Flat-Rate Tax 2026: Conditions, Bands, and How to Register
Since 2021, the flat-rate tax has been one of the most popular tax innovations for Czech self-employed individuals (OSVČ). In 2026, it is used by over 125,000 OSVČ, and the number keeps growing year on year. This guide covers everything you need to know: the current advance payment amounts for all three bands, entry conditions, changes compared to 2025, important deadlines, and practical advice. All information is based on official sources from the Czech Financial Administration and the Czech Social Security Administration.
What Is the Flat-Rate Tax
The flat-rate tax is a simplified way for OSVČ to meet their tax and contributions obligations. Instead of filing a tax return at the end of the year, submitting reports to the ČSSZ and your health insurance provider, and calculating the exact amount of tax and insurance due, you pay one fixed monthly amount. This covers:
- Personal income tax
- Pension insurance contributions (social insurance including the contribution to state employment policy)
- Public health insurance contributions
The flat-rate scheme is governed by Act No. 586/1992 Coll., on Income Taxes, specifically in Sections 2a through 7a. The flat-rate tax system is administered by the Czech Financial Administration in cooperation with the ČSSZ and health insurance providers.
The main benefit: no year-end paperwork
OSVČ in the flat-rate scheme are not required to file:
- An income tax return
- A statement of income and expenses for the ČSSZ
- A statement of income and expenses for their health insurance provider (e.g. VZP)
This applies as long as you meet the conditions of the flat-rate scheme throughout the entire tax period (the full calendar year).
The Three Flat-Rate Tax Bands in 2026
Since 2023, the flat-rate tax has operated across three bands. Which band you fall into depends on your income from the previous year and the type of business activity you carry out (specifically, which percentage expense deduction applies to your activity).
Band 1 – Basic
Flat-rate tax 2026 – Band 1: monthly advance payment 9,984 CZK
| Component | Monthly amount | |-----------|----------------| | Income tax | 100 CZK | | Pension insurance | 6,578 CZK | | Health insurance | 3,306 CZK | | Total per month | 9,984 CZK | | Total per year | 119,808 CZK |
Change compared to 2025: The advance payment has increased from 8,716 CZK to 9,984 CZK (an increase of 1,268 CZK per month, or 15,216 CZK per year). The increase is driven by rising minimum advance payments for social and health insurance, which are linked to the average wage.
Who falls into Band 1:
You can enter the first band if your income from self-employment in the previous year:
- Did not exceed 1,000,000 CZK (regardless of the type of activity), or
- Did not exceed 1,500,000 CZK and at least 75% of it came from activities eligible for an expense deduction of 80% or 60%, or
- Did not exceed 2,000,000 CZK and at least 75% of it came from activities eligible for an expense deduction of 80%
Band 2 – Middle
Flat-rate tax 2026 – Band 2: monthly advance payment 16,745 CZK
| Component | Monthly amount | |-----------|----------------| | Income tax | 4,963 CZK | | Pension insurance | 8,191 CZK | | Health insurance | 3,591 CZK | | Total per month | 16,745 CZK | | Total per year | 200,940 CZK |
No change compared to 2025.
Who falls into Band 2:
You can enter the second band if your income in the previous year:
- Did not exceed 1,500,000 CZK (regardless of the type of activity), or
- Did not exceed 2,000,000 CZK and at least 75% of it came from activities eligible for an expense deduction of 80% or 60%
Band 3 – Highest
Flat-rate tax 2026 – Band 3: monthly advance payment 27,139 CZK
| Component | Monthly amount | |-----------|----------------| | Income tax | 9,320 CZK | | Pension insurance | 12,527 CZK | | Health insurance | 5,292 CZK | | Total per month | 27,139 CZK | | Total per year | 325,668 CZK |
No change compared to 2025.
Who falls into Band 3:
The third band is intended for OSVČ whose income in the previous year did not exceed 2,000,000 CZK — regardless of the type of activity. It acts as a "catch-all" band for anyone who does not meet the stricter conditions of the lower bands.
