The Czech Republic or Czechia is a great place to live and work thanks to its highly diversified economy, high quality of life, celebrated work/life balance, low cost of living, and much more. Located at the heart of Europe, this country is conveniently positioned for trade and business. This, and several other factors, has helped it to stay robust and stable over the past few years, thereby offering endless economic opportunities for expats and locals alike. When looking for a new job, particularly in a foreign country, it’s always a good plan to check out the salary you’re likely to receive based on your skills and experience. After all, you need to fund your lifestyle and pay bills.
What is the average salary in the Czech Republic? A person working in this country will make an average gross salary of $4,256/month, $51,395/year, or $24.50 an hour. Given that these figures are gross salaries, the net pay after tax and other deductions will be much lower. Of course, salaries vary significantly depending on a number of factors, which I’ll discuss later.
Known for being a stable westernised market with good transportation and infrastructure links, the Czech Republic is an excellent base for international business. As a result, there are a considerable number of professional opportunities for expats to explore. The Czech Republic is very welcoming towards foreign workers. In fact, the Czech Foreign Ministry announced in early 2018 that they would increase the number of work permits that are issued annually to accommodate the increasing demand for international expertise. Whether you’re already living in Czechia and are aiming to grow your career or are considering relocating to this great country, here are a few guidelines to help you manoeuvre the local workforce much easily.
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AVERAGE SALARY IN THE CZECH REPUBLIC
The Czech Republic labour market continues to be saturated with vacancies as evidenced by the low unemployment rate of 2.2%. As a result, there’s a lot of competition to attract and retain talent. This is one of the forces that have driven up wages in many sectors. The country has seen some of the highest increases in average salaries over the past couple of years. This is obviously a good sign for expatriates wishing to look for employment here. However, this doesn’t mean everyone is getting the same salary, let alone the same high salaries. As I mentioned earlier, salaries in this country vary depending on a number of things such as:
Different regions experience different rates of economic growth, thus it only makes sense that salaries will differ. Prague, being the capital city of the Czech Republic, offers the highest salaries in the country with an average gross of $4,467/month. After all, it’s the major Czech economic and cultural centre, and one of the continent’s finest cities. A majority of the biggest companies in the country are headquartered there and several multinational companies are also based in Prague. With more job offers come competitive salaries. Other high-paying regions include the South Moravian Region, particularly Brno, and the Central Bohemian Region.
Some jobs, particularly highly-skilled jobs, pay more than others. Unskilled workers receive some of the lowest salaries in this labour market. People in the same profession will still earn differently depending on their job titles. Those in the managerial roles earn significantly higher than those in junior or entry-level positions. Here’s a look at the average monthly gross salary of popular professions and job titles in the Czech Republic:
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- Internal auditor – $4,137
- Financial Manager – $8,758
- Administrative assistant – $2,173
- Aerospace engineer – $4,462
- Pilot – $5,025
- Architect – $3,587
- Teller – $2,916
- Bank branch manager – $5,956
- Project manager – $5,110
- Civil engineer – $3,650
- Engineer – $3,871
- CEO – $9,058
- CFO – $9,018
- Chef – $3,337
- Hotel manager – $6,405
- Travel agent – $3,270
- Dentist – $10,140
- Laboratory technician – $3,083
- Computer technician – $3,328
- Developer/programmer – $3,595
- Sales representative – $2,790
- Sales manager – $6,319
The numbers above show that the best salaries are generally found in the IT and telecommunications sectors. Also, some jobs in the medical field offer well over $8,000 a month. Banking, finance, and hospitality industries offer above-average salaries. The retail sector, on the other hand, has some of the lowest salaries in the country, although senior employees and top management personnel exhibit higher salaries and bonuses than juniors.
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In addition to these two, other factors that will affect your salary in the Czech Republic include your level of education, years of experience, and your employer. A higher level of education and/or many years of working experience will naturally put you among the top earners.
All the salaries mentioned above are gross but what you take home is net pay, which is gross salary less income tax and several other deductions. The income tax for resident employees is a flat rate of 15% on taxable income. The same rate applies to self-employed people. Employees are also required to make contributions to the Czech social security system, which amounts to 11% of their gross salary. Once these have been deducted, the remainder is the net pay, which is what you take home.
Despite offering high gross salaries, wages in the Czech Republic are significantly lower when compared to other European countries. The high tax and social security deductions are often cited as the reasons for lower wages in the country.
