🇨🇿 Czech Republic — Real Expenses Taxation for Freelancers in 2026

This is one of four detailed guides on Czech freelancer taxation. See the overview article for a comparison of all methods.

Main takeaways

What it is

The real expenses method is the default taxation mode for self-employed individuals (OSVČ) in the Czech Republic. You deduct your actual, documented business costs from gross income, and pay tax on what remains. It works exactly like a standard business profit calculation: income minus costs equals the taxable base.

There are no restrictions on which expenses you can claim — anything legitimately incurred for business purposes qualifies. The flip side is that you must keep all receipts, invoices, and records, and be able to justify every deduction if audited.

How the calculation works

Step 1 — Taxable income (základ daně)

Subtract your real business expenses from gross income. The result is your tax base, rounded down to the nearest 100 CZK.

Step 2 — Income tax

Apply progressive income tax:

• 15% on the portion up to 1,762,812 CZK (36× the average wage)
• 23% on anything above that

Then subtract the personal tax credit (sleva na poplatníka) of 30,840 CZK from the result. This credit directly reduces the tax owed; if it exceeds your tax bill the tax becomes zero (no refund).

Step 3 — Health insurance

13.5% on 50% of your tax base. A minimum base applies: your assessment base cannot be lower than 293,808 CZK for 2026 (regardless of how low your declared income is). Minimum annual health contribution: 39,665 CZK.

Step 4 — Social insurance

29.2% on 55% of your tax base, subject to:

• Minimum base: 235,044 CZK/year → minimum annual contribution: 68,633 CZK
• Maximum base: 2,350,416 CZK/year → maximum annual contribution: 686,321 CZK

Step 5 — Net income

Note: "net income" here is the cash left after paying all taxes and after spending your real expenses. The money you spent on business costs is gone; you only gained the tax deduction.

What counts as a deductible expense

Anything with a clear, demonstrable business purpose:

• Hardware and equipment — laptop, monitors, phone, peripherals
• Software and subscriptions — IDE licences, SaaS tools, cloud services, Adobe, etc.
• Professional development — courses, books, conferences, certifications
• Home office — a proportional share of rent and utilities if you work from home (requires documentation)
• Travel — business travel, client visits, mileage
• Accounting and legal fees — your accountant's fee is itself deductible
• Coworking space — rent and associated costs
• Subcontractors — payments to other freelancers or agencies for work on your projects

Purely personal costs (holidays, personal meals, home appliances not used for work) are not deductible.

Examples

All examples use zero declared real expenses as a baseline. (1 EUR ≈ 25 CZK)

When real expenses is the right choice

The effective rate under real expenses (roughly 33–37% at typical freelance incomes) is significantly higher than recognized expenses (13–14%) or fixed payment (12%). For most Czech freelancers with low actual business costs, it is the worst of the four options.

It becomes competitive — or even optimal — only when your real business expenses are genuinely large. The break-even point against the 60% recognized rate is approximately when your expenses exceed 60% of your gross income (the same amount the recognized rate would give you). At 1,000,000 CZK income, that means spending at least 600,000 CZK on real, documented business costs. Most software consultants and IT freelancers are nowhere near that.

Scenarios where it can make sense:

• You employ subcontractors and their invoices represent a large share of your income
• You have significant office or coworking costs
• Your actual expenses exceed what the recognized rate would give you
• You are in a transitional year with unusually high one-off costs (major equipment purchase, relocation)

Record-keeping requirements

You must maintain a cash book (peněžní deník) or equivalent accounting records documenting all income and all claimed expenses, with supporting documents (invoices, receipts) for every deduction. Records must be kept for at least 3 years (10 years for certain documents). Your accountant will handle the formal record-keeping structure.

What about Podnikio?

Podnikio handles your bookkeeping, quarterly advance payments, and annual tax filing — whether you are on real expenses or any other method. If your expense profile changes year to year, our platform and connected accountant will flag which method is most beneficial before you need to decide.

Calculator

Enter your gross income and actual expenses below to see your exact tax breakdown under the real expenses method — and compare it against recognized expenses and fixed payment side by side. And if you are considering other countries as well, check out the full tax calculator.

Contact us

If you have questions or want to discuss whether it's the right choice for your freelance business, feel free to reach out to us. We offer free initial consultation to help you navigate the complexities of freelancer taxation and find the optimal setup for your situation.