Freelance software development involves more than writing code. You need to describe the work clearly, agree how it will be billed, record payments and handle Czech tax rules when a client or platform is abroad. This guide covers the practical invoicing choices for an IT freelancer registered as an OSVČ, the Czech term for a self-employed person.
Which trade authorisation covers programming?
Ordinary software development and IT consulting commonly fall under the Czech unregulated trade, živnost volná, in field 56: software provision, IT consulting, data processing, hosting and related activities, and web portals. Under Annex 4 of Act No. 455/1991 Coll., this type of trade does not require proof of a specific professional qualification, although the general conditions for running a trade still apply.
For income from a non-craft trade, § 7(7) of the Income Taxes Act provides a 60% expense allowance, capped at CZK 1,200,000 of expenses. That classification follows the actual activity. Copyright licensing or other independent income may fall under different rules; being a programmer does not make every payment eligible for 60%.
Check that your registered fields cover any additional services, such as training. Do not assume that ordinary programming courses require a regulated trade simply because you teach them. Your trade licensing office can confirm the appropriate field.
Describe what you delivered
The invoice should let the customer recognise the service, project and period. It does not need to reproduce technical documentation, but “IT work” alone may be too vague for the customer's approval process.
Development
- “Web application development: user administration module, October 2026.”
- “Backend API development for the online shop, 80 hours.”
- “iOS application development: phase 1, prototype and core functionality.”
- “Frontend development: design implementation and responsive layouts.”
Consulting
- “IT consulting: microservices architecture design.”
- “Code review and application performance optimisation.”
- “Cybersecurity consulting: agreed penetration testing.”
Maintenance and support
- “Web application maintenance: monthly retainer, April 2026.”
- “Technical support and incident resolution: Standard SLA, Q2 2026.”
- “System updates and security patches: quarterly service.”
Save recurring descriptions in Taxorio's price list, then update the period, hours or deliverable for each invoice. Check that the description matches the contract and any accepted timesheet.
Hourly billing or a fixed project price?
Hourly billing
With time-and-materials billing, the invoice lists the hours worked and the agreed rate. This makes changes in scope easier to price, provided the client accepts the work and any budget changes. It does not remove the risk of disputed hours or unpaid invoices.
For example, 82.5 hours × CZK 1,200 = CZK 99,000 before any applicable VAT. Keep a timesheet or other record that explains the hours.
Rates vary with the work, experience, contract length and customer. To show how a price list might be organised, the following ranges are illustrative budgeting examples, not verified 2026 market benchmarks:
| Example experience level | Illustrative hourly range |
|---|---|
| Junior developer, 0–2 years | CZK 500–900 |
| Mid-level developer, 2–5 years | CZK 900–1,500 |
| Senior developer, 5+ years | CZK 1,500–2,500 |
| Specialist in DevOps, security or architecture | CZK 2,000–4,000 |
Agree whether the quoted rate includes VAT. The same headline rate can otherwise mean different amounts to the client and to you.
Fixed-price work
A fixed price gives the customer an agreed cost for a defined result. It can also reward efficient delivery, but an inaccurate estimate reduces your effective hourly earnings. Define the deliverables, acceptance criteria, exclusions and process for charging additional work before starting.
A milestone can appear as one invoice item, for example “Website launch: phase 2 under the agreed specification”. Keep the contract and acceptance record alongside the invoice.
A combined model
You can charge a fixed price for an agreed deliverable and bill subsequent changes or support by the hour. Show the fixed milestone and additional hours separately so the client can see how the total arose.
Working for clients abroad
Foreign-currency invoices
Taxorio supports invoices in CZK, EUR, USD, GBP, CHF and PLN. You can also choose the document language. The language setting translates the invoice's standard labels; it does not translate descriptions you write yourself.
Czech tax records still need CZK values. For a sole trader using cash-based tax records, income and expenses generally follow receipts and payments. Taxorio records a foreign-currency payment using the relevant Czech National Bank (ČNB) rate at payment; if payment is received in CZK, the actual CZK amount matters. VAT uses its own tax-point rules, so the invoice's VAT amount is not recalculated merely because the exchange rate changed before payment.
The jednotný kurz is an annual conversion method available under § 38 to eligible people who do not keep accounts. It is not a rate you choose at the start of the year and freeze yourself. Taxorio uses daily ČNB conversion and does not calculate the annual uniform-rate method. If you use that method for filing, reconcile it separately with your accountant.
VAT on cross-border IT services
For ordinary services to a business customer abroad, the general B2B place-of-supply rule in § 9(1) ZDPH usually places the supply where the customer is established. That differs from selling to a private consumer, and some services have special rules. Check the customer's business status and the applicable regime before issuing the invoice.
An EU business customer can mean an EC Sales List obligation and, for a Czech non-payer, registration as an identifikovaná osoba, an identified person. Receiving a foreign platform or software service can also create identified-person obligations, even at low turnover. An identified person remains distinct from a full VAT payer and does not get the ordinary right to deduct input VAT. These obligations can also apply while you use the flat-tax regime.
Platform contracts and fees
If you work through a platform, read the contract to establish who buys your service and who charges the platform fee. Depending on the arrangement, the invoice may be addressed to the end client or the platform. Avoid issuing a duplicate invoice if a valid self-billing arrangement already covers the transaction.
