Monday, 7 September 2026
The Czech Republic’s minimum wage remained insufficient to cover basic living expenses and rental housing costs in 2025, highlighting a continuing affordability gap even as earnings at the bottom of the labour market increased. Research by the Research Institute for Labour and Social Affairs (RILSA) found that a worker receiving the minimum wage would have needed approximately 7% to 24% more net income to meet the benchmark cost of essential expenses and rental housing in full, depending on the size of the municipality. This represented a monthly shortfall of roughly CZK 1,250 to CZK 4,280.
The gross minimum wage stood at CZK 20,800 per month in 2025, corresponding to approximately 42.2% of the average gross wage. After tax and deductions, the monthly amount was around CZK 17,837. Although its purchasing power improved compared with the previous assessment, RILSA concluded that the lowest statutory wage remained insufficient under several measures, particularly once housing expenditure was included.
The findings are significant for the Czech residential market because they demonstrate that the affordability problem extends beyond the cost of buying a home. For workers at the bottom of the income distribution, conventional rental housing can itself require a level of expenditure that is difficult to reconcile with other essential household costs.
There has nevertheless been measurable improvement. RILSA’s assessment indicates that minimum earnings have strengthened relative to several benchmarks, while the gap between the statutory minimum and average earnings has narrowed. The researchers caution, however, that the improvement should not be interpreted entirely as evidence of better housing affordability or living standards, as changes to the subsistence benchmark and the treatment of normative housing costs also influenced the comparison.
The minimum wage increased again to CZK 22,400 per month at the beginning of 2026, representing 43.4% of the forecast average wage. The Czech system now uses an automatic mechanism linking future increases to expected average earnings, with the ratio scheduled to move progressively towards 47% by 2029.
A further increase is expected for 2027, when the minimum wage is set to rise to approximately CZK 24,900 per month, equivalent to around 44.6% of the average wage. The gradual increases are intended to make the development of minimum earnings more predictable while reducing the gap between workers receiving the statutory minimum and the broader labour market.
RILSA’s assessment also shows that the net minimum wage reached 46.1% of the net average wage in 2025, its highest proportion recorded so far. Since 2016, minimum earnings have generally risen faster than average and median wages, with 2021 being an exception. Minimum-wage growth also exceeded inflation in 2025.
The wider labour-market implications are important for employers as well as employees. The Czech Republic continues to have a relatively high proportion of low-paid workers compared with the OECD average, with women particularly represented in this part of the labour market. Further increases will therefore have consequences for labour costs in industries that depend heavily on lower-paid employment.
For the property sector, however, the central issue is the relationship between earnings and housing expenditure. Higher wages can improve affordability, but their effect will remain limited if rents and other household costs rise at a similar or faster rate. This is particularly relevant for lower-income households dependent on the rental sector and for locations where competition for available homes remains strong.
The latest findings consequently expose two connected parts of the Czech affordability challenge. Wage policy can progressively increase the resources available to lower-paid households, but it cannot independently reduce the cost or increase the availability of rental housing. Closing the remaining affordability gap will depend not only on future earnings growth, but also on how much housing is delivered, where it is built and what proportion remains financially accessible to workers on lower incomes.
Source: CTK
