Nearly half of all companies in Czechia to gift employees end-of-year bonuses

A report by the Czech Chamber of Commerce (HK) finds that four out of 10 companies in Czechia’s private sector will pay their employees a “13th salary” – that is, a special one-off bonus or reward payment – at the end of this year. Payments most often range between CZK 22,000 and CZK 46,000.

The survey revealed that a similar or slightly higher number of companies compared to last year are set to provide their employees with extra year-end remuneration. Almost 70 percent of large companies and 43 percent of medium-sized firms plan to financially reward employees at the end of 2023.

Czech Chamber of Commerce President Zdeněk Zajíček said that amid cost-of-living increases, employers have implemented various strategies to support their workforce, including consistent salary increments and additional contributions, either as one-time or recurrent supplements. This is to remedy the effects of high inflation seen this year, which has averaged over 10 percent.

The objective remains clear for businesses – retaining skilled employees is vital to industries facing a scarcity in the labor market.

While disbursements vary, sectors like construction and manufacturing are poised to offer more substantial rewards compared to industries focused on business-to-business and personal services.

The Chamber calculates the average national wage for this year, with bonuses added in, at about 43,600 gross. It also predicts the average wage – excluding bonuses – nationwide to reach CZK 46,700 next year.

However, the report also highlights a significant challenge – the Czech Republic's entanglement in a "middle-income trap" (a scenario where a country reaches a moderate level of economic development but struggles to advance further to higher-income status). Escaping this will necessitate a transformative phase for the economy, pivoting towards higher value-added production. 

The country's current economic structure, lagging behind in generating added value (the process of increasing the worth of a product or service through various stages of production), places it in 24th position out of 27 EU countries in the 2023 Prosperity Index.