Aspects affecting the price of labour in relation to cost of companies

The key competitive advantage of companies is human capital. It is one of the important factors affecting the performance of the company and its impact as a result of the information explosion continues to grow.

Despite the range of established legislative changes the fact is that the Czech Republic constantly belongs to the countries with high labour price and it is one from basic factors that negatively influences effectiveness and flexibility of labour market with possible impact on decreasing rate of economic growth. This fact serves in argumentation of European Commission even OECD as a convincing argument at characteristic of reasons and sources of country economic problems. Whole situation is complicated not only with high labour taxation but also with demotivating system of social benefits.

Comparing of the labour price in Czech Republic with the EU countries average and also OECD is interesting, as the share of individual income tax is small and it has also a relatively small influence on “the tax price” of the labour force. However, the insurance rate of the social insurance is seen more sharply in it. High obligatory tax payments mainly on the side of employers concurrently increase costs of firms and decrease the attraction of corporate environment. High labour price leads simultaneously to illegal forms of labour relations.

The aim of this article is to refer to high labour price, complicated personal tax structure and amount of social and health insurance. To meet the targets will be used widely used scientific methods, analytical, mathematical and statistical methods and appropriate measure for comparison of effective taxation seems implicit/effective tax rate.  It takes into consideration not only height of statutory tax rates from incomes, amount of social and health insurance but also construction of tax base.

According to the character of input data it is distinguished so called micro approach and macro approach. The macro approach uses aggregate macro economic data included in national accountancy of single states for the calculation of the taxation rate. In this contribution it will be used so called micro approaches that enable to quantify labour price.  Simultaneously it is absolutely respected legislative regulation in chosen periods.