Preferential ZUS (Social Security Institution) contributions in 2022
When starting their own business, each businessperson is required to pay contributions to the Social Insurance Institution (ZUS). However, for a period of 24 months, business owners are entitled to relief on contributions to the Social Insurance Institution. The level of preferential contributions depends on the minimum wage. What will be their level in 2022 and who will be entitled to them?
Autor obrazka: Trent Erwin, źródło: unspash.com
What are the preferential ZUS contributions and how are they calculated?
When carrying on business activity, mandatory ZUS contributions have to be paid monthly, such as: pension, disability pension, medical and accident insurance. The businessperson may also decide to pay additionally a voluntary sickness contribution. Preferential rates, i.e. reduced rates, can be paid to ZUS for 2 years maximum. They are calculated on the base which constitutes 30% of minimum wage in force during a given year.
Who is eligible?
Preferential ZUS contributions apply to the period between 7th and 30th month of running a business, as business owners are exempt from payment of these contributions for the first 6 months of engaging in this activity (so-called start-up relief). A businessperson wishing to take advantage of the reduced ZUS contributions needs to meet jointly the following two conditions:
- He/she does not and has not carried on any other non-agricultural activity during the period of 60 calendar months prior to the commencement of current business activity.
- In addition, within the scope of his/her business activity, he/she may not perform for any former employer by whom he/she was employed under an employment contract in the year in which the company was set up, or in the year preceding it, the same services as were performed when in full-time employment.
Who is not entitled to preferential ZUS contributions?
Unfortunately, the fulfilment of the conditions outlined above does not always grant entitlement to these preferential contributions. Partners in general partnerships, limited partnerships, partnerships, sole proprietors of limited liability companies and creative workers and artists are not entitled to these contributions. Reduced ZUS contributions are also not available to persons who ran a public or non-public school or other facility under the Education Act.
For how long can preferential contributions be made?
Businesspeople are entitled to preferential ZUS contributions for a full 24 months from the date on which social insurance coverage commences. It should also be noted that any suspension of business activity does not extend this period.
How much will the reduced contributions be in 2022?
Currently, the minimum wage is PLN 2,800 gross, and the base for calculating preferential contributions is PLN 840.
From January 2022, the minimum wage will be PLN 3,010 gross. As a result, the amount of the base from which the preferential contributions are calculated will change as well. The amount will be PLN 3,010 x 30% = PLN 903 gross. Including the voluntary sickness contribution, businesspeople taking advantage of the reduced contributions will pay PLN 285.71 per month. The value of the preferential ZUS contributions will be PLN 19.93 higher than in 2021.
How much will the medical insurance contribution be?
In the case of the medical insurance contribution, different rules of calculation apply, and preferential contributions will not apply here. In 2022, it will be charged in accordance with the provisions of the Polish Deal. The amount of the medical contribution depends on the form of taxation of business activity.
What after the end of the period of preferential contributions?
After the full 24 months are up, a businessperson will be subject to standard ZUS contributions. Some companies are eligible for the Small ZUS Plus programme, where social security contributions are reduced.