[Czech Republic] Taking Vacation and Its Impact on Salary

The summer is slowly approaching and so is the holiday period. For most employees, vacation is a welcome time to rest and recharge. However, many people don’t realize that taking vacation can also affect the amount of their salary – and sometimes quite significantly.

How can withdrawal of holiday influence the employee’s salary? Let’s take a look at that now.

Employee’s absence due to holiday must be paid according to the law, however this absence isn’t paid in the same way as the worked day. For holiday purposes, average hourly rate (AHR) is used. Simply said, for calculation of AHR we have to use the previous calendar quarter’s data. An employee who received a substantial bonus payment in preceding quarter, will now receive more money for holiday withdrawal.

AHR however can decrease the gross salary as well. If the basic salary was increased during current quarter, the AHR will also be lower, because for its calculation the data from preceding quarter, when the basic salary was lower, were used. Probably the most unclear decrease of salary happens in months with the lowest number of working days. In that case, the basic salary is divided by low number, hence worked day is relatively more rated than in months with higher number of working days. Withdrawal of holiday in moths with lower number of working days can be called as “financially inconvenient”. Luckily, holiday is withdrawn mostly during summer time, when number of working days is higher.