Terms such as outsourcing agreements and work performance agreements are primarily encountered by people who are looking to earn additional income in some way. Students, pensioners, and women on maternity leave are the most common. However, not everyone understands exactly what they mean or what the terms entail.

Work performance agreement (WPA)
The terms of the work performance agreement are that it must be in writing. It can be signed with any number of employers per year, but there is a cap on the number of hours each may work, which is 300 hours. By law, an employer may revoke an agreement in writing without giving a reason, provided that 15 days\’ notice is given.
A key feature of work performance agreements is that social and health insurance are not deducted from earnings. Furthermore, there is no tax on income up to SEK 10,000 if a tax declaration form is signed with the employer. However, only one employer can sign the tax declaration. If you have a contract with more than one employer, you must sign the tax return of the employer with the highest income. If payments exceed SEK 10,000, a tax of 15% is imposed.

Activity Performance Agreement (APA)
The first thing that distinguishes an activity performance agreement is that it limits the maximum hours worked per week. It is also subject to the same rules as a performance contract and must be concluded in writing and can be withdrawn at any time without cause with 15 days\’ notice. The contract may be entered into with the employer for a fixed or indefinite period of time.
Another difference is that FTEs are subject to taxes and social and health insurance premiums. If the monthly income is less than 2,500 CZK, the salary is exempt from taxes by signing another tax declaration. If the monthly income exceeds 2,500 CZK, the deductions are automatically taxable.
As for health insurance, if the state does not pay for it (e.g., students) or if you do not pay for it from other income, you must declare yourself as a person without taxable income to the insurance company and pay it yourself each month. As for the social insurance system, it is automatically deducted if the monthly income is less than 2,500 CZK.