Running a Business as a Student: How to Do It and What to Watch Out For
Running a Business as a Student: How to Do It and What to Watch Out For
Running a business while studying is an increasingly popular way for students to build independence before entering the job market. Whether you're a freelance graphic designer, a programmer with your own projects, a language tutor, or running an online shop with your own products — you can run a business as a student in the Czech Republic. And what's more, under very favourable conditions.
As a student running a business under a trade licence, you fall into the category of secondary self-employment. This comes with lower social and health insurance contributions, and if your earnings stay below a set threshold, you don't have to pay social insurance at all.
In this article, we'll walk you through step by step the conditions under which you can run a business as a student, what that means for your insurance obligations, how taxes work, and what to watch out for so you don't lose your advantageous secondary activity status.
Who Counts as a "Student" for Secondary Activity Purposes
Not everyone who is learning something is automatically considered a student from the perspective of social and health insurance. The law precisely defines what constitutes systematic preparation for a future profession.
Requirements for secondary activity recognition as a student
For your business to be classified as a secondary activity on the grounds of student status, you must meet two conditions simultaneously:
- Under 26 years of age — secondary activity status on the grounds of study is recognised only up to the day you turn 26
- Systematic preparation for a future profession — studying at a secondary school, higher vocational school (VOŠ), or university in an accredited study programme
For university study, both full-time and part-time (combined) formats are recognised. For secondary school, only full-time study applies.
Source: Act No. 155/1995 Coll., on Pension Insurance, § 21 and § 9 para. 6
What Counts as Systematic Preparation for a Profession
The following are considered systematic preparation for a future profession:
- Secondary school study — grammar schools, vocational secondary schools, and apprenticeship schools (full-time format)
- Higher vocational school (VOŠ) study — both full-time and part-time formats
- University study — bachelor's, master's, and doctoral programmes, both full-time and combined formats
- Holiday periods between academic years (provided the student continues into the next year)
- The period between finishing secondary school and enrolling at university (up to the end of the calendar year in which the student completed their secondary school leaving exam, provided they enrol for the following semester)
What Does Not Count as Systematic Preparation
- Language courses and retraining programmes
- Lifelong learning courses (unless part of an accredited study programme)
- Study at a foreign school not recognised by the Czech Ministry of Education (MŠMT)
- Part-time study at secondary school level (unlike university and VOŠ)
Watch out for the age limit of 26
On the day of your 26th birthday, you automatically lose your entitlement to secondary activity status on the grounds of study. From that day, your business becomes a primary activity with all the associated consequences — higher minimum advance payments, mandatory participation in pension insurance, and an obligation to pay at least the minimum health insurance advance payment.
You must notify your relevant OSSZ office and health insurance company of this change within 8 days.
Exception for doctoral students: The state pays health insurance for doctoral students over 26 who are studying a doctoral programme in full-time format for the first time and within the standard study period. However, for the purposes of social insurance and OSVČ secondary activity status, the 26-year age limit applies without exception.
How to Start a Business as a Student: Step by Step
📋How to start a business while studying
Minimum age for a trade licence
You can obtain a trade licence from the age of 18 (full legal capacity). If you are not yet 18, it is possible to involve a legal guardian, but this is complicated in practice. Most student entrepreneurs start their business after reaching adulthood.
Social Insurance for Student Entrepreneurs
Social insurance is the area where a student entrepreneur benefits the most from secondary activity status. This is because a threshold amount applies — if your annual tax base does not exceed it, you pay no social insurance at all.
Threshold Amount for 2026
Secondary activity threshold for 2026
Annual threshold: CZK 117,521
Monthly threshold: CZK 9,794 (for each month in which you carried out the activity)
What this means for a student:
If your tax base (income minus expenses) for the entire year 2026 is below CZK 117,521, you pay nothing in social insurance.
