On 8 October 2026, the Czech Financial Administration (Finanční správa České republiky) issued a critical alert for employers regarding the reporting of income data at the start of the new calendar year for employees whose employment terminated in the previous year. This guidance addresses obligations under the Unified Monthly Employer Reporting (JMHZ) framework, which mandates electronic submission of payroll and tax data to tax and social security authorities. The alert clarifies that employers must include terminated employees in the January 2026 JMHZ submission for income paid or deemed paid in the final settlement, ensuring accurate calculation of annual tax reconciliation (rozdělení) and social security contributions. Failure to report correctly may trigger penalties under the Tax Code (Act No. 280/2009 Coll.) and the Social Security Act (Act No. 582/1991 Coll.). The directive is effective immediately for the upcoming January 2026 filing period.
Key Takeaways
- Mandatory Inclusion in January JMHZ: Employers must report final payments, severance, and unused leave payouts for staff terminated in 2025 within the first JMHZ submission of 2026, using the correct income codes to distinguish termination-related compensation from regular wages.
- Annual Tax Reconciliation Impact: Accurate reporting ensures the tax administration can pre-populate annual personal income tax returns for terminated employees, preventing discrepancies that could delay refunds or trigger audits for both the employer and the former employee.
- Social Security Compliance: The guidance emphasizes correct assessment bases for health and social insurance contributions on termination payments, aligning with the 2026 amendment to the Assessment Base Decree which modifies caps and exemptions for one-off compensation.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement