A Czech limited company (s.r.o.) is a separate taxpayer. Money in its bank account is not yours until it is paid to you in one of the ways below. Taking it out without a legal basis, for example by simply transferring it to your private account, creates a debt of yours to the company, and in the worst case a hidden dividend that the tax office taxes anyway.
The options at a glance
| Way | Tax | Social and health insurance | For the company |
|---|---|---|---|
| Salary (employment contract) | 15%, 23% above the yearly limit | Yes: employee 7.1% + 4.5%, employer 24.8% + 9% | Tax-deductible cost |
| Director's fee (contract for the function) | 15%, 23% above the yearly limit | Health always; social security from 4,500 CZK a month (5,000 CZK from 2027) | Tax-deductible cost |
| Dividend | 21% corporate tax first, then 15% withheld | None | Paid from profit after tax |
| Repaying your loan to the company | None | None | Only what you really lent |
| A loan from the company | None, if it is a real loan | None | Must be repaid, on market terms |
Salary
If you also work in the company, for example as a developer or consultant, you can have an employment contract for that work. The salary is taxed like any employment income: 15%, and 23% on the part of your yearly income above 1,762,812 CZK. On top come social security and health insurance from you and from the company. In total, a salary costs the company about 1.34 times the gross amount, and you take home roughly 70 to 80% of the gross, depending on your salary and tax credits.
The work you do as a director cannot be covered by an employment contract. That is what the director's fee is for.
Director's fee
The director (jednatel) can be paid for the function itself. The fee must be agreed in a written contract for the performance of the function (smlouva o výkonu funkce), approved by the general meeting. Without such an agreement, the function is unpaid.
- Tax: like a salary, 15% and 23%. Tax credits apply when you sign the taxpayer's declaration with the company.
- Health insurance is always due, also on a small fee.
- Social security is due only when the fee in a month reaches 4,500 CZK (2026; 5,000 CZK from 2027). Below that, no social security is paid.
- Since 2026, directors who are not Czech tax residents are no longer taxed by a final 15% withholding: see non-resident company directors.
Every company that pays a director's fee is an employer: it registers as an employer with social security (since April 2026 this also covers the tax office) and the health insurers, and files the monthly employer report, even for one director.
Dividends
A dividend is a share of the profit after corporate tax. The company first pays 21% corporate income tax on its profit. When it pays a dividend to a Czech tax resident, it withholds 15% and pays that to the tax office. That tax is final: the dividend does not go in your personal tax return. Together you lose about 32.85% of the original profit.
A dividend needs three things:
- Approved financial statements showing enough profit (including profit from earlier years).
- A decision of the general meeting; with one owner, a written decision of the sole shareholder.
- The insolvency test: the company may not pay out money if that would make it unable to pay its debts. The director is personally liable if it does.
Dividends to an owner living abroad are taxed at 15% in the Czech Republic, or the lower rate of the double tax treaty with their country; at 35% when there is no treaty or tax information exchange with that country. The owner's country may tax the dividend again, with a credit for the Czech tax.
Health insurance is not due on dividends. But if the dividend is your only income and you live in the Czech Republic, you are not insured through work, and you must pay public health insurance yourself as a person without taxable income: 13.5% of the minimum wage, 3,024 CZK a month in 2026.
Which is cheaper?
For one owner who lives in the Czech Republic, dividends usually leave more money in your pocket than a salary at the same cost to the company, mainly because no social security is paid. A salary or fee builds up your Czech pension and sickness insurance, lowers the company's tax, and may be needed for a visa or a mortgage. Many owners combine a modest fee with dividends. Compare your own numbers in salary or dividends? and the net salary calculator.
Not started yet? For one person working alone, a trade license usually leaves more in your pocket than either a salary or dividends from an s.r.o. There is no company accounting and no corporate tax. Social security and health insurance are lower, so you keep money to arrange your own pension. An s.r.o. is easy to open but difficult and costly to close (see closing an s.r.o.). Compare the costs on tradelicense.cz first.
Other ways money moves
- Repaying a shareholder loan: money you lent the company at the start (not the share capital) can be repaid tax-free. Keep the loan agreement and the bank transfers.
- Expenses: the company pays real business costs, such as travel, equipment and a phone, but private costs stay private.
- A loan from the company to you must have a written agreement, interest at market rate and real repayments; otherwise the tax office may treat it as a hidden dividend.
- Invoicing your own s.r.o. with a trade license for your work as its director is not possible. For other work it can be, but it is easily questioned.
Related
- Salary or dividends? calculator and corporate tax calculator
- Running an s.r.o.: every obligation in one calendar
- Non-resident company directors: what changed in 2026
- Corporate income tax for an s.r.o. on tradelicense.cz
This guide is general information for 2026, not personal advice: which way suits you depends on your income, residency and plans.
Official sources: Act No. 586/1992 Coll. on Income Taxes (§ 6, § 21, § 36), Act No. 90/2012 Coll. on Business Corporations (§ 34, § 40, § 59), Act No. 187/2006 Coll. on Sickness Insurance, Finanční správa, ČSSZ.