Example using flat-rate expenses:
- Business income: CZK 250,000
- Flat-rate expenses 60% (services): CZK 150,000
- Tax base: CZK 100,000
- Threshold: CZK 117,521
- Result: tax base is below the threshold = CZK 0 in social insurance
Example where the threshold is exceeded:
- Business income: CZK 400,000
- Flat-rate expenses 60%: CZK 240,000
- Tax base: CZK 160,000
- Result: tax base exceeds the threshold = you must pay the outstanding insurance contribution
Source: ČSSZ — Summary of key figures for 2026
Social Insurance Advance Payments
In your first year of business as a secondary activity, you pay no social insurance advance payments. After the year ends, you submit an income and expenditure statement to the ČSSZ (within one month of filing your tax return).
If you exceeded the threshold:
- You pay the outstanding insurance for the entire previous year in one lump sum
- From the following month, you begin making monthly advance payments (minimum CZK 1,574 for secondary activity in 2026)
If you did not exceed the threshold:
- You pay nothing — neither retrospectively nor as advance payments for the following year
- However, that year will not count towards your pension insurance record
A year not counted towards your pension — is it a problem?
As a student under 26, you shouldn't worry too much about one or two "uncounted" years. You need a minimum of 35 years of insurance contributions to qualify for a state pension. If you'd like the year to count, you can voluntarily pay pension insurance — a minimum of CZK 1,574 per month in 2026.
Health Insurance for Student Entrepreneurs
Health insurance works differently, and is particularly advantageous for students. The key concept here is state-insured person.
The State Pays for Students
As long as you are a student under 26 and are systematically preparing for a profession, the state pays your health insurance. This has a significant impact on your business:
📊Health insurance — student vs. other secondary-activity OSVČ
How It Works in Practice
First year of business: As a state-insured person in your first year of running a secondary activity, you pay no health insurance advance payments. After submitting your statement, you pay any outstanding insurance based on your actual profit.
Second year and beyond: Advance payments are calculated based on your income from the previous year. The advantage is that as a secondary-activity OSVČ, you are not subject to a minimum assessment base — you only pay insurance on your actual earnings.
Calculating health insurance for a student OSVČ
Formula: Insurance = (income − expenses) × 50% × 13.5%
Example:
- Annual business income: CZK 180,000
- Flat-rate expenses 60%: CZK 108,000
- Tax base: CZK 72,000
- Assessment base (50%): CZK 36,000
- Health insurance: CZK 36,000 × 13.5% = CZK 4,860 for the whole year
You pay this amount as a one-off payment within 8 days of submitting your statement.
Source: VZP — Health insurance payments in 2026
Notifying your health insurance company
You must notify your health insurance company of the start of your business within 8 days. If you use the Unified Registration Form (JRF) at the trade licensing office, this notification happens automatically. However, don't forget to provide proof of student status — otherwise the insurer may classify you as a primary-activity OSVČ.
Taxes and Tax Returns
As a student entrepreneur, you are required to file a personal income tax return if your annual business income exceeds CZK 50,000 (if you have other income alongside it, different limits may apply).
Taxpayer Credit and Student Credit
Tax credits for student entrepreneurs in 2026
Taxpayer credit: CZK 30,840 per year (available to every taxpayer)
Student credit: This credit was abolished from 2024 as part of the consolidation package. Students can no longer claim it.
What this means in practice:
- With a 15% tax rate and a taxpayer credit of CZK 30,840, you pay no tax if your tax base is below CZK 205,600
- For a student using 60% flat-rate expenses, this corresponds to annual income of approximately CZK 514,000
Example:
- Income: CZK 300,000
- Flat-rate expenses 60%: CZK 180,000
- Tax base: CZK 120,000
- Tax at 15%: CZK 18,000
- Taxpayer credit: −CZK 30,840
- Tax payable: CZK 0 (the tax cannot go below zero)
Actual Expenses vs. Flat-Rate Expenses
As a student entrepreneur, you can choose between two methods of claiming expenses:
📊Actual expenses vs. flat-rate expenses
Tip for students
Most student entrepreneurs have relatively low actual costs (computer-based work, services, tutoring). In that case, flat-rate expenses are almost always the better option — you don't need to keep receipts, and your tax base will often be lower than it would be with actual expenses.