Overview of Bands at a Glance
📊Flat-rate tax bands overview 2026
Source: Czech Financial Administration – Information on the flat-rate tax 2025/2026
Conditions for Entering the Flat-Rate Scheme
To enter the flat-rate scheme, you must meet all of the following conditions simultaneously. If even one is not met, you cannot enter the scheme.
Basic Conditions
📋Conditions for entering the flat-rate scheme
Who CANNOT enter the flat-rate scheme
The flat-rate scheme is not available to:
- VAT payers – if you become a VAT payer, you must leave the flat-rate scheme
- OSVČ who are also employed – if you have concurrent income from employment (except income taxed at source, e.g. a part-time work agreement under 10,000 CZK per month)
- OSVČ with income over 2 million CZK – the flat-rate scheme has a hard income ceiling
- Property landlords with rental income exceeding 50,000 CZK per year
- Partners in general partnerships and general partners in limited partnerships
What Are the 80% and 60% Expense Deductions
To qualify for a lower band, it matters which percentage expense deduction applies to your type of activity:
| Expense deduction | Type of activity | Examples | |-------------------|------------------|----------| | 80% | Agricultural production, forestry and water management; craft trades | Carpenter, plumber, bricklayer, farmer | | 60% | Other licensed business activities (non-craft trade licences – free, restricted, and licensed trades) | Trader, marketing specialist, photographer | | 40% | Other self-employment income (without a trade licence) | Lawyer, tax advisor, writer, artist | | 30% | Rental income from assets registered as business assets | Rental of premises recorded in business assets |
Key Deadlines for 2026
| Deadline | What you need to do | |----------|---------------------| | 12 January 2026 | Final deadline for submitting the Notification of Entry into the flat-rate scheme for 2026, withdrawing from the scheme, or changing your band | | 20 January 2026 | Due date for the first advance payment for January 2026 – don't forget to update your standing order | | 20th of each month | Due date for the monthly flat-rate advance payment | | Within 15 days of becoming aware | Obligation to notify the tax office of a breach of conditions (exceeding the income limit, VAT registration, etc.) |
Deadline for 2027
If you are considering entering the flat-rate scheme from 2027, keep an eye on the deadline around 10 January 2027. The exact date will depend on the day of the week 10 January falls on. Details will be published on the Financial Administration website in autumn 2026.
Changes to the Flat-Rate Tax for 2026
Compared to 2025, one key change has taken effect:
Increase in the Band 1 Advance Payment
The monthly advance payment in Band 1 has risen from 8,716 CZK to 9,984 CZK. The reason is an increase in the average wage, which determines the minimum advance payments for social and health insurance:
| Component | 2025 | 2026 | Difference | |-----------|------|------|------------| | Income tax | 100 CZK | 100 CZK | 0 CZK | | Social insurance | 5,473 CZK | 6,578 CZK | +1,105 CZK | | Health insurance | 3,143 CZK | 3,306 CZK | +163 CZK | | Total | 8,716 CZK | 9,984 CZK | +1,268 CZK |
Over the course of a year, Band 1 participants will pay 15,216 CZK more than in 2025.
Band 2 and Band 3 Advance Payments – No Change
The amounts for Band 2 (16,745 CZK) and Band 3 (27,139 CZK) remain unchanged for 2026.
Automatic Continuation in the Scheme
If you were in the flat-rate scheme in 2025, you automatically continue in the same band in 2026. You do not need to submit any new notification — you simply need to update your standing order if you are in Band 1.
Source: Czech Financial Administration – Flat-rate tax 2026: Updates, deadlines and recommendations
How to Register for the Flat-Rate Tax
Step by Step
📋How to register for the flat-rate tax
Where to Pay
Flat-rate advance payments are made to the bank account of your local tax office, using the prefix designated for the flat-rate tax. Your tax office will provide the account number, or you can find it in your confirmation of entry into the flat-rate scheme.
