Study: Czech minimum wage falls short of basic living and rental costs

Czechia’s minimum wage was not enough to cover basic living expenses and rental housing last year, with workers needing as much as 24 percent more to meet those costs, according to a new study by the Research Institute for Labour and Social Affairs (RILSA).

The findings come as the government prepares to approve another increase in the minimum wage. From January, the gross monthly rate is expected to rise from the current CZK 22,400 to CZK 24,900.

Last year, the gross minimum wage stood at CZK 20,800 per month, equivalent to 42.2 percent of the average gross wage. After taxes and deductions, workers took home CZK 17,837.

Researchers from RILSA assessed whether the minimum wage provided enough purchasing power to cover essential expenses, taking into account living costs, housing, overall wage levels, wage growth and labor productivity.

When standard housing costs used to calculate state benefits were included, the net minimum wage was insufficient to cover both basic living expenses and rent.

Depending on the size of the municipality where a worker lived, the net wage would have needed to be between 7 and 24 percent higher to fully cover those expenses. That translates to an additional CZK 1,250 to CZK 4,280 per month.

The researchers described the overall picture as mixed. The minimum wage has improved relative to the official subsistence minimum and has been gradually moving closer to the government’s target of 47 percent of the average wage.

But it remains below what researchers consider adequate when housing and other living expenses are taken into account. It also falls short of benchmarks in an EU directive, which recommends assessing minimum wages against reference levels of 60 percent of the median gross wage or 50 percent of the average gross wage.

Low wages are particularly common among women in Czechia, according to the analysis. The country has long recorded a higher share of low-paid workers than the OECD average.

The situation has nevertheless improved in recent years. With the exception of the pandemic year of 2021, the minimum wage grew faster than both average and median wages between 2016 and 2025. Last year, it also rose faster than consumer prices.

Researchers said Czechia’s automatic mechanism for increasing the minimum wage is working and noted that previous increases had not led to higher unemployment. They also found that the minimum wage continues to lag behind labor productivity, leaving “some room” for further increases.

This year’s minimum wage of CZK 22,400 represents 43.4 percent of the average wage. Under the government’s plan, that share will gradually rise to 47 percent by 2029.

The government is expected Monday to approve the calculation for the next two years. The first step would raise the minimum wage to CZK 24,900 a month from January, equivalent to 44.6 percent of the average wage.

Among the 22 EU countries with a statutory minimum wage, Czechia currently ranks 17th in nominal terms.