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Calculator

Sole trader, s. r. o. or employment in 2026

The question is never „how much will I earn“, but „how much I get to keep“. Enter the amount someone will pay for your work, and the calculator converts it three ways at once – through a sole trader business, through your own s. r. o., and through an employment contract. It calculates directly in your browser; nothing is sent anywhere and nothing is recorded.

How much the client pays for your work

With the flat rate you do not enter actual expenses – the 60 % flat rate replaces them and the s. r. o. is then calculated with no costs. Switch to actual expenses and the amount you enter is deducted for the sole trader and for the company alike.

For employment, the same amount is treated as the total employer cost – that is, everything the employer spends on you, including their own contributions. Otherwise the comparison would not be fair: neither a client nor an employer has any reason to pay more for the same work just because you do it in a different form.

Sole trader

An individual who invoices on their own

a year, that is a month
Income
Tax-deductible expenses
Health insurance 16 %
Social insurance 33,15 %
Tax base
Tax-free allowance
Income tax

s. r. o.

A company that pays out profit to a shareholder

a year, that is a month
Company's tax base
Corporate income tax
Profit after tax
7 % withholding tax on the profit share
Financial transaction tax
Director's health insurance

Employment

Full-time employment contract

a year, that is a month
Total employer cost
Gross wage
Health insurance 5 %
Social insurance 9,4 %
Tax base
Tax-free allowance
Tax advance payments

Enter an amount, and all three calculations fill in automatically. The rates and amounts are valid from 1 January 2026.

Who this calculation is for. For someone who wants to become independent and build up their own client base. It is not a guide on how to turn an employment contract into an invoice: the law does not allow dependent work to be performed as a sole trader, and both parties are liable. We explain exactly where the line is right below the calculation.

This is running a business

  • You have several clients, or at least the freedom to find more
  • You decide for yourself when and where you work
  • You work at your own expense and with your own equipment
  • You bear the risk – if the work does not turn out well, you do not get paid
  • No one gives you instructions as a superior

This is dependent work

The Labour Code defines it in § 1 ods. 2 as work performed in a relationship of superiority of the employer and subordination of the employee, performed personally by the employee for the employer, according to the employer's instructions and in the employer's name.

When these features are present, it is dependent work – and under § 1 ods. 3, it must not be performed under a commercial-law relationship. So not on an invoice either. It does not matter that both parties agree to it, or what is written in the contract. What matters is how the cooperation actually works in practice.

Both the employer and the person working are liable. For the company, this is illegal employment, and the labour inspectorate imposes a fine of 4 000 to 200 000 €, or at least 8 000 € where two or more people are involved. The National Labour Inspectorate also keeps a publicly accessible list of fined companies going back five years. The ban also applies to the person working themselves: „A natural person must not perform illegal work,“ states § 3 of the Act on Illegal Work and Illegal Employment. If you are not sure which form will hold up in your situation, write to us in advance rather than risk it – it can be reclassified retroactively too. More about the forms of cooperation is under payroll and HR.
Money is not the only criterion. Employment almost always comes out worst, because the total employer cost carries 36,2 % of employer contributions within it. But in return you are buying sick pay, maternity benefits, unemployment benefits, paid leave and severance pay – and none of that comes free to a sole trader or a shareholder.

Why three identical amounts turn out so differently

Each of the three forms has a different number of points where something is deducted from the money. It is not about the size of a single rate, but about how many times, and on what, the deduction is calculated.

Sole trader: contributions once, tax once

  • Expenses. Either the 60 % flat rate on income (capped at 20 000 € a year), or actual expenses based on receipts.
  • Assessment base. Income minus expenses, divided by the coefficient 1,486 and by twelve. Under the law, contributions paid are first subtracted and then immediately added back, so they cancel out.
  • Contributions. Health insurance 16 % and social insurance 33,15 % of this base, but at least on the minimum, and social insurance at most on the cap.
  • Tax. The tax base is income minus expenses minus contributions paid. The tax-free allowance is deducted, and the rest is taxed.

s. r. o.: tax twice, no contributions

  • Company tax. Profit is taxed at 10 % for revenue up to 100 000 €, and at 21 % above it.
  • Share of profit. When it is paid out to a shareholder, a further 7 % withholding tax is deducted.
  • No contributions. No social or health insurance is paid on a share of profit. That is exactly where the main advantage lies.
  • The catch. A director with no remuneration is not insured anywhere, so they have to pay their own health insurance – 121,92 € a month. And they pay nothing into the Social Insurance Agency, which they will eventually notice in their pension.

Employment: contributions from both sides

  • Total employer cost. The employer pays an extra 36,2 % on top of the gross wage. Out of a total employer cost of 3 000 €, the gross wage is only 2 202,64 €.
  • Employee contributions. A further 14,4 % of the gross wage.
  • Tax. Progressive brackets of 19 %, 25 %, 30 % and 35 %. The 15 % rate that a sole trader gets does not exist here.

