Czech DPP Changes in 2026: New Thresholds and Mandatory Reporting

4.4.2026 | ARROWS law firm

The new year has brought employers a number of important changes regarding agreements to perform work (DPP). The thresholds for insurance contributions under the notified agreement regime have been adjusted, and the employee reporting system has been tightened. If you use DPPs for temporary workers or seasonal staff, you need to know what applies in 2026 in the Czech Republic. Incorrect setup may result in fines and errors in contributions.

The photo shows a lawyer during a consultation regarding amendments to agreements to perform work.

Changes to contribution thresholds (the “notified agreement” regime)
Health insurance and its link to the new thresholds
Mandatory electronic reporting of DPP (VPDPP)
Withholding tax in 2026
Holiday entitlement and scheduling working hours
Minimum wage and hourly rate in 2026

Key takeaways

New threshold system: For a “notified agreement” with one employer, a higher threshold applies for contributions (approx. CZK 12,000); for other employers, the threshold is significantly lower.
Mandatory reporting: Each month, an electronic report must be filed for all temporary workers, including those who earned nothing or did not exceed the threshold.
Withholding tax: It continues to apply to income up to the threshold if the employee has not signed the taxpayer’s declaration.
Holiday and schedule: DPP temporary workers are legally entitled to holiday, and the employer must (notionally or in practice) schedule their working hours.

Changes to contribution thresholds (the “notified agreement” regime)

The most significant change in recent years, which is fully effective in 2026 as well, is the introduction of the so-called notified agreement regime. It divides DPP into two categories with different thresholds for social security and health insurance contributions.

1. Notified agreement (priority): An employee may designate one employer for whom the higher contribution threshold will apply. This threshold is set at 25% of the average wage (rounded down to the nearest CZK 500) and for 2026 amounts to CZK 12,000.

2. Other (non-notified) agreements: For all other employers, a much lower threshold applies for participation in insurance, namely the threshold for small-scale employment (in 2026 it is CZK 4,500).

If an employee earns CZK 11,900 per month with you as their main, notified employer, you do not have to pay social security or health insurance contributions. However, if the same employee also works elsewhere under another DPP outside the notified agreement regime and earns CZK 5,000 there, the second employer must already pay contributions. In practice, it pays to have DPP arrangements and internal processes for verifying thresholds set up correctly, which typically also ties into the employment law agenda.

The system requires the employer to verify with and reserve at the Czech Social Security Administration (ČSSZ) whether it is the “notified” employer. Whoever comes first and notifies the intention to apply this regime gains the advantage of the higher threshold.

Health insurance and its link to the new thresholds

The rules for health insurance under DPP mirror the social security thresholds set out above. A person working under a DPP is considered an employee for health insurance purposes at the moment their income gives rise to participation in sickness insurance.

This means:

For a notified agreement (threshold approx. CZK 12,000): If the income does not reach the threshold, health insurance is not deducted from the remuneration. The employee must arrange insurance themselves as a person without taxable income (OBZP), or they are insured by the state.
For a non-notified agreement (threshold CZK 4,500): If the income reaches at least CZK 4,500, the employer pays 9% and the employee 4.5% towards health insurance.

Watch out for the obligation to pay the minimum insurance premium if the employee has no other income from which at least the minimum would be paid. This is based on the current minimum wage.

Mandatory electronic reporting of DPP (VPDPP)

A key administrative obligation is the monthly reporting of all DPPs. This is not the abolition of forms, but a new, strict reporting obligation towards the Czech Social Security Administration (ČSSZ). Employers must submit electronically each month the “Statement of income accounted for by the employer for employees working under an agreement to perform work” (VPDPP).

This statement is filed:

For all employees on a DPP (including those who had no income in the given month but the agreement is still in force, and including those not insured).
Always by the 20th day of the following month.
Exclusively electronically (ČSSZ e-Submission or payroll software).

Failure to comply with this obligation or late filing is subject to a fine of up to CZK 50,000 for each unsubmitted report or incorrect data. If, in addition to DPP, you also use external contractors, it may be useful to compare how relationships are set up and the risks of additional assessments in the article External contractors versus employees: How to properly set contractual relationships and eliminate tax risks of disguised employment.

Employee registration

The start of a new employee on a DPP who is not insured is reported via this monthly statement upon the first reporting of income. If participation in insurance arises due to exceeding the threshold, it is necessary to file the standard “Notice of commencement of employment” within 8 days. If an inspection or dispute with the authority is triggered due to incorrect registration or late reporting, it is usually appropriate to address the procedure and evidentiary position within commercial and litigation disputes.

Withholding tax in 2026

In 2026, it is still possible to use withholding tax at a rate of 15%. It applies to income from a DPP that does not exceed the threshold for participation in sickness insurance, and where the employee has not signed the taxpayer’s declaration with the employer.

In such a case, the employer withholds 15% and the temporary worker’s tax liability is thereby settled. For practice, it is also useful to be clear on how to proceed when terminating short-term employment relationships; see How to terminate employment during the probationary period without the risk of a court dispute. If the temporary worker signs the Taxpayer’s Declaration, advance tax and tax credits apply. Information about the complete abolition of withholding tax from 2027 is not part of the currently effective legislation.

Entitlement to leave and scheduling working hours

From 2024, “agreement workers” are also legally entitled to paid leave under Czech legislation. The condition is that the agreement lasts continuously for at least 28 days in the calendar year and the employee works at least 80 hours. For leave purposes, a notional working time of 20 hours per week is also taken into account.

