[Czech Republic] Parental allowance, parental leave, and payroll

The terms “parental allowance” and “parental leave” are often confused among employees. Some employees even think they are the same thing, with the result that they do not distinguish between these two concepts at all and automatically apply the rules for one to the other. Let’s explain the basic differences, especially from the payroll accountant’s point of view.

Parental allowance

Parental allowance is a state social support benefit. It is a benefit paid by the government to one of the parents of the youngest child after the payment of maternity allowance (which is a sickness insurance benefit) has been terminated. The total amount of the benefit is CZK 300,000 (CZK 450, 000 if there are multiple children) and is paid on a monthly basis until the child is 4 years old. However, the parental allowance may be terminated earlier if the amount of CZK 300,000 is already spent. It therefore depends on the monthly amount chosen by the parent.

Parental leave

Parental leave, on the other hand, is one of the obstacles to work on the employee’s side that is regulated by the Labour Code. Although the names are similar, it is clear from the definitions given that these two concepts are something quite different. Parental leave is time off work, parental allowance is a state social support benefit. The only thing they have in common is that they will often be time-related, although it should be stressed that this is not always the case.

While an employee can apply for parental leave for any length of time, up to a maximum of 3 years of child’s age, parental allowance can be taken up to the age of 4. This is probably the most common misconception, where many parents think that they are entitled to time off work until their child reaches their 4^th birthday, because after all, they are drawing parental allowance until that age. However, the opposite is true. Parental allowance has nothing to do with the length of parental leave. The maximum length of parental leave is set by the Labour Code and cannot be extended in any way. It ends automatically when the child reaches the age of 3 (if the employee didn’t return to work earlier).

If a parent wants to be released from work after that date, he or she would have to agree with the employer on unpaid leave. However, unlike parental leave, unpaid leave must be agreed by the employer.

Another difference is that parental allowance can only be taken by one parent at a time, whereas parental leave can be taken by both parents at the same time. In this case, however, they must consider that the only income they will receive will be the parental allowance for one of them.