Tax Records or Flat-Rate Tax 2026 - Which to Choose (Decision Guide)

TL;DR - Decision Matrix

Criterion	Tax records (actual expenses)	Flat-rate expenses	Flat-rate tax
Admin workload	High (income/expense ledger)	Low (income records only)	Minimal (none)
Best suited for	High actual expenses	Medium-sized expenses	Small expenses, stable turnover
Tax + insurance monthly	Variable (depends on profit)	Variable	Fixed (8,716 / 16,745 / 27,139 Kč)
Can I claim tax credits	Yes (basic allowance, child, mortgage...)	Yes	No (everything is bundled in)
Turnover limit	no limit	no limit (flat-rate % up to a cap)	2 million Kč
VAT payer	Compatible	Compatible	Excluded
Entry	automatic (default)	choice on tax return	by 10 January with the tax office
Exit	anytime (next year's tax return)	anytime	only at year end

3 tax regimes for the self-employed

Czech self-employed people (OSVČ) have 3 options for taxing their profit:

1. Tax records (actual expenses)

You keep a cash ledger (= income and expenses, day by day). Tax is calculated on your actual profit (income minus expenses):

• Tax rate 15% (up to 1.9 million Kč of the super-gross base) / 23% above that
• Social and health insurance calculated separately (advance payments + annual reconciliation)
• Basic taxpayer allowance plus credits for children, spouse, mortgage interest, donations, education
• VAT handled separately (if you are a VAT payer)

Pros: fully tax-optimal if you have large expenses and want to claim tax credits. Cons: the most admin work.

2. Flat-rate expenses (% of income)

Simpler: instead of actual expenses, you deduct a percentage of turnover as notional expenses:

Activity	Expense %	Cap (max)
Trade and craft licences, agriculture	80%	1,600,000 Kč
Free/regulated/licensed trades	60%	1,200,000 Kč
Independent professions (doctor, lawyer, tax adviser)	40%	800,000 Kč
Rental	30%	600,000 Kč

You only keep records of income, not expenses. Then on your tax return you simply state "I am applying the 60% flat rate."

Pros: no need to keep expense receipts, far less admin. Cons: if your actual expenses are higher than the flat rate, you lose out.

3. Flat-rate tax

One monthly payment covers tax plus social and health insurance. Everything else is scrapped:

Band	Turnover	Monthly payment 2026
1	up to 1 million Kč	8,716 Kč
2	up to 1.5 million Kč (flat rate 75/80%)	16,745 Kč
3	up to 2 million Kč (flat rate 60%)	27,139 Kč

Pros: no tax return, no VAT control statement, no calculations, predictable cash flow. Cons: you cannot claim tax credits, VAT payers are excluded, entry only by 10 January.

See the full flat-rate tax guide.

How to decide - 4 questions

Question 1: What percentage of your turnover do your actual expenses represent?

Calculate: last year's actual expenses divided by turnover, times 100.

Actual expenses	Recommendation
0-30%	Flat-rate tax or flat-rate % (a 40-60% flat rate adds more notional expenses than you actually have, lowering your tax)
30-60%	Flat-rate % (if it matches your activity) OR tax records
60-80%	Tax records (your actual expenses will be higher than any flat rate)
80%+	Tax records, and consider whether the business makes sense at all (margin under 20%)

Question 2: Do you want to claim tax credits or deductions?

If you want to claim:

• Child tax credit (15,204 Kč/year)
• Spouse allowance (24,840 Kč/year)
• Mortgage interest deduction (up to 150,000 Kč/year)
• Donations (up to 15% of the tax base)
• Insurance (up to 24,000 Kč/year)
• Education

→ You cannot use flat-rate tax. Choose either tax records or flat-rate expenses.

Question 3: Are you a VAT payer (or planning to become one)?

• VAT payer = you cannot use flat-rate tax (with a minor exception for OSS on digital products sold into the EU)
• VAT payer + tax records = fine
• VAT payer + flat-rate expenses = fine

Question 4: How much time do you want to spend on admin?

