1.04.2020 Labour law

[Czech Republic] Change in executions


On April 1st 2020 living minimum was increased, which has an impact on constants used for calculation of execution deductions.

CZECH REPUBLIC

The basic untouchable amount increases to 6.908 CZK. The dependent person’s untouchable amount increases to 1.727 CZK. Along with the change of living minimum, the incomes that can be deducted without any limits, changes too. The new limit is 20.724 CZK. The income above this limit is deducted from salary.

Since July 1st 2020 the rules for the calculation of untouchable amounts will change so those will again increase to 7.771,50 CZK and 2.590,50 CZK.

The government wants to motivate employees to move their economic activities from the grey economy to the legal sector, because now due to high execution deductions from salary, they don’t have a motivation to do so. The question is, whether these measures will bring the anticipated effects. Probably the bigger motivation would be if the untouchable amount was linked to the net salary. This way, most of debtors would prefer higher income, which would lead to an increase of execution deductions as well.


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