Home Office: Remote Work Agreement and Cost Compensation

Home office is one of the most popular employee benefits. It allows employees greater flexibility in managing their time, helping them better balance their personal and professional lives. However, employers must not forget that when providing this 'benefit', the law imposes certain obligations on them.

I. Work on 'home office' can only be performed based on a written agreement

The Labor Code does not specify the exact requirements that the agreement must contain, but it is advisable to include the following: the place of work, conditions regarding the distribution of working hours, remuneration and compensation of employee costs, delegation of work and control of task fulfillment, use of work equipment, or the method of ensuring occupational safety and health (OSH).

Remote work does not necessarily have to be performed only from the employee's residence, which can have unexpected consequences for the employer if the employee, for example, performs remote work from abroad (such as the now very popular work from Bali). Also, for OSH reasons, it is advisable to specify in more detail where the employee will perform the remote work.

II. Three options for cost compensation associated with remote work

There are 3 ways to approach cost compensation:

1. proving the employee's actual costs,

2. flat-rate compensation for each started hour of work, or

3. without providing compensation.

The first option is administratively quite demanding and is not widely used in practice. The minimum amount of flat-rate compensation (point 2) is set by the Ministry of Labor and Social Affairs (MPSV) by decree (in 2026, the compensation was CZK 4.70 per each started hour). If the employer pays compensation of this amount, it is not subject to tax on the employee's side; if a higher compensation is provided, the amount above this limit will be considered taxable income of the employee. The third option is for the employer and employee to enter into a written agreement that no compensation is due for remote work.

Are you wondering if it is 'worth it' for the employer to provide compensation for HO? Here is an example: An employee works on HO 2 days a week, i.e., 16 hours a week, averaging 64 hours a month. The monthly compensation is thus CZK 300. Is it worth calculating the exact number of hours every month and adding it to the wages?

In case of any questions, please do not hesitate to contact us.

Your TaxVision Team