Watch out: use the correct variable symbol
When making your flat-rate advance payment, use your national identification number (without the slash) as the variable symbol. The payment must be credited to the tax office account no later than the 20th of the month for which you are paying. We recommend setting up a standing order well in advance.
Who Benefits from the Flat-Rate Tax — and Who Doesn't
The flat-rate tax is especially beneficial for:
- OSVČ with higher income within their band (the higher the income, the more advantageous the fixed payment)
- OSVČ without children who are not entitled to additional tax credits
- IT consultants, lawyers, and others using the 40% expense deduction — they often see the greatest savings compared to the standard regime
- Business owners who want peace of mind — no tax return, no reports, no year-end deadlines
The flat-rate tax is NOT beneficial for:
- OSVČ with children — you cannot claim the child tax credit or child tax bonus in the flat-rate scheme
- OSVČ with a mortgage — you cannot deduct mortgage interest payments
- OSVČ with low income (roughly below 550,000 CZK for non-craft trade licences) — in the standard regime, your tax after the basic taxpayer credit would be zero and you would only pay the minimum insurance contributions
- OSVČ with high actual expenses — if your real costs significantly exceed the flat-rate expense deduction, you will pay less in the standard regime
- OSVČ who want to declare a loss — losses cannot be reported in the flat-rate scheme
Practical Example
Example: does the flat-rate tax make sense for an IT consultant?
IT consultant, income 1,200,000 CZK, no children, no mortgage:
Standard regime (40% flat-rate expense deduction):
- Tax base: 1,200,000 − 480,000 = 720,000 CZK
- Tax at 15%: 108,000 CZK
- Basic taxpayer credit: −30,840 CZK
- Tax due: 77,160 CZK
- Social insurance: 29.2% of 50% of 720,000 = 105,120 CZK
- Health insurance: 13.5% of 50% of 720,000 = 48,600 CZK
- Total per year: 230,880 CZK
Flat-rate tax (Band 2):
- Total per year: 200,940 CZK
Saving with flat-rate tax: 29,940 CZK + zero administrative burden.
What Happens If You Breach the Conditions
If you stop meeting the conditions of the flat-rate scheme during the year, you must:
- Notify your tax office within 15 days of becoming aware of the breach
- File a standard tax return and reports for both the ČSSZ and your health insurance provider for the entire calendar year
- Flat-rate advance payments already made will be counted as advance payments towards your tax and insurance contributions
The most common reasons for leaving the scheme include:
- Exceeding the income limit of 2,000,000 CZK
- Registering as a VAT payer (exceeding the VAT threshold of 2,000,000 CZK over 12 consecutive months)
- Starting employment
- Rental income exceeding 50,000 CZK
Exceeding your band's limit vs. exceeding the overall cap
It is important to distinguish between two situations:
- Exceeding your band's income limit, but still within 2 million CZK — you do not have to leave the scheme, but you must move to a higher band in the following year (if you do not notify the tax office by 10 January, you will be automatically moved to the higher band)
- Exceeding the 2 million CZK limit — you must leave the flat-rate scheme and file a standard tax return
Keeping Records in the Flat-Rate Scheme
Even in the flat-rate scheme, you are required to keep records of your income and receivables. You do not need to record expenses (expenses are not claimed in the flat-rate scheme), but you must be able to demonstrate:
- Your total income from self-employment
- The breakdown of your income by type of activity (to verify that you are in the correct band)
- A record of receivables arising from your business activities
You do not submit this record anywhere, but you must have it available in case of an inspection by the tax authority.
Monitor your income as you go — DokladBot keeps an eye on it for you
Knowing your exact income at any point in the year is crucial for OSVČ in the flat-rate scheme — you need to know whether you are approaching your band's limit or the overall cap of 2,000,000 CZK, and whether the flat-rate tax still makes financial sense for you. DokladBot automatically tracks your income and alerts you when you are getting close to your band threshold or the overall 2,000,000 CZK limit. Just send an invoice via WhatsApp and DokladBot will log it for you. Start tracking your income with DokladBot — so no limit ever catches you off guard.