Key Deadlines
📊Key deadlines for student OSVČ (for the 2025 tax year)
Practical Examples
Example 1: Graphic Design Student Freelancing
Markéta (22) is studying graphic design at university in full-time format. She earns extra income creating logos and graphic materials for small businesses.
- Annual business income: CZK 150,000
- Flat-rate expenses 60%: CZK 90,000
- Tax base: CZK 60,000
Income tax: CZK 60,000 × 15% = CZK 9,000 − taxpayer credit CZK 30,840 = CZK 0
Social insurance: Tax base of CZK 60,000 is below the threshold of CZK 117,521 = CZK 0
Health insurance: CZK 60,000 × 50% × 13.5% = CZK 4,050 per year
Total contributions: CZK 4,050 on income of CZK 150,000 — an effective rate of just 2.7%.
Example 2: Computer Science Student Earning Through Programming
Tomáš (24) is studying computer science in a combined format and develops web applications.
- Annual business income: CZK 480,000
- Flat-rate expenses 60%: CZK 288,000
- Tax base: CZK 192,000
Income tax: CZK 192,000 × 15% = CZK 28,800 − credit CZK 30,840 = CZK 0
Social insurance: Tax base of CZK 192,000 exceeds the threshold of CZK 117,521. Insurance: CZK 192,000 × 55% × 29.2% = CZK 30,835 per year + monthly advance payments of at least CZK 1,574 from the following month.
Health insurance: CZK 192,000 × 50% × 13.5% = CZK 12,960 per year
Total contributions: CZK 43,795 on income of CZK 480,000 — an effective rate of 9.1%.
Example 3: Languages Student Offering Private Tutoring
Eva (20) is studying English philology and tutors English and German.
- Annual business income: CZK 96,000 (CZK 8,000 per month)
- Flat-rate expenses 60%: CZK 57,600
- Tax base: CZK 38,400
Income tax: CZK 38,400 × 15% = CZK 5,760 − credit CZK 30,840 = CZK 0
Social insurance: Below the threshold = CZK 0
Health insurance: CZK 38,400 × 50% × 13.5% = CZK 2,592 per year
Total contributions: CZK 2,592 on income of CZK 96,000 — an effective rate of 2.7%.
Comparison of the three students
| | Markéta | Tomáš | Eva | |---|---|---|---| | Income | CZK 150,000 | CZK 480,000 | CZK 96,000 | | Income tax | CZK 0 | CZK 0 | CZK 0 | | Social insurance | CZK 0 | CZK 30,835 | CZK 0 | | Health insurance | CZK 4,050 | CZK 12,960 | CZK 2,592 | | Total | CZK 4,050 | CZK 43,795 | CZK 2,592 |
What Happens If You Interrupt or End Your Studies
One of the most important things to keep track of as a student entrepreneur is maintaining your student status. The moment you stop being a student, your secondary activity automatically becomes a primary one.
Interrupting Your Studies
If you take a break from your studies, you are no longer considered a person systematically preparing for a profession. This means:
- Your business becomes a primary activity
- The state stops paying your health insurance
- You must pay at least the minimum social insurance advance payments (CZK 5,720/month in 2026)
- You must pay at least the minimum health insurance advance payments (CZK 3,306/month in 2026)
Completing Your Studies (Graduation)
After successfully completing your studies, you have a grace period — a window after graduation during which you are still considered a student:
- Until the end of the calendar month in which you successfully completed your final examination (secondary school leaving exam or state finals)
- If you continue to a higher level of study — the period between academic years counts as systematic preparation
Turning 26
On the day of your 26th birthday, your student status for OSVČ secondary activity purposes ends automatically, even if you are still studying.
Notification obligation — 8 days
You must notify the relevant authorities of a change in status (completing studies, interrupting studies, turning 26) within 8 days:
- OSSZ (relevant social security administration office)
- Health insurance company
Failure to do so may result in penalties and outstanding insurance payments including late-payment charges.