Example: 30 000 € a year

  • Sole trader with flat-rate expenses – contributions 5 100,36 €, tax 139,94 €, you keep 24 759,70 €
  • s. r. o. – company tax 3 000 €, withholding tax 1 890 €, transaction tax 40 €, director's health insurance 1 463,04 €, you keep 23 606,96 €
  • Employment – gross wage 1 835,54 € a month, you keep 16 405,93 €
There are two turning points, not one. Up to around 22 000 € a year in income, an s. r. o. comes out better: a sole trader pays the minimum contributions of 5 100,36 € a year even when they earn little. Between 22 000 and 41 000 €, sole trader status leads, because the 60 % flat rate cuts the tax base effectively and the tax rate is only 15 %. Above 41 000 €, the flat rate is capped at 20 000 €, contributions grow on the whole remainder – and an s. r. o., which does not pay social insurance contributions at all, pulls permanently ahead. At low income, though, the company's advantage is only apparent: it means zero social insurance, so no sick pay and no year counted towards a pension.

Rates and amounts valid in 2026

The calculator above uses exactly these figures. 2026 brought three changes at once: higher health insurance, higher minimum contributions for sole traders, and two new tax brackets.

Sole trader (SZČO) contributions from 1 January 2026.
ItemHealth insuranceSocial insurance
Rate16 %33,15 %
Minimum assessment base762,00 €914,40 €
Minimum per month121,92 €303,11 €
Maximum assessment basenot set16 764,00 €
Maximum per monthno upper limit5 557,26 €
Personal income tax in 2026. A sole trader with income up to 100 000 € taxes the entire tax base at a rate of 15 %; above this threshold, tax brackets apply.
Annual tax baseTax rate
up to 43 983,32 €19 %
43 983,32 – 60 349,21 €25 %
60 349,21 – 75 010,32 €30 %
above 75 010,32 €35 %
Taxes paid by an s. r. o. The income tax rate is set according to the amount of taxable income, but it is calculated on the tax base.
Company's taxable incomeIncome taxMinimum tax
up to 50 000 €10 %340 €
50 000 – 100 000 €10 %960 €
100 000 – 250 000 €21 %960 €
250 000 – 500 000 €21 %1 920 €
500 000 – 5 000 000 €21 %3 840 €
above 5 000 000 €24 %11 520 €
Other figures the calculation is based on.
ItemAmount for 2026
Flat-rate expenses60 % of income, capped at 20 000 € a year
Coefficient for the sole trader's (SZČO) assessment base1,486
Tax-free portion of the tax base5 966,73 € a year
Tax base from which the tax-free allowance starts to be reduced26 083,13 €
Tax base at which the tax-free allowance disappears43 983,33 €
Withholding tax on the share of profit7 %
Financial transaction tax0,4 %, capped at 40 € per transaction
Employee contributions14,4 % of the gross wage
Employer contributions36,2 % on top of the gross wage
Maximum assessment base for social insurance16 764 € a month
Subsistence minimum284,13 € a month

The first year as a sole trader is different from every year after it

At the start, sole trader status looks far more favourable than it actually turns out to be. That is because of the deferral of social insurance – and that deferral ends at some point.

When you start paying

  • Health insurance right away. From the first day of business activity, regardless of how much you earn. At least 121,92 € a month.
  • Social insurance only later, and at the minimum. It starts on the first day of the sixth calendar month after the month in which you received your trade licence – if you start in March, you first pay for September. And it is the minimum, because the tax return from which the assessment base would be determined does not exist yet.
  • No waiting. If you closed the same trade licence less than five years ago, social insurance starts right away.

New lower contributions for low incomes

From 1 July 2026, a special assessment base of 396,24 € is introduced for sole traders with annual income up to 9 144 € and for those who have just started out. Social insurance contributions based on it come to 131,34 € a month instead of 303,11 €.

The calculator above works with the standard minimum, so at very low income it shows a slightly worse result than what will actually apply in the second half of 2026.

The deferral is not a discount. A first year without social insurance also means a first year without sick pay and without a period counted towards your pension. When contributions kick in at the full rate in the second year, it catches many people off guard – in the meantime, they have spent money based on a figure that only applied once.

Switching from being a sole trader to employment?

Then you need the calculation the other way round: how much to ask for in gross terms so that what lands in your account is what you are used to. Enter the net amount, and the calculator will work out the gross wage, the total employer cost, and what daily rate it would correspond to.

How much you want in your account

2026 has 250 working days – 261 weekdays minus the eleven public holidays that fall on them. The default of 225 is what is left after five weeks for holiday and sickness, which a self-employed person is not paid for.

What to ask for

Gross wage per month
Total employer cost per month
Corresponds to a daily rate of

The daily rate is derived from the total employer cost, not the gross wage – that is the amount the employer actually spends on you, and what they would otherwise pay on an invoice.

Detailed calculation of net pay

What the calculator deliberately does not include

To keep the numbers comparable, it sticks to a model case. These are things that can shift your result – and you should know about them when deciding.

For an s. r. o.

