Summer workers pay taxes based on the contract they signed and based on their gross salary or remuneration for work. Students can have any amount of income regardless of whether they signed an agreement or an employment contract. Summer jobs are not only popular with students and young people but also with seniors and unemployed people at the Labour Authority.

For students it is best to conclude the agreement to complete a job (DPP) if the work is short-term (up to 300 hours a year for one employer) with a monthly salary of up to CZK 10,000. Less advantageous is the employment agreement (agreement on part-time work activity (DPČ)) under which the students have to pay social and health insurance at the point at which their salary amounts to CZK 2,500 per month.

For both agreements they can use the taxpayer`s basic allowance and students can also benefit from the student`s allowance if they sign a taxpayer tax declaration with the employer. If the temporary worker does not sign the tax declaration (so-called pink paper), the allowance shall not be applied and the person`s income is then taxed using a final withholding tax. Such income is not considered in the tax return and in the annual tax clearance. The taxpayer may claim back the withholding tax if he/she submits a tax return on a voluntary basis and includes all income from the agreements together with the tax withheld.

Each taxpayer, i.e. including students/temporary workers, can apply a basic taxpayer allowance, which is CZK 2,070/month. Students can also use the student allowance (CZK 335/month). Students under the age of 26 or potentially 28 years old are entitled to this allowance if they study in a full-time or doctoral program.

Veronika Nováčková