Tax 

The new regulation has increased travel allowances and meal contributions

As of 20 August 2022, the Decree of the Ministry of Industry and Trade No. 237/2022 Coll. became effective, which amends Decree no. 511/2021 Coll., modifying the rate of basic compensation for the use of road motor vehicles and meal allowances and determining the average price of fuel for the purpose of providing travel allowances, as amended.

The effective date may be a surprise to some, as these changes were expected by employers no sooner than in the new calendar year. Nevertheless, pursuant to Section 189 (2) of Act No. 262/2006 Coll., the Labour Code, as amended (hereinafter the “Labour Code”), the Ministry of the Industry and Trade has the right to amend the rate of basic allowance for the use of road motor vehicles, meal allowances or the average price of fuel through the decree once some of these prices increase or decrease by at least 20% from the effective date of the Labour Code or from the effective date of the last amendment included in the decree pursuant to the data of the Czech Statistical Office.

The purpose of this extraordinary decree is that the provided travel allowances correspond to actual prices of fuel and public catering, its effective date was therefore proposed to be the first day after its announcement in the Collection of Laws, also with regard to the possible increased administrative burden on the part of employers.

The original wording of the Decree No. 511/2021 Coll. is available on this website.

What changes do employers have to be prepared for from 20 August 2022?

Price of fuel:

As of the above-mentioned date, the price of 98-octane petrol increases for the purposes of travel allowances. With effect from 1 January 2022, the amount was set to CZK 40.50 /liter and from 20 August 2022, the price shall increase to CZK 51.40 /liter. The price of 95-octane petrol remains at CZK 44.5 /liter, i.e. the price that has been increased as of 14 May 2022; the price of oil remains at CZK 47.10 /liter.

Meal allowances in the Czech Republic:

  • For each calendar day of the business trip, the employee working in the commercial sphere is entitled to a contribution of at least:

– CZK 120 if the business trip lasts between 5 and 12 hours;

– CZK 181 if the business trip lasts longer than 12 hours but does not exceed 18 hours;

– CZK 284 if the business trip exceeds 18 hours.

  • For each calendar day of the business trip, the employee working in the state sphere is entitled to a contribution of:

– CZK 120 – CZK 142 if the business trip lasts between 5 and 12 hours;

– CZK 181 – CZK 219 if the business trip lasts longer than 12 hours but does not exceed 18 hours;

– CZK 284 – CZK 340 if the business trip exceeds 18 hours.

Monetary meal allowance:

In relation to the increase of meal allowances for the state sphere to CZK 142, there is also:

  • An increase in the monetary meal allowance, i.e. in the tax exempt meal contribution the employer can provide to the employee for a single shift in financial form; it now amounts up to CZK 40;
  • An increase in the meal voucher, which is optimal from the tax perspective, and which the employer can provide to its employees in paper or electronic form, to CZK 180 (or CZK 180.73). If the employer decides to provide a meal voucher with a nominal value of CZK 180, they can record up to CZK 99 (or CZK 99.40) in tax expenses upon the fulfilment of other conditions.

We would like to emphasise that these new, higher amounts can be recorded by the employer only as of Saturday, 20 August 2022, however they cannot be, for instance, utilised retroactively as of 1 August 2022.

Do you need help with the correct provision of travel allowances or meal contributions? Do you know when to provide meal contributions and when to provide meal vouchers or monetary meal allowance? Are you aware that you can pay for the employee’s entire nominal value of the meal voucher, which can simplify the provision of meal vouchers to employees in insolvency? Please contact us if you need help, we will be happy to assist you.

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