Discount on income tax for employees with disabilities

Whether you employ employees with disabilities or not, pay attention to the following lines. You may find that you do not make full use of your opportunities – either because you do not apply for this type of tax discount or because you do not employ employees with disabilities at all.

An employer employing a person with a disability or a person with a more severe disability is entitled to a discount on income tax in accordance with Section 35 of the Act No. 586/1992 Coll., on income taxes.

In general, for such an employer, the tax for the relevant tax period is reduced by an amount of up to CZK 18,000 for each employee with a disability and by an amount of up to CZK 60,000 for each employee with a severe disability.

Who is considered a person with a disability?

Which persons fall into one of the two above-mentioned categories of employees can be found in Section 67 paragraph 2 of Act No. 435/2004 Coll., on employment. Persons with disabilities are natural persons who are recognized by the social security authority as disabled in the first or second degree or who are handicapped. Persons with a more severe disability are natural persons who are recognized by the social security authority as disabled in the third degree.

Advantages of a tax discount over state contributions

The advantage of this income tax discount compared to, for example, the state contribution to support the employment of people with disabilities in the sheltered labour market is that for the application of the tax discount it is not necessary for the employer to conclude an agreement with the Labour Office on recognition of the employer as an employer on the sheltered labour market.

Remember that the tax discount must, of course, be properly applied in the tax return for the relevant calendar year. You can find out how it is calculated in Section 35 paragraph 2 of the already mentioned Income Tax Act.