailed job description and the rate per hour or a fixed monthly amount. The monthly remuneration must always be easily convertible to hours. This will prevent suspicion that you are paying below the minimum wage.

Don't forget a clear annual limit (e.g., "max. 300 hours in 2026"). The contract must contain the date of signature and exist in two copies. There are many templates on the internet, but they are often incomplete or outdated. Have your documents prepared by professionals from ARROWS; it will save you money.

Choosing the Right Form: DPP vs. DPČ vs. Employment Contract

Not all forms of employment are suitable for every situation. Always consider:

• DPP: 300-hour annual limit, insurance participation from CZK 12,000. Ideal for occasional help (moving, festivals, seasonal work).

• DPČ: Work averaging max. 20 hours per week, insurance from CZK 4,500. Suitable for regular part-time work (receptionist, service staff).

• Employment contract: Suitable for stable and long-term activity on a full or part-time basis (sales manager, head technician). 

If you are uncertain about the choice, ask the lawyers at ARROWS. We will propose the most advantageous solution tailored to your operations.

The decision between an agreement and an employment contract affects not only contributions but also termination conditions, holiday entitlement, and the scope of obligations towards the employee. A detailed comparison of all three forms, including practical impacts, can be found in the article when to choose a DPP and when an employment contract is better.

Using JMHZ Without Errors

If you handle JMHZ reporting in-house, we recommend caution. Create a clear checklist of mandatory data for each employee. Keep an eye on the strict deadlines. You now report a new start before work begins, and termination within 8 days. The monthly income report is then sent by the 20th.

Keep confirmation of submission and check the data before sending. If you don't have the capacity for this, it's better to entrust it to professionals or accountants.

Proven Minimum Habits for Small Businesses

• Monthly check: Regularly review the working time records of all "agreement workers." This way, you ensure you don't exceed the CZK 12,000 limit for anyone.

• Annual review: At the end of the year, sum up the hours worked by individual workers. This gives you certainty that you are not exceeding the 300 hours per DPP for anyone.

• Record of contributions: Always carefully archive what you have paid in insurance. It will serve as irrefutable proof during a potential inspection from the authorities.

Representation and Defense Against Inspections: How the ARROWS Law Firm Can Help

The lawyers at the ARROWS law firm have long-standing experience with the agenda surrounding Agreements on Performance of Work. If you suspect an error or have already been contacted by the Labour Inspectorate or the ČSSZ, we are ready to help you immediately:

• Expert legal advice: We will analyze your situation, verify the data registered with the authorities, and precisely determine what risks and potential sanctions you face.

• Representation before authorities: During both announced and unannounced inspections from the Labour Inspectorate, ČSSZ, or the Financial Administration, we will take over communication and defend your interests.

• Defense against fines: If a sanction has already been imposed on you, we will file appeals, try to negotiate its reduction, or challenge it in administrative court.

• Legal reorganization: If we find errors in your company processes, we will set up a secure system and completely revise your contractual documentation.

Our lawyers also work preventively. If you want to be sure that your current remuneration model is bulletproof, just send us your current DPPs. We will conduct an audit and clearly tell you what is in order and where the risks lie.

Final Summary

The year 2026 brought a definitive legislative resolution in the area of agreements (DPP and DPČ). The originally intended complex system of two-tier limits was abolished and replaced by simpler rules with a single limit of CZK 12,000. These changes are not just a technical formality – they have a fundamental impact on your finances and sanction risks.

The key factor now is the absolute obligation to report all agreements (even uninsured ones) through the centralized JMHZ system. What you could previously get away with for agreement workers without paperwork or with a delay is no longer safe. The state has digitized the system, and data from all authorities are interconnected in real time.

The Labour Inspectorate, ČSSZ, and the Financial Administration now have a perfect overview of your temporary workers. If you use workers on agreements in your company, you should pay maximum attention to their correct legal and tax setup. If you are a bit lost in the new obligations, you are definitely not alone.

It is for this very reason that the experts from the ARROWS law firm are here for you. We have vast experience with cases of employing foreigners, illegal chaining of agreements, and defense against inspections by authorities. For the maximum security of our clients, we have professional liability insurance with a limit of CZK 400,000,000.

Our role is to ensure that your business is not threatened by unnecessary legal mistakes and hefty fines. If you would like an expert to assess your company's situation and contracts, contact us at konzultace@arws.cz. We will arrange a consultation, go through your processes, and uncover all hidden risks.