How is the minimum wage calculated and what will change from 2025?

The minimum wage is not only the lowest possible remuneration for work, but also affects other amounts. Find out how it works, who sets it, how to calculate the correct minimum wage per hour for different types of jobs and what changes to prepare for from 2025.

What is the minimum wage and how is it set?

Minimum wage means the lowest allowable pay for work done that you can pay your full-time workers. The monthly amount corresponds to a normal working week of 40 hours and is also converted to the minimum hourly rate.

The minimum wage does not include supplements for:

• working on public holidays or weekends;
• night work;
• overtime;
• work in difficult working environments.

The minimum wage applies both to employees in a regular employment relationship and to those working under a work performance agreement or a work activity agreement.

The level of the minimum wage is set by the state (although it applies only in the private business sector). It should, as a minimum, take into account the purchasing power of the worker with respect to the cost of living, the general level of wages (or the ratio to the average wage in the country), the rate of wage growth and the national productivity rate.

Minimum monthly wage

For 2024, the government has announced a minimum monthly wage of CZK 18,900. The amount has increased by CZK 1 600 year-on-year, the largest increase in history, and has more than doubled in the last 10 years (2014: CZK 8 500).

Minimum wage per hour

The minimum hourly wage is the lowest amount you can pay your employees as an hourly rate (including temporary workers on a FTE/PPP basis).

If your employees work on a continuous or multi-shift basis, they have a legally reduced working week of only 37.5 hours. Also, employees in a two-shift operation can officially work shorter hours - in this case it is 38.75 hours per week.

The monthly minimum wage is the same for all these workers. So for shorter working weeks, you need to recalculate the minimum hourly wage according to their hours.

The minimum hourly wage in 2024 works out as follows:

Minimum wage for part-time work

If your employee has a part-time job and his working time is, for example, 20 hours per week, the monthly minimum wage will be reduced proportionally - in this case by half. In 2024, such a worker would therefore receive at least CZK 9 450 per month.

The correct calculation of the minimum wage is also important if the amount on your pay slip is less than the minimum - then you need to provide the employee with a top-up to the minimum wage.

Guaranteed wage vs. minimum wage

You may also have come across the term guaranteed wage. The difference is that while the minimum wage applies to all occupations across the country, the guaranteed wage is based on so-called job groups divided according to the complexity, responsibility and strenuousness of the work.

There are currently 8 work groups in total. At the lowest level (Group 1 - e.g. kitchen help, general cleaning, delivering parcels, etc.) the guaranteed wage is the same as the minimum wage. The guaranteed wage cannot therefore fall below the minimum wage. Employees in higher job groups must then be paid at least the guaranteed wage for their band.

What other amounts are affected by the minimum wage?

The current minimum wage does not just directly affect the amount you are paid. If the minimum wage rises, this usually leads to a recalculation in the following areas:

Changes to the minimum wage from 2025

In the summer of 2024, an amendment to the Labour Code was passed by the Senate which will bring two main changes from January 2025:

• The abolition of the guaranteed wage - only the so-called guaranteed wage (for the public sector) will remain, and it will be divided into 4 groups of work according to difficulty.
• Regular indexation of the minimum wage - now the increase in the minimum wage will not be announced by the government, but by the Ministry of Labour and Social Affairs by 30 September of the calendar year.

These rules will be anchored directly in the law. The advantage of the new system of minimum wage indexation is better predictability of its increase. This will allow you to more accurately estimate your staff costs as part of your financial planning.

You will also find out about the increase in the minimum wage sooner - until now, it was customary to announce the new amount at the end of the year with effect from the beginning of the following year, so you only had a few days to take the change into account.

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