Domestic Business Travel

As of 1 January 2021, a directive of the Ministry of Labor and Social Affairs amending travel compensation for employees paid during the course of domestic business travel was passed. Per diem rates and compensation for the use of vehicle both increase and average cost of fuel decreases going forward. The directive includes also referential cost for electric energy in case of charging personal electric cars used for business related purposes in cases where the real cost is not available.

Other conditions of providing per diems remain unchanged.

Average cost of fuel

• 95 octane petrol: CZK 27.80
• 98 octane petrol: CZK 31.50
• Diesel: CZK 27.20
• Electricity (electric cars): CZK 5.00 for kWh

Rate of compensation of the use of vehicles for 1km of travel

• Motorbikes and tricycles: CZK 1.20
• Personal vehicles: CZK 4.40

Per diems for every day of business travel depending on its length

• 5 – 12 hours: CZK 91 – 108
• 12 – 18 hours: CZK 138 – 167
• More than 18 hours: CZK 217 – 259

The amount of per diems provides bases for calculation of the maximum allowed cash meal allowance, which has been exempt from tax for the employees since January 2021. This amounts to a maximum of 70% of the upper limit of the meal allowance for a business trip lasting 5 – 12 hours, i.e. CZK 75.60.

Foreign Business Travel

As of 1 January 2021, several changes come into effect regarding the rates of foreign per diems when on business travel outside the Czech Republic. Increase in foreign per diems concerns the following 17 countries where the per diems will be as follows (see the table below). For employers in the private sector, the given rates can be reduced for their employees, pursuant to Article 170 Section 2 of Labor Code, by up to 25%, or by 50% for crews of domestic ships. In case of increase of per diems above the stipulated amount, the difference shall constitute tax non-deductible expense for the employer and taxable income for the employee (also subject to social security and health insurance premiums).

Rules for reduction of per diems in case of provision of one or more meals replacing breakfast, lunch or dinner, for which an employee has not contributed financially, remain unchanged, as follows:

• Basic rates are reduced for every meal provided free of charge by 25%,
• Basic rates amounting to 2/3 of standard ones (in case of foreign business travel of between 12 and 18 hours in a given day) are further reduced by 35% for every meal provided free of charge,
• Basic rates amounting to 1/3 of standard ones (in case of foreign business travel of between 1 and 12 hours in a given day) are reduced by 70% for every meal provided free of charge.

Similarly as in prior years, an employee can also receive pocket money of up to 40% of base per diems, based on the length of the foreign business travel. Pocket money is calculated before a potential reduction due to provision of a meal free of charge.

Table of changes for foreign per diem rates

All other per diem rates and conditions for their pay-out remain unchanged and are the same as in 2020.