Time/month	Recommendation
< 1 hour	Flat-rate tax (you do nothing, just pay)
1-3 hours	Flat-rate expenses (income records + one annual return)
3-10 hours	Tax records + DokladBot (collecting receipts via WhatsApp)
> 10 hours	Tax records + hire an accountant

Concrete examples

Example 1 - Programmer, self-employed, 800,000 Kč/year

• Actual expenses: 50,000 Kč (laptop, software) = 6%
• Free trade licence (60% flat rate, cap 1.2 million Kč, so fully usable)

Tax records:

• Profit: 750,000 Kč
• Tax at 15%: 112,500 minus allowance 30,840 = 81,660 Kč
• Social insurance: ~57,000 Kč
• Health insurance: ~37,000 Kč
• Total: ~175,000 Kč per year

60% flat rate:

• Notional expenses 480,000 Kč
• Tax base: 320,000 Kč
• Tax at 15%: 48,000 minus allowance 30,840 = 17,160 Kč
• Social + health insurance: ~95,000 Kč
• Total: ~112,000 Kč per year (best option)

Flat-rate tax, band 1:

• 8,716 x 12 = 104,592 Kč (even better)

Winner: flat-rate tax, band 1 (savings of 70,000 Kč/year vs. tax records)

Example 2 - Bricklayer, 1,500,000 Kč/year

• Actual expenses: 800,000 Kč (materials, vehicle, tools) = 53%
• Craft trade licence (80% flat rate, cap 1.6 million Kč)

Tax records:

• Profit: 700,000 Kč
• Tax: 105,000 minus 30,840 = 74,160 Kč
• Social + health insurance: ~158,000 Kč
• Total: ~232,000 Kč

80% flat rate:

• Notional expenses 1,200,000 Kč
• Base: 300,000 Kč
• Tax: 45,000 minus 30,840 = 14,160 Kč
• Insurance: ~158,000 Kč
• Total: ~172,000 Kč (best option)

Flat-rate tax, band 2:

• 16,745 x 12 = 200,940 Kč

Winner: 80% flat rate (savings of 30,000 Kč vs. tax records, but 30,000 Kč less than flat-rate tax would cost)

Note: the choice between the 80% flat rate and flat-rate tax band 2 comes down to whether you want to claim tax credits (possible with flat-rate expenses, not with flat-rate tax).

Example 3 - Self-pay doctor, 1,800,000 Kč/year

• Actual expenses: 50,000 Kč = 3%
• Independent profession (40% flat rate, cap 800,000 Kč, so I can apply a maximum of 720,000 out of 1.8 million)

Tax records:

• Profit: 1,750,000 Kč
• Tax: 262,500 minus 30,840 = 231,660 Kč
• Social + health insurance: ~170,000 Kč
• Total: ~402,000 Kč

40% flat rate:

• Notional expenses: capped at 800,000 Kč (not 720,000, because the flat rate is calculated on the first 2 million of turnover)
• Base: 1,000,000 Kč
• Tax: 150,000 minus 30,840 = 119,160 Kč
• Insurance: ~170,000 Kč
• Total: ~290,000 Kč (best option)

Flat-rate tax, band 3:

• 27,139 x 12 = 325,668 Kč

Winner: 40% flat rate (savings of 110,000 Kč vs. tax records, 35,000 Kč less than flat-rate tax band 3).

Decision calculator

DokladBot offers a flat-rate tax calculator so you can work out how much you'd pay under each regime.

Common mistakes when deciding

1. "Flat-rate is always cheaper than tax records" - Not true. If your expenses are higher than the flat-rate percentage, tax records will be more advantageous.
2. "Flat-rate tax means paying nothing" - Not true. The monthly payment of 8,000-27,000 Kč covers both tax and insurance.
3. "If I use flat-rate expenses, I can't claim the child tax credit" - You can. Flat-rate expenses only concern how you calculate expenses, tax credits are claimed separately. Only flat-rate tax excludes credits.
4. "I'll switch regimes during the year" - Not possible. Your choice is binding for the whole tax year.
5. "I'll just keep receipts myself" - you risk penalties from the tax office. Above 500,000 Kč in income, we recommend using DokladBot or hiring an accountant.

Frequently asked questions

Can I combine regimes?

No, one regime per year. But you can change your regime between years (by 10 January of the new year).

What if my spouse uses a different regime?

Spouses are separate self-employed individuals. Each chooses their own regime independently.

I'm newly self-employed, which regime should I start with?

For your first year, we recommend tax records, so you can see the real picture (expenses plus income). After a year you'll have the data to make an informed decision for the following year (switch to flat-rate?).

What if I'm self-employed alongside a regular job?

You can run your self-employment as a "secondary activity" (up to a profit limit of 105,521 Kč/year for 2026, exempt from social/health insurance). You choose your tax regime independently either way.

Where can I find the list of flat-rate percentages for my trade?

Section 7(7) of the Income Tax Act. 80/60/40/30% depending on the type of activity.

Related articles

• Flat-Rate Tax 2026 - Complete Guide
• Flat-Rate Tax Calculator 2026
• Tax Records - Guide for the Self-Employed
• Self-Employed Tax Return 2026 - Guide
• Self-Employed Obligations and Taxes

DokladBot helps you with tax records, automatically categorising expenses, tracking your turnover against the VAT threshold, and generating XML exports for your accountant. Try it free for 7 days.