The employer is also obliged to schedule working hours in writing at least 3 days in advance, unless agreed otherwise with the employee. This is key for calculating leave entitlement and for any inspections by the State Labour Inspection Office.

Watch out for the 300-hour limit

For DPP, the strict limit of max. 300 hours per year for one employer still applies, as set out in Act No. 262/2006 Coll., the Labour Code. This limit cannot be exceeded. If you need a temporary worker for a larger scope of work, you must use an Agreement to Perform Work (DPČ) or an employment contract.

Minimum wage and hourly rate in 2026

In 2026, the minimum wage was increased again based on the indexation mechanism. The minimum wage is CZK 22,400 per month. This corresponds to a minimum hourly rate of approx. CZK 134.40 with standard working hours of 40 hours per week.

This also applies to DPP, as remuneration under the agreement may not be lower than the minimum wage. If you agree remuneration below the statutory minimum, you are breaching the law and risk a high fine and/or an obligation to pay the difference.

Key risks and how ARROWS helps

Potential issues	How ARROWS helps (office@arws.cz)
Incorrect determination of the insurance threshold: Confusing the threshold for a “notified agreement” and “other agreements” leads to additional insurance assessments and penalties.	Our attorneys in Prague will review the setup of your payroll system and assist with registration under the notified agreement regime.
Incorrect VPDPP reporting: Failure to report a temporary worker with no income or late submission of the report.	We will set up processes for data collection and timely submission of reports, and, if needed, represent you in administrative proceedings regarding a fine.
Working hours and leave: Lack of a working-hours schedule and incorrect calculation of leave entitlement for agreement workers.	We will prepare template schedules and internal policies for calculating and taking leave under DPP, so everything complies with the Labour Code.
Exceeding the 300-hour limit: Work beyond the statutory DPP limit (often disguised) is considered illegal work/disguised employment.	ARROWS will conduct an audit of your contracts and propose switching to DPČ or an employment contract where necessary.
Labour inspectorate inspections: Risk of high fines for illegal employment or breaches of wage regulations.	Our attorneys in Prague will represent you during inspections and ensure the defence of your procedures.

Conclusion

In 2026, employers are required to keep precise records. The notified agreement system offers an opportunity to save on contributions, but it requires fast administration and communication with the Czech Social Security Administration (ČSSZ). At the same time, it is necessary to monitor the mandatory monthly VPDPP reporting under the threat of fines.

Most importantly, do not neglect administration, because missing work schedules, unpaid leave, or an unreported agreement are easy targets for inspection authorities.

ARROWS attorneys have long been dealing with employment law and payroll compliance. We will help you set internal policies, review employment documentation, and ensure that your procedures comply with the legislation in force in 2026. If you need certainty in the legal setup for your temporary workers, email us at office@arws.cz.

FAQ - DPP 2026 and what to watch out for

1. Is there a difference between DPP and DPČ? Which one should I use?
Yes—fundamentally. DPP (Agreement to Perform Work) is limited to 300 hours per year with one employer and is suitable for occasional temporary work. DPČ (Agreement on Work Activity) allows work averaging 20 hours per week, but insurance contributions are payable already from income of CZK 4,000 per month.

2. What if a temporary worker exceeds 300 hours under a DPP?
By law, an Agreement to Perform Work ends upon exhausting the limit or the agreed period. Continuing to work beyond 300 hours per year for the same employer under a DPP is not possible and you must enter into a DPČ or an employment contract. Circumventing this limit constitutes illegal work, with fines of up to CZK 10 million.

3. How is leave calculated under a DPP?
For leave calculation, a notional weekly working time of 20 hours is used. Entitlement arises after working 80 hours in the year, provided the agreement lasts at least 28 days. The calculation formula is: (Number of full worked multiples of 20 hours / 52) × 20 × leave entitlement in weeks.

4. Do I have to report all temporary workers to the Czech Social Security Administration (ČSSZ), even if they earn only CZK 1,000?
Yes. The obligation to submit the monthly VPDPP report applies to all DPPs, regardless of earnings. Even in the case of income of CZK 0 (if the agreement continues), the temporary worker must be included in the report.

5. How does the “Notified Agreement Regime” work in practice?
The employer must actively register with the Czech Social Security Administration (ČSSZ) the intention to apply this regime to a specific employee. If they do so first, the threshold of 25% of the average wage applies (approx. CZK 12,000). Other employers of the same temporary worker pay insurance contributions already from the threshold for small-scale employment (CZK 4,500).

6. Was the CZK 12,000 threshold increased only for insurance contributions, or also for taxes?
This threshold relates to the point at which insurance contributions become payable. For income tax purposes, it is decisive whether the employee has signed the Taxpayer’s Declaration. If they have not signed it and the income is up to the insurance participation threshold, a 15% withholding tax applies.

Notice: The information contained in this article is of a general informational nature only and is intended to provide basic guidance on the topic based on the legal framework as of 2026. Although we take the utmost care to ensure accuracy, legislation and its interpretation evolve over time. We are ARROWS advokátní kancelář, an entity registered with the Czech Bar Association (our supervisory authority), and for maximum client protection we maintain professional liability insurance with a limit of CZK 400,000,000. To verify the current wording of the relevant regulations and their application to your specific situation, it is necessary to contact ARROWS advokátní kancelář directly (office@arws.cz). We accept no liability for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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