You invoice one client on your živnost (trade licence), you sit in their office, you work on their laptop and their logo sits in your e-mail signature. If that describes your week, read this twice. Švarcsystém — performing dependent work outside an employment relationship — is illegal in Czechia, and enforcement has tightened. Since 2025 labour inspectors may make covert audio and video recordings, and a single finding is enough to prove the case; they no longer have to document a long-running pattern.
What švarcsystém actually is
Under the Czech Labour Code, work counts as dependent work — that is, employment — when it is performed in a relationship of superiority and subordination, in the employer's name, on the employer's instructions and in person. If that is how you genuinely work, no "cooperation agreement" will save the arrangement. What decides the case is the factual situation, not the paperwork.
What inspectors look at
| Warning sign | What points to genuine business |
|---|---|
| One client, long term, full time | Several clients, even if some are small |
| Fixed working hours and attendance records | You decide when and where you work |
| Laptop, phone and licences supplied by the client | Your own equipment and tools, recorded as expenses |
| Company e-mail, business card, a place on the org chart | Your own brand, website and e-mail |
| Hourly pay for time at the desk, holiday you have to get approved | Invoicing for a deliverable, your own price list |
| You cannot turn down work you are given | You take on and decline jobs freely |
No single sign settles the matter — inspectors and courts weigh the whole picture. That is what the case law around "external" programmers turns on: formally sole traders, in practice team members with fixed hours and stand-ups. The company's fine was upheld.
What is at stake in 2026
- The company: a fine of CZK 50,000 to CZK 10,000,000, a ban on the activity for up to two years, publication on the labour inspectorate's blacklist and the status of an unreliable employer.
- You, the OSVČ (sole trader): a fine of up to CZK 100,000 for performing illegal work.
- The tax aftermath, for both sides: inspectorates pass their findings to the tax authorities, so tax can be reassessed within the assessment period (a basic three years, extendable up to ten) and insurance contributions up to ten years back — in your case typically by reclassifying favourable OSVČ contributions as contributions on employment income.
How to lower the risk if you do want to work on a trade licence
A sole trader working for a company is perfectly legal. Only disguised employment is not. What helps an arrangement survive an inspection:
- Spread your client base. Even one extra small job a year changes the picture. Keep acquiring on your own account — a website, a portfolio, a profile on freelance platforms.
- Invoice for a result, not for attendance. A defined deliverable, milestones or a monthly fee for an agreed scope reads better than "160 hours at X CZK".
- Work on your own equipment and claim it as a tax-deductible expense — your own laptop, software and phone are evidence of independence at the same time.
- Sign a commercial contract: the right to decline a job, your own liability for defects (professional liability insurance is worth considering), the right to send a substitute.
- Behave like a business: your own invoices with your own number series, a price list, expense records, your own e-mail address. Clients read it as professionalism — and during an inspection it is evidence you cannot buy afterwards.
When it is time to act
If you ticked most of the left-hand column above, you have two honest options: move to an employment contract with that client (part time counts), or genuinely go independent — take on other clients and set the arrangement up again from scratch. Our breakdown of how much a sole trader really keeps from what they invoice is a useful input, and so is a comparison of trading as an s.r.o. (Czech limited company) against staying an OSVČ.
In short
Švarcsystém is not about what your contract says; it is about what the working relationship looks like in practice. Inspections have been tougher since 2025 — covert recordings, a single finding as proof, fines up to CZK 10 million for the company and CZK 100,000 for the sole trader — and IT and marketing freelancers are squarely in scope. The best defence is real independence: several clients, your own equipment, invoicing for a result, and records you can put in front of an inspector.
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.