  • Cost of running the company. Double-entry bookkeeping, financial statements, register filings. Typically a few hundred euro a year more than a sole trader business.
  • Further transaction tax. The calculator applies the 0,4 % only to the payout of the profit share. The company pays it on every outgoing payment to suppliers, always capped at 40 € per payment.
  • Director's remuneration or a wage. If you also pay yourself a wage from your company, the whole calculation changes – part of the money goes through contributions, but it reduces the company's tax base.
  • The money is not yours right away. A share of profit can only be paid out after the financial statements are approved, which is usually the following year.

For sole trader and employment

  • Child tax bonus. Both an employee and a sole trader receive it, and it shifts the result in their favour.
  • VAT. We work with amounts excluding value added tax. For a VAT payer, it is a pass-through amount and has no effect on the result.
  • Combining with employment. A sole trader who is also employed pays health insurance differently, and their result will be different.
  • State-insured person. A student, pensioner or parent on parental leave has different minimums and different obligations.
FAQ

Frequently asked questions about choosing a business form

Can I keep doing the same work for my employer on an invoice?

No. If the work has the features of dependent work – you do it personally, following instructions, in the employer's name and subordinate to them – the law does not allow it to be performed on an invoice. This follows from § 1 ods. 3 of the Labour Code, and it cannot be got around by agreement between both parties, because an inspection assesses the actual state of affairs, not the text of the contract. The company risks a fine of 4 000 to 200 000 € and an entry in the public register kept by the National Labour Inspectorate for five years. The tax office can reclassify the income as income from dependent activity and additionally assess tax. And the Social Insurance Agency can assess the contributions retroactively – if the person was not registered at all, under § 147 of the Act on Social Insurance this right never becomes time-barred, plus a penalty of 0,05 % of the amount owed for each day of delay. The calculator above makes sense when you are genuinely building your own business with several clients.

From what amount does it pay to switch from sole trader to s. r. o.?

With flat-rate expenses and no other income, the threshold is around 41 000 € in annual income. Below that, sole trader status is more favourable: the 60 % flat rate reduces the tax base, and the rest is taxed at only 15 %. Above that amount, the flat rate is capped at 20 000 € and contributions grow on the entire remainder, while an s. r. o. does not pay social insurance contributions at all. Work out the exact threshold in the calculator above – it depends on what your real expenses are.

Why did employment come out so badly?

Because the comparison uses the total employer cost, not the gross wage. On top of the gross wage, the employer pays a further 36,2 % in contributions, so substantially less of the same amount reaches the employee. At the same time, though, they are buying sick pay, maternity benefits, unemployment benefits, paid leave, severance pay and a higher pension. So the difference is not a pure loss – it is the price of security.

Do you pay health insurance on a share of profit?

No. On profit earned for 2017 and later, no health insurance contributions are paid on a share of profit, and social insurance contributions were never paid on it. It is taxed only with a 7 % withholding tax. The exception is a profit share paid to an employee who holds no ownership stake in the company – that is treated as a wage, with all contributions.

Does a company director with no salary have to pay contributions?

No social insurance. Health insurance, yes – if there is no other payer of the contributions, they become a self-payer and pay at least 121,92 € a month. They pay nothing if they are also employed elsewhere, are a sole trader, or are a state-insured person, for example a student, a pensioner, a registered jobseeker or a parent on parental leave. The calculator works with the worse-case scenario, where there is no other payer.

What about the financial transaction tax in 2026?

Since 1 January 2026, only legal entities pay it. Sole traders and other individuals – entrepreneurs are exempt from it, and it never applied to individuals who are not in business, so an employee never paid it out of their wage. The rate is 0,4 % of the amount debited, capped at 40 € per transaction, 0,8 % with no cap on cash withdrawals, and 2 € a year for each payment card used.

What is the 1,486 coefficient, and why is it needed at all?

It converts between a sole trader's profit and an employee's wage. An employee's contributions are calculated from the gross wage, meaning a figure that does not yet include the employer's contributions. A sole trader has no gross wage at all – only profit. Dividing the profit by 1,486 converts it into a figure that is comparable to a gross wage. Without this, a sole trader would pay contributions on a substantially higher base than an employee with the same income.

Why does the monthly amount come out a few cents different from the payroll calculator?

This page calculates the whole year at once, the same way a tax return is filed. The payroll calculator works out one month at a time and rounds the tax advance payment to whole cents separately each month – twelve times a year. The difference is on the order of a few tens of cents a year, and it evens out in the annual tax reconciliation.

Can you have a sole trader business and an s. r. o. at the same time?

Yes, and it is not unusual. The combination has its own rules, though: income is assessed separately, but the minimum contributions are paid only once, and if you invoice your own company from your sole trader business, it has to hold up at an inspection as a normal market price. Before you set it up, it is worth going through it with an accountant – get in touch with us.

We will work it out using your real numbers

The calculator works with a model case. We will look at what you actually invoice, what expenses you have, whether you have children, and whether you are employed elsewhere – and tell you which form is cheaper for you, and by how much.

I want a calculation tailored to me