Voluntarily Leaving the Flat-Rate Scheme
If you find that the flat-rate tax is no longer working in your favour — for example, if you have a child and want to claim the child tax bonus — you can voluntarily leave the scheme.
Your notification of withdrawal must be submitted by the 10th day of the tax period — typically by 10 January of the year from which you want to return to the standard regime.
The same deadline applies to changing your band — whether you want to move to a higher band because your income has grown, or to a lower band because it has fallen.
Flat-Rate Tax and Your Pension
In the flat-rate scheme, you pay pension insurance contributions as part of your flat-rate advance payment. The amount of the contribution and the assessment base derived from it both affect your future state pension:
| Band | Monthly pension insurance contribution | Approximate assessment base | |------|----------------------------------------|-----------------------------| | Band 1 | 6,578 CZK | Minimum (approx. 22,527 CZK) | | Band 2 | 8,191 CZK | Middle (approx. 28,051 CZK) | | Band 3 | 12,527 CZK | Higher (approx. 42,901 CZK) |
In Band 1, you pay pension insurance only on the minimum assessment base, which means a lower future pension. If your pension matters to you, consider:
- Moving to a higher flat-rate tax band
- Taking out supplementary pension savings or a long-term investment product (DIP)
- Voluntarily increasing your contributions above the flat-rate amount (note that this is not possible within the flat-rate scheme itself)
For detailed information on pension insurance for OSVČ in the flat-rate scheme, visit the ČSSZ website.
Flat-Rate Tax and Data Mailboxes
Since 2023, virtually all OSVČ have been assigned a data mailbox by law. If your data mailbox is active (activated by logging in for the first time), you are required to submit your notification of entry into the flat-rate scheme and all other submissions to the tax authority electronically.
You can check the status of your data mailbox at info.mojedatovaschranka.cz.
Frequently Asked Questions
Can I be in the flat-rate scheme if I have a part-time work agreement (DPP)?
Yes, provided that income from your part-time work agreement (DPP) is subject to withholding tax — typically a DPP paying up to 10,000 CZK per month with a single employer, where you do not sign a taxpayer declaration. Such income does not violate the condition of having no employment income.
Do I need to record expenses in the flat-rate scheme?
No, you do not claim or record expenses in the flat-rate scheme. However, you are required to keep records of your income and receivables.
What if I have a child during the year?
You cannot claim the child tax credit in the flat-rate scheme. If you want to take advantage of the child tax benefit, you must leave the flat-rate scheme — you can do so by submitting a notification by 10 January of the following year. You will not be able to claim the child credit for the year in which you were in the flat-rate scheme.
Can I combine the flat-rate tax with rental income?
Yes, but only if your combined income from capital assets, rental, and other income does not exceed 50,000 CZK per year. If you exceed this amount, you cannot enter the flat-rate scheme.
How many OSVČ use the flat-rate tax?
According to the Czech Financial Administration, over 125,000 OSVČ are using the flat-rate scheme in 2026. More than 11,000 new participants joined compared to the previous year.
Useful Links to Official Sources
- Czech Financial Administration – General information on the flat-rate tax
- Czech Financial Administration – Flat-rate tax 2025/2026
- Czech Financial Administration – Flat-rate tax 2026: updates and deadlines
- Czech Financial Administration – Notification of entry into the flat-rate scheme
- Czech Financial Administration – Questions and answers on the flat-rate tax
- ČSSZ – OSVČ in the flat-rate scheme
- MOJE daně portal
- Data mailboxes – information
This article is intended as a general information guide and does not replace individual tax advice. All figures are based on official sources from the Czech Financial Administration, ČSSZ, and VZP, as valid in February 2026.
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