Minimum Hourly Wage 2025: Everything You Need to Know

This article about Minimum Hourly Wage applies only to the Czech Republic.

Minimum wage – two words that resonate in the minds of employees, employers, HR specialists and economists. For some, it is the hope for a decent income, for others, a factor that can fundamentally affect business. What will the minimum hourly wage be in 2025? And what does it mean for everyday life? Dive into the world of numbers, legislation and practical impacts with us.

What is the minimum hourly wage? And why should we care?

Simply put, the minimum wage is the lowest possible amount that an employer must pay for work performed. This applies to all employees, whether it is a main employment relationship or a temporary contract under a work agreement (DPP) or a work activity agreement (DPČ). Moreover, the minimum wage for temporary workers on DDP, DPČ and workers on a main employment relationship is the same. An employee is entitled to the minimum wage in each employment relationship separately, regardless of whether they have a fixed-term contract, an indefinite contract, or even multiple work commitments at the same time. In addition, if a collective agreement is negotiated at the workplace, it is possible to negotiate a minimum wage higher than that set by law. In other words, the minimum wage is the basis, but collective bargaining can mean more pleasant numbers on the paycheck. It’s simple – the minimum wage protects employees and ensures that everyone receives a fair minimum for their work.

History of the Minimum Wage: How Did We Get to Where We Are Today?

The concept of the minimum wage originated in the late 19th century with the aim of ensuring fair compensation for workers. The first pioneer was New Zealand, which introduced the minimum wage in 1894. In the USA, this principle was enshrined in the Fair Labor Standards Act of 1938, which set the first federal minimum wage. In Europe, the minimum wage began to appear after World War II as a way to protect employees from poverty and exploitation. In the Czech Republic, the minimum wage was introduced in 1991 and was then 2,000 CZK per month. Since then, it has been constantly increasing and has undergone a number of adjustments to keep pace with economic developments.

Minimum Hourly Wage 2025: How Much Will It Be?

The minimum wage is not set randomly. On the contrary, it is based on a prediction of the average gross wage, which is prepared annually by the Ministry of Finance. The Ministry of Labor and Social Affairs will then announce the final minimum wage for the next year. For example, for 2025, the average wage is predicted to be 49,233 CZK. This amount is then multiplied by a coefficient approved by the government (for 2025 it is 0.422) and the resulting monthly minimum wage is in the world.

We then get the minimum hourly wage quite simply, i.e. by dividing the monthly minimum wage by the average number of working hours per month. Public holidays and days off do not play a role in this number.

The minimum hourly wage increases every year. In 2023, the minimum hourly wage was 103.80 CZK. For 2024, it was set at 118.13 CZK. How much is the minimum hourly wage in 2025? CZK 124.40 per hour, which is equivalent to CZK 20,800 per month with a 40-hour working week. The plan is to gradually increase the ratio between the minimum and average wage to 47% by 2029. For 2025, it will be about 42.2%, and for 2026, it will be 43.4%. Increasing the minimum wage aims to improve the standard of living of employees, respond to the rising costs of housing, food and other basic needs, and, last but not least, prevent the deepening of income inequality.

International Perspective: How is the Rest of the World?

Minimum wages vary significantly around the world, depending on the economic situation of individual countries. Some countries do not have a national minimum wage. Luxembourg is often cited as the country with the highest minimum wage in the world. At the opposite end of the spectrum is Burundi, where the minimum wage is set at only about 70 cents per hour.

But let’s move a little closer to our borders. For example, in Germany, the minimum hourly wage was set at €12.41 in 2024, which, if you work full-time, is approximately €2,085 per month, or more than 50 thousand crowns. Another of our neighbors, Austria, does not have a national minimum wage. Wage conditions are determined here through collective agreements in individual sectors. In Slovakia, the minimum wage was set at €750 per month in 2024, and is planned to be increased to €816 in 2025, which at an exchange rate of CZK 25 per euro is almost the same as in the Czech Republic, i.e. CZK 20,400.

Pros and cons of increasing the minimum wage: Does it have a downside?

Giving people more money on their paychecks sounds like a great thing, but everything has a flip side. Business owners, especially smaller ones, can get into trouble by increasing the minimum wage. More money for employees means more expenses for the company. The solution is often to make goods or services more expensive, which can lead to an inflationary spiral. Although the nominal wage increases, the real wage remains the same or even lower. Another risk is a decrease in employment. Employers who are unable to absorb higher costs may reduce jobs. Increasing labor costs can motivate employers to use technology and automation more. A prime example is the massive expansion of self-service checkouts or the abolition of counters at train stations or post offices.

Raising the minimum wage is therefore not only an economic but also a political issue. Some see the minimum wage as a tool to improve the lives of workers. Others, on the other hand, warn that excessively high rates can damage the economy. In general, however, it can be said that raising the minimum wage can mean a better standard of living for working people and thus a greater motivation to work compared to receiving support from the state.

How can a company or HR professional prepare for a minimum wage increase?

Map out the current situation and prepare a budget. Review your employees’ payroll records and find out who will be most affected by the changes. Adjust your financial plans so that you can smoothly absorb the minimum wage increase. Digitalizing HR processes, for example using tools like Sloneek, will help you effectively plan and record wage changes. Be open and transparent. Inform employees about the changes and show that you care about them.

The minimum hourly wage is not just a number – it is an indicator of economic stability, quality of life and the relationship between employers and employees. It can provide employees with a more dignified income. For some employers, it can be a challenge to effectively manage costs. For HR professionals, it is an opportunity to show that they can find solutions even in difficult conditions. With Sloneek, this search will be a little easier.

Tip for HR:

If you are increasing wages, combine it with better communication about company benefits. Make your employees feel that you value their work not only financially, but also in other ways!