Minimum Wage 2027: Estimated Amount and Impact on Businesses

The minimum wage is no longer set by a last-minute political decision, but by a predictable formula that allows payroll costs to be planned a year in advance. For 2027, both the proposed coefficient and the average wage prediction are already on the table, so you can calculate the minimum wage to within a few hundred crowns today. In this article you'll find the current estimate, the deadlines for when the figure becomes official, and above all the specific impact on employers among sole traders and small businesses.

How the minimum wage indexation formula works

Since 2025, an automatic indexation mechanism has applied under Section 111 of the Labour Code. The monthly minimum wage is determined as the product of two figures:

1. The prediction of average gross monthly nominal wages in the national economy for the following year, prepared by the Ministry of Finance and published no later than 31 August.
2. A coefficient, set two years in advance by the government by decree.

The result is rounded up to whole hundreds of crowns. The MPSV then announces the specific figure via notice in the Collection of Laws no later than 30 September of the preceding year. The long-term goal enshrined in the Labour Code is for the minimum wage to reach 47% of the average wage, to be achieved through the gradual increase of the coefficient by 2029.

For 2025 and 2026, a coefficient of 0.434 applied under Government Decree No. 285/2024 Coll. For 2027 and 2028, the MPSV has proposed coefficients of 0.446 and 0.458, i.e. 44.6% and 45.8% of the predicted average wage.

How much will the minimum wage be in 2027

If the proposal goes through and the August prediction from the Ministry of Finance doesn't change significantly, the minimum wage will rise from this year's 22,400 CZK to approximately 24,900 CZK, an increase of 2,500 CZK. This would be the highest year-on-year increase in crown terms in history. The hourly rate is derived by law from the monthly amount; at the estimate of 24,900 CZK it would come out to approximately 149.40 CZK.

The estimate for 2028 is based on the same macroeconomic prediction and is therefore even more indicative, but the principle of two coefficients known in advance gives businesses the ability to plan payroll budgets two years ahead.

Impact on employee health insurance

The minimum wage is also the minimum assessment base for employee health insurance. The 13.5% premium is therefore always paid on at least the minimum wage amount, even if actual income is lower (details are described by VZP in its section for payers).

A higher minimum wage will also shift other related figures. For example, entitlement to the annual child tax bonus applies only to a taxpayer with income of at least six times the minimum wage; at the estimate of 24,900 CZK, the 2027 threshold would be roughly 149,400 CZK annually.

Note: OSVC minimum advance payments follow a different figure

A common mistake: the minimum advance payments for self-employed persons (OSVC) for social and health insurance are not tied to the minimum wage, but to the average wage set for insurance purposes, which the government announces separately by decree in the autumn. The rise of the minimum wage to 24,900 CZK does not, by itself, change OSVC advance payments.

However, because both figures derive from the development of the average wage in the economy, OSVC minimum advance payments will also rise in 2027. For social insurance, the gradual increase in the minimum assessment base for the main activity introduced by the consolidation package also continues. Specific advance payment amounts for 2027 will be known once the autumn government decree is announced; current figures for this year can be found in our overview of OSVC minimum advance payments 2026.

Guaranteed wages no longer apply to private companies

It's worth recalling that alongside the introduction of the indexation mechanism, guaranteed wages for the business sector were abolished as of 1 January 2025. A private employer therefore now only has to observe a single wage floor: the minimum wage. Minimum pay levels by job category remain only in the public sector as guaranteed pay in four bands ranging from 1x to 1.6x the minimum wage. A higher minimum wage in 2027 will therefore automatically raise the pay floors in the public sector as well.

What this means in practice for small employers

According to the background materials for the proposed decree, employer costs in the business sector are estimated to rise by 5.9 billion CZK in 2027. At the level of a single employee on minimum wage, this means a noticeable increase in total payroll cost: add 24.8% social insurance and 9% health insurance for the employer on top of the gross wage.

Conclusion

The minimum wage for 2027 has not yet been officially announced, but thanks to the indexation formula we can already predict its level with high confidence: the proposed coefficient of 0.446 and the average wage prediction of 55,795 CZK give an estimate of 24,900 CZK monthly. The MPSV will announce the final figure no later than 30 September 2026. For small employers, this means a record jump in payroll costs, higher minimum health insurance premiums, and pressure on wages just above the minimum, so it pays to factor in the new figures already in this year's planning.

Whether you employ others or run your business alone, good decision-making is built on clear numbers about your own income and expenses.