Single Monthly Employer Report and Annual Tax Reconciliation: What (Not) to Report in 2026

The introduction of the Single Monthly Employer Report brings changes not only to the scope of reported data but also to its significance in determining tax liability. Data on the results of the annual reconciliation of tax advances and tax credits will now be part of the submitted information. These details play a crucial role, as they directly influence the determination and self-assessment of personal income tax on employment at the employer's level and affect the employer's tax obligations for the given period.

Transitional Period in 2026

In connection with the system launch in 2026, the Financial Administration allows for a certain degree of tolerance. This is a response to the practical impacts of implementing the new system and the varying levels of readiness among employers' payroll systems.

In the initial phase, reporting the results of annual tax reconciliations will not be required for:

• Former employees whose employment ended in 2025 and who do not appear in the system at all (as they are not recorded via employee registration or an employment relationship identifier).

• Current employees—reporting their 2025 annual reconciliation results in the Single Monthly Report will be optional, depending on the readiness of the specific employer’s system.

It is important to emphasize that this relief is purely technical. The legal obligation to perform the annual tax reconciliation remains unchanged and applies to former employees as well, provided the statutory conditions are met.

Income at the Turn of the Year

A specific exception also applies to income for 2025 paid at the beginning of 2026. In this case, the Financial Administration allows these incomes and related tax data to be omitted from the January 2026 report.

This primarily concerns income paid or received by January 31 of the following year, including:

• Corresponding tax advances.

• Wage arrears for the previous period.

• Income subject to withholding tax.

This exception reflects the practical complications associated with payroll processing at the turn of the year and represents a temporary simplification of administration.

Looking Ahead to 2027

Even with these exceptions, the fundamental principle remains: the employer is obliged to report all employment income paid, regardless of whether the individual is still in an employment relationship at the time of payment.

While 2026 offers some flexibility, the final system configuration is quite strict. The transitional period is limited only to the first year of the system's operation. From 2027 onwards, the full regime will apply without exceptions. Employers should therefore not delay their preparations.

This text was translated by AI.