Average Czech salary up 11.3% year-on-year to 38,275 crowns monthly

The average salary in the Czech Republic has soared by 11.3% year-on-year in the second quarter of 2021, rising by nearly 4,000 crowns to reach 38,275 crowns per month, according to data released by the Czech Statistical Office. In mid-2020, the average salary in the Czech Republic was 34,384 crowns per month.

Adjusting for inflation and the rising prices of consumer goods, salaries have risen by about 8.2% in real terms.

The sharp rise in salaries has effectively compensated for negative effects from the Covid-19 pandemic in 2020. At the end of the first half of last year, wages were down slightly from 2019; this year, they have risen at nearly double the rate of previous years of steady growth.

According to experts, the rise in salaries is due to pandemic-related effects including artificially-low average salaries resulting from unclear market conditions in mid-2020.

"The growth of the average wage by 11.3 percent is significantly affected by last year's low base, when wages fell sharply in some sectors due to the onset of the coronavirus crisis," says the Czech Statistical Office's Dalibor Holý.

Because of unequal wage distribution, only about one-third of employees in the Czech Republic reach the average national salary. The median salary, the amount earned by the average employee in the Czech Republic at the center of the wage distribution, has also risen sharply in the first half of 2021 and is now up to 32,408 crowns per month.

The median salary for men in the Czech Republic is 34,461 crowns per month, and for women 30,026 crowns per month.

According to financial experts, the sharp rise in wages indicates that the Czech Republic is quickly recovering from pandemic-related effects. Wages are expected to steadily increase, if not at the same rate, due to a record-low unemployment rate and strong competition on the local labor market.

"Although the current result is skewed by last year's economic downturn and exceptional pandemic-related factors, such as the payment bonuses to health care workers, this is a solid pace pointing to a revitalizing domestic labor market," states Raiffeisenbank analyst David Vagenknecht. 

Though wages in the Czech capital rose at the lowest rate in the second half of 2021, the average salary in Prague remains the highest in the Czech Republic at 46,163 crowns per month. The Central Bohemian follows with an average salary of 39,832 crowns per month.

The lowest average salary in the Czech Republic was reported in the Karlovy Vary region, at 33,636 crowns per month, followed closely by the Zlín region at 33,856 crowns per month.

Going into 2022, an expected increase in the Czech minimum wage would also drive the average national salary higher. Labor Minister Jana Maláčová stated at the end of last week that she would like to raise the minimum wage from 15,200 to 18,000 crowns, an increase that would effect an estimated two million employees.