On 20 October 2023, Notice No. 313/2023 of the Ministry of Labour and Social Affairs was published in the Collection of Laws, Part 146, announcing the amounts of the reduction thresholds for adjusting the daily assessment base for the purposes of sickness insurance applicable in 2024.
How are the reduction limits determined?
The reduction thresholds are set according to the law 187/2006 Coll., on sickness insurance, § 22 in the following way:
→ First reduction limit shall be determined as one thirtieth of the product the general assessment base determined in accordance with the Pension Insurance Act for the calendar year preceding by two years the calendar year for which the amount of the reduction thresholds is determined and the conversion coefficient determined in accordance with the Pension Insurance Act for the adjustment of that general assessment base.
The amount of the general assessment base for 2022 and the conversion coefficient for adjusting this assessment base were published in Government Decree No. 286/2023 Coll. of 13 September 2023. Amount of the general assessment base for 2022 is 40,638 CZK. Amount of the conversion factor to adjust this assessment base for 2022 is 1.0819.
→ Second reduction limit is equal to 1.5 times amounts of the first reduction limit.
→ Third reduction limit is in the amount of 3 times amounts of the first reduction limit.
The amounts of the reduction thresholds shall be rounded up to whole crowns after all reduction thresholds have been calculated.
Reduction thresholds for sickness insurance purposes for 2024
The reduction thresholds for the purposes of sickness insurance in 2024 are:
- First Reduction threshold for adjusting the daily assessment base is 1.466 CZK
- The other Reduction threshold for adjusting the daily assessment base is 2.199 CZK
- Third Reduction threshold for adjusting the daily assessment base is 4.397 CZK
Which sickness insurance benefits are affected by the reduction thresholds?
The reduction threshold affects the amount of these sickness insurance benefits:
- Sick leave
- Nursing
- Long-term care allowance
- Paternal postnatal care
- Maternity cash assistance
- Pregnancy and maternity allowance
Calculation of the reduction threshold for the calculation of compensation for temporary incapacity for work and quarantine
From the above reduction thresholds set out in MSPV Notification No. 313/2023 Coll., the reduction thresholds for the calculation of compensation for temporary incapacity for work and quarantine paid to employees by the employer in the first 14 days are calculated. The conversion coefficient is 0.175 and the amount calculated is rounded up to the nearest penny.
The amount of the reduction threshold for calculating wage compensation for DPN and quarantine is:
- First reduction limit - 256,55 Kč (1.466 CZK x 0.175)
- The other reduction limit - 384,83 CZK (2.199 CZK x 0,175)
- Third reduction limit - CZK 769.48 (4.397 CZK x 0,175)
AVENSIO SW programme
The new reduction thresholds will be part of the version intended for January 2024 payroll processing.
