Simplification for Employers: New Reporting Exemptions in the JMHZ

In connection with the introduction of the Unified Monthly Employer Report (known by its Czech acronym JMHZ), payroll and HR system vendors have repeatedly raised the question of whether it is necessary to report exempt income from employment in situations where:

• The recipient of such income is not an employee of the employer in the given calendar month (e.g., a former employee); or
• An employment relationship was never established;
• And at the same time, this individual has no other income from employment (whether taxable or exempt) in that specific calendar month.

Key Scenarios Covered by the Exemption

Specifically, this concerns the following situations:

• Social events: Income arising from the participation of former employees in social events organized by the former employer (§ 6 (9) (g) of the Income Tax Act; following the amendment, point (d)).
• Meals for retirees: Meals provided by a former employer to former employees who have retired due to old age or disability (§ 6 (9) (t) of the Income Tax Act).
• Student training: Income of pupils and students from practical training (§ 6 (9) (k) of the Income Tax Act).
• Election commissions: Remuneration for members of local election commissions (§ 6 (9) (s) of the Income Tax Act).
• Transport benefits: Benefits provided to former employees by an employer operating public transport (§ 6 (9) (e) of the Income Tax Act).
• Legislative Solution and Timeline

Based on negotiations between the relevant ministries and the General Financial Directorate, a solution has been reached involving a legislative amendment to Act No. 323/2005 Coll., on the Unified Monthly Employer Report.

The amendment aims to eliminate the obligation for employers to report these exempt incomes—and the individuals receiving them—in the JMHZ, provided that these individuals receive no other employment income from that employer in the relevant month.

• Planned Effectiveness: January 1, 2027.

• Administrative Relief for 2026: To reduce the administrative burden immediately, the Financial Administration of the Czech Republic has stated that it will tolerate this procedure as early as 2026. Employers will not be required to report these incomes or the affected individuals in the JMHZ during the 2026 transition year.

FAQ: Common Questions Regarding the JMHZ

By when must an employer register all employed persons who now fall under the definition of an employee?

• Employers must fulfill this registration obligation between April 1, 2026, and April 30, 2026.

Will it be necessary to record employees on DPP (Agreement to Perform Work), DPČ (Agreement on Working Activity), or small-scale employment in the JMHZ?

• Yes, all such employees must be registered.

Does the JMHZ apply to Managing Directors (Jednatelé) receiving remuneration for their function?

• Yes, they fall under the definition of an employee according to the JMHZ Act.

Are students/pupils receiving training rewards included in the JMHZ?

• If they only receive exempt income from practical training, they are not to be included in the JMHZ for the year 2026.

Does the JMHZ apply to Homeowners' Associations (SVJ) if board members are paid for their function?

• Yes. Because they pay remuneration, the SVJ is registered as a payer of personal income tax on employment (either via advance or withholding tax). Consequently, the SVJ is subject to the JMHZ Act.

Is it necessary to record the level of education for every employee?

• No, only the highest level of education attained (according to the KKOV classification) is reported. This data is optional for Czech citizens employed on a DPP or DPČ.

Is ID/Passport data required for all employees, or only foreign ones?

• This data must only be reported for employees who do not hold Czech citizenship.

This text was translated by AI