MultiSport no more? Czech companies to slash benefits due to austerity package

According to the Czech Chamber of Commerce (HK), 40 percent of companies plan to reduce staff benefits due to the now-approved government consolidation package that shakes up employee allowances in the labor market.

President Petr Pavel signed the reform Wednesday, which means that from January 2024 some employee benefits will no longer be tax-free or subsidized by the state. The government plans to cap how much people can save on taxes from certain work benefits.

This limit will affect things like health vouchers, support for cultural or sports activities, language classes, and some book benefits. The reform also puts a ceiling on tax-free contributions from employers for recreational benefits, now allowing up to CZK 20,000 per year.

HK data finds that hundreds of companies will end benefits such as the Cafeteria card, MultiSport card, or the Flexi Pass. Many firms will also end financial contributions for milestones like anniversaries, retirement, weddings, and programs for educational development.

Despite the impending rise in costs for companies due to the revised taxation system, half of the surveyed companies plan to maintain current benefit levels. Notably, smaller businesses, particularly micro-firms with fewer than 10 employees, are more likely to cut staff benefits compared to larger firms. Almost one-third of companies employing more than 250 people said they would cut down on employee allowances. 

President of the Trade and Tourism Association Tomáš Prouza acknowledges the government's efforts to address public finance concerns. However, he highlights the crucial role of employee benefits in the labor market's vitality, asserting that benefits, often alongside salaries, contribute significantly to an employer's allure.

An emergent trend in recent years, health-related benefits encompassing preventive check-ups, vaccinations, and psychological support, have also become a popular benefit. Prouza expresses concern that the coming changes might affect employee well-being and increase strain on companies in the long run.