Most Common Mistakes Student Entrepreneurs Make
Mistake 1: Not Registering as a Secondary Activity
If you don't tick the secondary activity box at the trade licensing office, or fail to provide proof of study, you will automatically be registered as a primary-activity OSVČ. This means higher advance payments from your very first month.
Mistake 2: Failing to Submit Statements
Even if you had no income or a zero profit, you must submit an income and expenditure statement to the ČSSZ and your health insurance company. Failure to do so can result in a fine.
Mistake 3: Forgetting to Report Changes
Completing your studies, interrupting your studies, or turning 26 are all changes you need to actively report. The system will not detect them automatically.
Mistake 4: Mixing Personal and Business Finances
Even though the law doesn't explicitly require it, having a separate bank account for your business makes record-keeping significantly easier and simplifies any potential audit by the tax authority.
Frequently Asked Questions (FAQ)
Can I run a business as a student in a part-time (combined) university programme?
Yes. For university study, both full-time and combined (part-time) formats are recognised as systematic preparation for a profession. However, for secondary school, only full-time study counts.
Can I have secondary activity status if I'm studying abroad?
It depends on whether the foreign school is recognised by the Czech Ministry of Education (MŠMT). If it is, the study counts as systematic preparation for a profession. If not, secondary activity status on the grounds of study will not be granted.
What if I have income from a casual employment agreement (DPP) alongside my business?
Income from a DPP and from business are combined for tax purposes. You report both types of income in your tax return. For the purposes of OSVČ secondary activity status, what matters is that you are a student — the DPP doesn't change that.
Can a student opt into the flat-rate tax regime?
Yes, provided you meet the conditions — income up to CZK 2,000,000, not a VAT payer, and no employment income (other than income taxed at source by withholding tax). Student status is not an obstacle to the flat-rate tax regime. However, bear in mind that with the flat-rate tax, you pay a fixed monthly amount including social insurance — so secondary activity status with the possibility of zero contributions may actually be more advantageous.
Do I need to use electronic sales registration (EET) or have a cash register?
The EET (electronic sales registration) system was definitively abolished in 2023. You do not need a cash register, but you are required to keep tax records or accounting records.
Can I run a business as a student and also work under a casual employment agreement (DPP)?
Yes, these are not mutually exclusive. For secondary activity status, one qualifying reason is enough (being a student). Income from a DPP is taxed separately (by withholding tax if it doesn't exceed the limit and you haven't signed a tax declaration, or by advance tax if you have).
What if I only run my business over the summer?
Seasonal business activity is subject to the same rules. The threshold is proportionally reduced based on the number of months during which you carried out the activity. You must submit statements to the ČSSZ and your health insurance company even if you were only active for one month.
Summary of the Benefits of Running a Business as a Student
📊Advantages and things to watch out for when running a business as a student
Conclusion
Running a business as a student is one of the most advantageous forms of self-employment in the Czech Republic. Thanks to secondary activity status and the fact that the state covers health insurance for students, overall contributions are minimal. For many students, total annual insurance payments amount to just a few thousand crowns.
The key to trouble-free student entrepreneurship is getting things set up correctly from the start — registering as a secondary activity, providing proof of student status, and filing your tax return and statements at the end of the year.
DokladBot helps student entrepreneurs too — keeping track of income and expenses without complex accounting software. Simply photograph a receipt via WhatsApp, DokladBot logs it automatically, and at the end of the year it reminds you of all the important deadlines.
Try DokladBot and keep your student business under control →
Useful links to official sources:
- ČSSZ — Mandatory OSVČ insurance participation
- ČSSZ — Summary of key figures for 2026
- VZP — Health insurance payments in 2026
- Financial Administration — Tax news for 2026
This article is intended as a general informational overview and does not replace individual tax or legal advice. The information is accurate as of February 2026. We recommend verifying current details on the websites of the relevant authorities.
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