Key Legislative Changes in 2026: What Will Directly Affect Employees’ Income and Security?

The year 2026 brings legislative amendments whose main objective is the consolidation of public finances.

The consolidation package introduced a number of different adjustments and did not bypass the Labour Code.

For employees, this means concrete changes in the tax and contribution burden and the rules for drawing state support. It is important to know the facts that will directly affect their net salary and social security.

1. Higher Contribution Burden and Lower Net Salary

Consolidation directly affects employees’ pay slips. The measures introduced mean higher labour costs and consequently a lower net salary.

Increase in contributions to the Health Insurance Company: The health insurance rate paid by the employee will increase by 1 percentage point – from the current 4% to 5%. Employer rates remain unchanged.

Social Insurance: Until now, income during temporary incapacity for work (PN), nursing allowance (OČR), and maternity leave was not subject to social insurance contributions. However, this changes from 1 January 2026, meaning income during PN, OČR, and maternity leave will now be subject to contributions. This includes, for example, rewards achieved during this period.

2. Non-Taxable Amount of the Tax Base (NČZD)

Non-taxable parts of the tax base represent one of the ways a natural person can reduce their resulting income tax. These are legally stipulated amounts that a taxpayer can deduct from their tax base before the actual tax calculation. In practice, these non-taxable amounts reduce the amount of tax the taxpayer pays to the state.

Currently, three types of non-taxable parts of the tax base apply:

• Non-taxable part of the tax base per taxpayer
• Non-taxable part of the tax base per spouse
• Contributions for supplementary pension savings (the so-called III. Pillar)

From the new year, the value of NČZD is reduced by limiting the multiples of the living minimum for calculation purposes.

• Per taxpayer: Instead of 92.8-times the living minimum, from 1 January 2026, the NČZD value will be based on 91.8-times the living minimum.
• Per spouse: instead of 176.8-times the living minimum, it changes to 154.8-times the living minimum; and instead of 63.4-times the valid living minimum and one quarter, it changes to 70.8-times the living minimum and one third.

This change will lead to many employees being able to apply a lower deductible item. This means a higher tax base for calculation and again a lower net salary.

3. Income Compensation during PN

One of the main goals of the legislation is to reduce state expenditure on social support and transfer part of the costs to employers.

From the beginning of 2026, the period during which the employer pays the employee income compensation during temporary PN is extended. It will now be provided for 14 calendar days, instead of the current ten. From the 15th day of PN, the Social Insurance Agency will start paying the sickness benefit.

The employee will receive income compensation during temporary PN for the first 14 days of temporary PN as follows:

• 1st – 3rd day (inclusive) -> 25% of the daily assessment base,
• 4th – 14th day (inclusive) -> 55% of the daily assessment base, where the collective agreement can negotiate a higher percentage rate for the daily income compensation amount, but not more than 80% of the daily assessment base.

The stated change will only apply to incapacity for work that arose after 31 December 2025. For incapacity for work that arises in the current year 2025, the current rules will apply even if they last after the beginning of 2026.

4. Unemployment Benefit

The unemployment benefit will be gradually reduced percentage-wise, depending on the length of the period for which the unemployment benefit is drawn.

• During the first three months of the support period, the current amount of the unemployment benefit will be maintained, i.e., 50% of the daily assessment base (DVZ).
• The fourth month, the amount of the unemployment benefit will be reduced to 40% of the DVZ.
• The fifth month will be 30% of the DVZ.
• The last month of the support period, the benefit amount will be 20% of the DVZ.

The purpose of this change is to motivate recipients of unemployment benefits to return to the labour market sooner. The change will take effect from 1 January 2026, provided that if the insured person acquires the right to receive unemployment benefit before the end of 2025, a uniform amount of unemployment benefit will be maintained for them throughout the entire support period, i.e., their unemployment benefit will not be reduced.

5. Progressive Taxation of Natural Persons’ Income from 2026

The tax base for natural persons’ income, from which the tax liability is subsequently determined, is created from the sum of several partial tax bases.

From 1 January 2026, the following tax bases will apply to income from dependent activity:

6. Definition of Dependent Work from 1 January 2026

The amendment to the Labour Code effective from 1 January 2026 subtly adjusts the characteristics of the term “dependent work” by removing the condition “in working time determined by the employer”. Dependent work from 1 January 2026 is therefore understood as work performed:

• In a relationship of superiority of the employer and subordination of the employee,
• Personally by the employee for the employer,
• According to the employer’s instructions,
• In the employer’s name.

A slight redefinition of the concept of dependent work could help in detecting so-called fictitious self-employment, where people are forced to work as self-employed individuals, even though they clearly perform an activity that is dependent work. Often, citing the fact that the self-employed person worked at a time determined by them and not at a time determined by the employer, even though the other defining characteristics of dependent work were met, was a frequent objection during inspections carried out by the labour inspection.

Conclusion: Net Value for Employees

All the mentioned legislative changes place greater emphasis on the personal financial responsibility of employees and reduce the level of state support.

Therefore, for job candidates in the labour market, as well as for employers trying to retain their employees in 2026, it will be key to focus on real added value, especially in these areas:

• Gross Salary and Financial Benefits: contributions to the III. Pillar, above-standard paid PN, sick days (days without the need to use PN), extra holiday days, financial assistance in the event of long-term incapacity for work, meal allowance exceeding the legal requirement, 13th and 14th salary, regular salary increase up to the inflation rate, contributions for recreation and regeneration of the workforce, etc.
• Company Culture and Stability: How the employer is prepared for the rising costs of employees and what stability they offer during times of uncertainty.

Decide strategically. Choose a personnel partner who will guarantee you maximum stability, legal certainty, and continuity of your processes even in times of rapid legislative changes!