||The objective of this study is to analyse and to evaluate the prime pillar of the Czech pension system with respect to the incentives on continued work in the old – age. As a tool of this, the implicit tax is being used. In the first part, some of the concepts of implicit tax and the ways of their use are being explored. The calculations of implicit tax made in the second part do not support the standard retirement age as the most advantageous age of the labour market withdrawal. Furthermore, the impact of both the gender and the improving level of mortality has been proved. In this thesis the connection between two scientific disciplines, economics and demography, is illustrated. In the very end, the use of implicit tax as the tool in economic policy is discussed. According to the results of the sensitivity analysis such application of implicit tax is impugned.