Amendment to the Labour Code: home office costs 

Lucie Javorová
Amendment to the Labour Code gives a possibility to reimburse home-office costs at a flat rate amount.

In September 2023, the amendment to the Labor Code entered into force, which means that the provisions regarding remote work are effective from 1 October 2023. Do you know what will be different specifically?

The amendment to the Labor Code brings (among other things) a novelty in the area of reimbursement of costs incurred by employees when performing remote work. Up until now, there was the possibility for employers to reimburse the employee for the costs connected with remote work, if the employee proved these costs to the employer, which was very difficult and often impossible.

Newly, the employer is allowed to reimburse the employee for the costs related to remote work not only on the basis of the already mentioned proven costs, but also at a flat rate amount. The provision of a flat rate amount must be based on the contract or internal regulations and will be paid for each hour of remote work started. The flat rate amount will be determined (and subsequently adjusted) by a decree of the Ministry of Internal Affairs and Communications. The flat-rate amount will be based on data on the consumption of one adult person in an average household in the Czech Republic for one hour based on data determined by the Czech Statistical Office*. For the year 2023, the flat-rate amount should be CZK 4.60 per hour.

Flat-rate compensation in the specified amount will not be subject to personal income tax and social and health insurance contributions for the employee, and at the same time for the employer, this cost in the form of a flat-rate compensation will represent a tax-deductible cost. A higher compensation than the stipulated flat-rate reimbursement can be provided. However, the amount above the legal limit will be subject to personal income tax and social and health insurance contributions.

The employer and the employee may agree in advance in writing that the employee is not entitled to the reimbursement of costs in connection with the performance of remote work, or part of it. However, this variant cannot be covered by an internal regulation, but directly stated in an individual agreement with the employee.

*costs with which the CZSO will work to express average consumption include gas, electricity, solid fuels, heat supply and centralized hot water supply, water supply from water supply and water works and waste water removal, waste water removal and cleaning of pits and removal of municipal waste

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