Millions of Czech workers narrowly avoided losing their valued employee benefits thanks to a timely legislative correction. Lawmakers on Wednesday amended a problematic bill that would have effectively eliminated tax exemptions for popular perks like sports allowances, cultural vouchers, vacation contributions, and healthcare supplements starting January.

The original proposal, approved in May, threatened to end these benefits due to the governing coalition’s concerns about tax optimization abuse. Fortunately, the Senate returned the bill to Parliament, giving legislators a chance to reconsider their approach.

At issue was a problematic clause requiring that tax-exempt benefits must have “no connection to work performance” – an impossible standard since all employee benefits inherently relate to employment. This clause has now been removed, preserving the tax advantages that make these programs viable for employers.

According to HR experts, employee benefits are highly valued in the Czech workforce. Approximately one-third of employees currently receive some form of benefits, with most others expressing interest in such programs. The most common perks include meal vouchers, additional vacation days, sick days, and contributions toward sports, culture, education, and insurance plans. There’s also growing interest in flexible working hours and remote work opportunities.

While the tax exemption for benefits remains intact, lawmakers did introduce a new annual cap. Benefits will now be tax-advantaged up to half the average wage from the previous period, which currently amounts to approximately 23,000 Czech crowns per employee.