The TPA Group, in collaboration with personnel consulting firm Kienbaum, conducted a survey (link HERE) to determine the average gross remuneration for four groups (managing directors, executives, white-collar workers, blue-collar workers) in twelve selected countries where the TPA Group operates. The following article summarizes the most important findings on remuneration in the Czech Republic.
Gross remuneration was used to calculate the total costs for employers (which consist of gross amounts, the employer’s share of social insurance contribution, non-wage labour costs) and net amounts paid out to employees. This study was based on different gross amounts of varying sizes depending on the country. Different tax systems (flat tax/progressive tax rate) and social security regulations result in different outcomes depending on the employee group.
Total Personnel Costs for Employers:
In terms of total personnel costs for employers, Austria ranked first, followed by Slovenia, the Czech Republic and Slovakia. The Czech Republic, as well as other countries that joined the EU earlier, has higher costs compared to countries that joined the EU afterwards (e.g. Romania or Bulgaria).
Net Amounts for Employees:
The following paragraphs refer to net amounts for employees in different groups. Austria, as the country with the highest gross amount, also has the highest net amount even though it has high taxes and social security contributions. Except for the blue-collar group, the Czech Republic is always ranked second.
Managing Directors:
In the Czech Republic, the expected average personnel costs for this group are approximately 65% less than those in Austria, which holds the top position. What is interesting is that the absolute difference in labour costs between the Czech Republic (second-ranked) and the country with the lowest costs (Albania) is smaller than the difference between Austria and the Czech Republic.
The average total gross salary of a salaried manager is 201,200 EUR per year. After deductions for social insurance and tax, the net amount received by the manager is 146,178 EUR annually. Meanwhile, the employer has total costs of 240,488 EUR per year.
Executives:
As the group above, the Czech Republic is in second place behind Austria. Here, however, the difference is slightly larger, with personnel costs on average 80% lower than in Austria.
For an executive, the average total gross salary amounts to 77,300 EUR per year. After deductions for social insurance and tax, the net amount is 56,926 EUR annually. The employer incurs total costs of 103,427 EUR per year.
White-Collar Workers:
The Czech Republic takes second place behind Austria again, but this time it has lower personnel costs by as much as 100%. The average total gross salary stands at 38,700 EUR per year. After deduction for tax and social security, the net amount is 29,654 EUR. Meanwhile, the employer’s total costs are 51,781 EUR per year.
Blue-Collar Workers:
In this group, the Czech Republic is in third place relatively far behind Austria and Slovenia. This group has a total gross salary of 13,300 EUR per year, the net amount is 11,010 EUR per year after deducting social insurance and tax. The cost to the employer is a total of 17,795 EUR per year.
There are significant differences in labour costs for workers. The difference depends on whether they work in manufacturing or in other areas.
Selected Highlights from the Country Report of Advantage Austria /Austrian Economic Chamber:
Income tax is 15% up to approx. 64,055 EUR, after reaching this threshold it is increased to 23%. The employee‘s social security contributions do not reduce the tax base.
The maximum assessment base is only for social insurance, and in 2024 it is 85,410 EUR per year. The employer contributes 33.8% of the total gross salary, of which 9% is health insurance. The employee contributes 11.6% of the total gross salary, of which 4.5% is health insurance.