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

A new survey revealed that four out of 10 companies in the private sector will pay out a 13th salary to employees this year.

Expats.cz Staff

Written by Expats.cz Staff Published on 11.12.2023 11:20:00 (updated on 11.12.2023) Reading time: 1 minute

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.

A focus on keeping employees

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.

More economic prosperity needed

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.

FEATURED EMPLOYERS

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.

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