Where the platform collects your fee and deducts its commission, reconcile the gross income, platform fee and net payout separately. Do not report only the net payout and then deduct the same fee again.
For a simple illustration, a CZK 10,000 service fee less a CZK 1,000 platform commission produces a CZK 9,000 payout. If the contract treats the full CZK 10,000 as your income and the commission as your expense, the records must explain both. When using percentage expenses, the commission is already covered by the allowance and is not an extra deduction.
Keep the contract, invoices, platform statements and bank records. A platform statement does not automatically replace every tax document you need. Taxorio does not provide a complete platform settlement workflow, so reconcile commissions and other deductions before relying on the income figure in a return.
Tax residence and double taxation
A Czech tax resident generally reports worldwide income in Czechia, with any relief for foreign taxation determined by the applicable treaty and Czech law. A Czech trade registration alone does not establish tax residence. A non-resident's Czech liability is generally limited to Czech-source income.
If you live or work in several countries, have a foreign business establishment or encounter withholding tax, check the specific treaty and your circumstances. Do not assume that every foreign payment can simply be added to a Czech return with no further analysis. The Financial Administration's guidance for people starting a business explains the residence distinction.
Percentage expenses: a worked comparison
The 60% expense allowance can apply to qualifying trade income, while actual expenses use documented deductible business costs. Neither is the same as paušální daň, the flat-tax regime with a combined monthly payment. The comparison below concerns the standard income-tax regime.
Assume a Czech resident has CZK 1,200,000 of qualifying trade income in 2026, no other income, no other deductions or credits, and the full annual basic taxpayer credit of CZK 30,840 available. Both example tax bases fall within the 15% bracket. Social and health insurance are excluded.
| Calculation | 60% allowance | Actual expenses |
|---|---|---|
| Income | CZK 1,200,000 | CZK 1,200,000 |
| Deductible expenses | CZK 720,000 | CZK 150,000 |
| Tax base | CZK 480,000 | CZK 1,050,000 |
| Income tax at 15% | CZK 72,000 | CZK 157,500 |
| After basic taxpayer credit | CZK 41,160 | CZK 126,660 |
The difference in this example is CZK 85,500. It illustrates the arithmetic, not a recommendation that every programmer choose percentage expenses. Actual costs, income classification, other income and available reliefs change the result. Insurance has separate assessment rules and minimums, so it cannot be inferred directly from this table.
The 60% deduction is capped at CZK 1,200,000. Income above CZK 2,000,000 does not make the deduction grow further. A taxpayer claiming percentage expenses still needs records of income and receivables.
Typical IT business expenses
Even if you use an expense allowance, keeping track of spending helps you understand the business. Common categories include:
- Hardware: a laptop, monitor, keyboard, headphones or work phone.
- Software: development-tool licences, cloud hosting, domains and paid repository services.
- Services: coworking, accounting, legal work and platform commissions.
- Office expenses: stationery, furniture and an evidenced business share of eligible home-office costs.
- Phone and internet: the proportion used for business.
- Travel: documented business trips and relevant conferences.
An expense category does not prove deductibility. Separate private use and check purchases that require depreciation. Taxorio does not calculate asset depreciation. If you use percentage expenses, these purchases do not produce additional income-tax deductions.
Upload an invoice or photograph a receipt to let AI extract details, then check the amount, dates, supplier, category and business-use share before confirming. AI reduces entry work but does not decide whether a cost is deductible.
What to check on an IT invoice
- Your business name, IČO and registered address.
- The customer's correct identity and address, with DIČ where relevant.
- A unique document number, issue date and clear description of the work.
- The quantity, agreed price, currency and total.
- For VAT invoices, the required tax details, taxable supply date and any relevant regime wording.
- The agreed due date and correct payment details.
Due dates and bank details are commercially useful, but not every item in this checklist is a universal statutory requirement for every document. The Accounting Act applies to accounting entities; not every OSVČ keeps accounts. VAT invoice requirements depend on the transaction and registration status.
Taxorio provides automatic numbering, ARES lookup, PDF templates and eligible payment QR codes. You still need to supply accurate facts and select the correct tax treatment.
A routine for getting paid
- Agree the billing schedule. Invoice on the agreed date or milestone and keep acceptance evidence.
- Reuse descriptions carefully. Check the current period and hours before saving.
- Schedule fixed retainers. PRO recurring invoices support intervals of 1, 3, 6 or 12 months. For variable hours, prepare and review each month's actual work.
- Check unpaid invoices. Confirm payment records before following up with the client.
- Agree advances where appropriate. A deposit, for example 30–50% on an agreed CZK 50,000 project, is a contractual choice rather than a legal threshold. A VAT payer must also consider tax-document obligations when receiving the advance.
- Keep the contract. Preserve the scope, price, changes, delivery and payment evidence together.
A clear invoice starts with a clear agreement. Saved customer details and service templates can then make administration repeatable without losing the information that explains your work.
Taxorio scope: Taxorio provides invoicing and income/expense records for Czech sole traders. It is not full accounting or personalised tax advice. For an unsupported or unusual case, verify the treatment with a Czech accountant or tax adviser before filing.