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CZECH REPUBLIC AVERAGE INCOME PER PERSON
The Czech Republic performs well in many measures of well-being. It ranks above average when it comes to jobs and earnings, work/life balance, security, education, and other components of quality life. Another way to evaluate the standard of living and the quality of life of a particular population is by calculating the average income per person or the GDP per capita. The GDP per capita in Czech was last recorded in 2018 at $37,370 at purchasing power parity and $22,850 at nominal value.
MINIMUM WAGE IN THE CZECH REPUBLIC
The Czech Republic has a statutory minimum wage, which is the lowest legally permissible wage for an employee. The national minimum wage (NMW) is regulated by governmental decree and is subject to change every year, depending on the current economic situation. As from January 1st 2020, the minimum wage was set at 14,600 CZK ($586.38) per month for the salaried employees or 87.30 CZK ($3.50) per hour for the hourly jobs. This is a 9% increase from the previous year’s value. After-tax, this amount comes down to about 12,124 CZK ($487.03) a month.
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The governmental decree in the Czech Republic defines 8 workgroups, all of which have different minimum monthly and hourly rates. The table below shows the different workgroups together with their legal minimum wages:
|Work group||Minimum hourly rate (CZK)||Minimum monthly wage CZK/USD|
These work groups are set up based on how complex, strenuous, or liable the work is. So, make a point of finding out what category your job falls under.
While these are the guaranteed level of minimum wages, they only apply to employees working 40 hours per week. If your working hours are less than that, your minimum hourly rate will be adjusted accordingly.
This country currently has one of the strongest economies with low unemployment rate, and has experienced a rather steady GDP growth in the last couple of years. Yet, its minimum wage still hasn’t caught up with Western European standards. Trade unions welcomed this year’s rise although they said it should have been higher.
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CZECH REPUBLIC INCOME DISTRIBUTION
Understanding the way income and wealth are distributed across the Czech Republic is extremely important. It determines the extent to which individuals within the national economy have access to the goods and services produced in it. Czechia is unmatched with regard to this.
According to the reports published by the EU commission, the Czech Republic is one of the most egalitarian nations in the region when it comes to income and wealth distribution. Its income quintile share ratio (the difference ratio between the total income earned by the top 20% richest population and the bottom 20% poorest population) stood at 3.3 in 2018. This means that the top 20% income earners in the Czech Republic make 3.3% higher than the bottom 20% income earners. Although this income quintile share ratio was higher than the previous year’s figure of 0.1, it was still the lowest among all EU countries.
According to the report, this economy also stands out as having the lowest percentage of people who are threatened by social exclusion and poverty. Only 1.5% of the young people employed in Czechia are at risk of poverty. This report doesn’t, however, provide information related to non-monetary factors that are likely to affect the quality of life of Czechia’s population.
Another instrument used to measure income distribution/inequality is the Gini coefficient, which was recorded at 25.60% in 2018. This is once again one of the lowest rates in Europe.
Not all is perfect though. Despite having one of the lowest levels of income inequality in the world, the Czech Republic has the second-highest gender wage gap in Europe. On average, men earn 22% more than their female counterparts doing the same job. The gender pay inequality is even higher in finance and insurance jobs at 40%, followed by information and communications jobs at 33%.
CZECH REPUBLIC JOB MARKET
The Czech Republic’s position, right in the centre of Europe, boosts its attractiveness for many international companies with many choosing to base their European headquarters here. The economy has its roots in the manufacturing sector with key industries including automotive, steel production, pharmaceuticals, engineering, and more. With the country adopting a more high-tech and service-based economy, IT, telecommunications, finance, and tourism industries are booming. As with most economies, the services sector is the biggest employer while jobs related to the agricultural and textile industries are particularly in decline.
The labour market in this country differs significantly depending on the region. The best jobs with good salary packages are generally found in the capital city, Prague, but there are endless opportunities in other cities as well.
JOB OPPORTUNITIES FOR EXPAT JOB-SEEKERS
There are several rewarding opportunities for foreigners in the main industries mentioned above. Many foreigners also find work teaching English, especially in big cities where there are several private language schools.
That being said, keep in mind that you’ll have to compete with the highly educated local labour force. Any employer who wants to hire a foreigner must prove that there’s no local qualified and willing to fill the position. This can be very hard and time-consuming, which is why many employers, especially in smaller companies, avoid hiring foreigners in the first place. Non-Czech companies are, however, not affected by this regulation. This makes it a lot easier for expats to find employment in international companies located in the Czech Republic.
Another hurdle for expats in this country is the Czech language. Being able to speak the local language is very essential for finding work here. The good news is English is becoming widely spoken, especially in urban areas and among the younger generation. Plus, certain sectors like tourism require employees who can speak other languages (particularly English) to cater to international visitors. International companies also generally use English.