The minimum wage and its impact on the employer’s costs

The minimum wage is the lowest remuneration an employer may pay for work, and its amount is updated every year. However, it affects much more than just the lowest earnings – it feeds into payroll costs, wage supplements and contributions. Understanding its impact helps companies plan their budget better and keep wages under control, especially when they have a larger number of employees in lower-level positions.

How the minimum wage is set

The amount of the minimum wage is set either by agreement between the social partners or by an automatic statutory mechanism, and it applies in both a monthly and an hourly form. Alongside it, there are degrees of work difficulty, which determine the minimum wage entitlements for different positions above the level of the basic minimum wage. The specific amounts change every year, so always check the current figures in the legislation in force before setting wages.

Impact on total payroll costs

An increase in the minimum wage raises not only the wage itself but also the items linked to it. The employer’s contributions are calculated from the gross wage, so they rise along with it. Certain wage supplements that are derived from the minimum wage change as well. Costs can therefore rise even for employees who are not directly paid the minimum wage, because the company maintains fair pay differentials between positions.

• higher gross wage of the employees concerned,
• higher employer contributions,
• growth in wage supplements linked to the minimum wage,
• pressure on pay differentials across the whole company.

Degrees of work difficulty

Job positions are classified into degrees of difficulty, each of which carries a coefficient and therefore a higher minimum wage entitlement. Classifying a position correctly is important, because underrating it can lead to underpayments and penalties. The classification should reflect the actual difficulty, level of responsibility and independence of the position, not just its title.

How to prepare for the changes

Companies should review their wage settings every year before the new minimum wage takes effect. It is advisable to calculate the impact on the budget and to adjust employment contracts or wage assessments (mzdový výmer) in good time, so that they reflect the new level from the start of the year.

1. identify the positions concerned,
2. recalculate gross wages and contributions,
3. adjust wage assessments and contracts,
4. take the impact on wage supplements into account.

Why an expert view pays off

Correctly set wages protect the company against underpayments and at the same time help maintain fair pay differentials that motivate employees. Professional payroll processing ensures that all changes are reflected on time and correctly in every pay packet.

Impact on the employee’s net wage

An increase in the minimum wage shows not only in the company’s costs but also in how much the employee actually has left in their account. The rise in the gross wage also increases contributions and the advance tax payment, so the net wage does not rise in the same proportion as the gross wage. Employees sometimes see this as a contradiction, and it is useful to be able to explain it to them clearly. On the other hand, certain instruments help at lower incomes, for example the non-taxable portion of the tax base, which increases net income. An accurate calculation of the impact on both the gross and the net wage therefore helps the company communicate the changes transparently and plan the payroll budget for the coming year correctly.

Would you like a clear picture of how the new minimum wage will affect your costs? The Bilvao team will prepare a tailor-made calculation for you.

Current figures (2026)

Minimum wage 2026

Figures valid for 2026; check the current wording.

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Frequently asked questions

Does an increase in the minimum wage only affect the lowest-paid?

No. A rise in the minimum wage also increases contributions and certain wage supplements that are linked to it, and it puts pressure on pay differentials. The impact can therefore affect a wider group of employees.

How do I find out the minimum wage entitlement for a specific position?

It depends on the classification of the position into a degree of work difficulty, which carries a coefficient. The specific amounts change every year, so check the current figures or have a payroll accountant make a calculation for you.