As part of the amendment to the Employment Act, an income tax change was proposed regarding health benefits for employees. These benefits are currently, together with other so-called leisure benefits, exempt from tax up to half of the average wage, in aggregate for all such benefits. Thus, employees often prefer to exhaust this limit by contributing to recreation rather than health care.

A separate limit should be introduced for health benefits up to the average wage. The current limit for other leisure benefits would remain unchanged (half the average wage).

To illustrate, the average wage for 2025 would be CZK 46 557, and half of this amount would be CZK 23 278.

This proposal responds to the demands of employers, trade unions and professionals who consider health benefits to be beneficial for employees, employers and the state. Thanks to this change, employers could better support the health of their employees by financing vaccinations, rehabilitation, immunity-boosting vitamins purchased in pharmacies, specialised medical care or psychological counselling provided by health care institutions - up to the new limit.

On the other hand, this change imposes an additional administrative burden on employers, as they would now have to track not just one, but two benefit limits for each employee.

The amendment is planned to take effect from 1 January 2025.

If you have any questions, please do not hesitate to contact the PKF APOGEO Tax team.

Richard Novotný

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