Family business - hiring family members
In Poland, a large number of entrepreneurs decide to set up a family business. Often, at the time of its establishment, the children and spouses become co-workers or employees employed under an employment contract or a civil law contract. In this article, we explain what hiring family members looks like.
Hiring family members - on what basis?
The legislator did not specify provisions that would prohibit the employment of family members on the basis of a prepared contract, nor does it prescribe what type of contract it should be. Therefore, employment of family members may be based on:
- job contract,
- specific work contracts,
- contract of mandate.
It should be emphasized that each of the above-mentioned agreements will have different effects in terms of income tax and ZUS.
Employing family members as a collaborator
A cooperating person is an increasingly common concept among Polish companies. Who is it about? By a cooperating person pursuant to Art. 8 sec. 11 of the Act on the Social Insurance System should be understood as:
- own children,
- children of the other spouse and adopted children,
- stepmother and stepfather,
- adoptive persons,
if they stay with the entrepreneur in a common household and cooperate in the conduct of business or performance of an agency contract or contract of mandate.
A cooperating person is not a person with whom an employment contract was concluded for the purpose of apprenticeship.
Employing family members and obligations towards ZUS
Regardless of whether a family member is employed under a contract or has the status of a cooperating person, the entrepreneur is obliged to insure him / her and pay social security contributions.
A family member should be reported by the entrepreneur to social and health insurance on the ZUS ZUA form with the insurance title code 05 11 x x. made on the form ZUS ZZA.
The application of a family member employed in the company on the appropriate form should be made within 7 days from the date of the insurance obligation.
In addition to reporting such a person, you should prepare each month:
- ZUS DRA declaration - a settlement declaration, which shows the settlement of ZUS contributions and benefits paid to employees,
- ZUS RCA declaration - personal monthly report on contributions due and benefits paid - when the cooperating person is covered by both social and health insurance,
- ZUS RZA declaration - personal monthly report on due health contributions - when the cooperating person is only subject to health insurance
- by the 15th day of the month for the previous month.
When ending cooperation with a cooperating person, the entrepreneur deregisters them based on the ZUS ZWUA form.
Cooperating person and ZUS contributions
What ZUS contributions the entrepreneur will be obliged to settle for the cooperating person depends, inter alia, on the type of contract and whether this person has no other title to insurance. The exact dependencies are presented in the table below.
Terms of cooperation
Paid social security contributions
Cooperating person employed on the basis of an employment contract or working without a contract
Always called large ZUS in the amount as for entrepreneurs
A cooperating person employed on the basis of a paid mandate contract
ZUS contributions as for any other mandate contract
A cooperating person who also works for another employer
Contribution for health insurance (provided that the other employer earns a salary equal to at least the lowest national salary)
Employment of a cooperating person and PIT obligations
When a cooperating person acts against payment, the entrepreneur is obliged to calculate and pay advances for income tax (PIT-4). After the end of the tax year, you should prepare:
PIT-11 in three copies (for the employer, for the employee, for the Tax Office),
PIT-4R in two copies (for the employer, for the Tax Office).
A cooperating person who works unpaid releases the entrepreneur from the obligation to prepare the above-mentioned forms. Importantly, the unpaid work of a cooperating person constitutes income for the entrepreneur from free benefits. However, when this work is performed by entities belonging to tax group I and II, this income may benefit from the exemption.
Tax group I - spouse, descendants (children, grandchildren, etc.), ascendants (parents, grandparents, etc.), stepson, son-in-law, daughter-in-law, siblings, stepfather, stepmother and in-laws.
Tax group II - descendants of siblings, parents' siblings, descendants and spouses of stepchildren, spouses of siblings and siblings of spouses, spouses of siblings of spouses, spouses of other descendants.
A person cooperating in company costs
Social security contributions per person cooperating in costs
Social contributions paid for a cooperating person may be deducted from income. Importantly, the premium for health insurance of the cooperating person free of charge (7.75% of the calculation basis) is deducted by the owner of the company from income tax.
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Remuneration of a cooperating person in costs
Remuneration paid to a cooperating person (within the meaning of a spouse or minor child) from 2019 may be classified as tax deductible costs. This is due to the change in the content of Art. 23 sec. 1 point 10, in which it was indicated that "the tax deductible cost is, however, the remuneration of the taxpayer's spouse and minor children of the taxpayer, and in the case of conducting business in the form of a company that is not a legal person - also the spouses and minor children of the company's partners, due under the titles specified in art. . 12 sec. 1, art. 13 points 2, 8 and 9 or for completing graduate apprenticeships referred to in the Act of 17 July 2009 on post-graduate apprenticeships, subject to point 55 and art. 22 sec. 6ba ".
Employing family members free of charge in the wFirma.pl system
In the wFirma.pl system, in the "Online Accounting" package, it is possible, among other things, to add a family member to ZUS insurance when he or she is employed free of charge (they provide assistance to the entrepreneur free of charge and without a contract). To do this, add a cooperating person in the SETTINGS »TAXES» ZUS »PERSONS» ADD tab.
A window will appear that allows you to enter the data of a cooperating person.
After clicking the SAVE option, an additional window will appear in which you should define the period of cooperation commencement (in the system it is possible to mark the end date of cooperation, if it is undefined - it can be supplemented later) and the scheme of contributions:
Ordinary - means paying full social and health contributions - for people who have no other title to insurance,
Only health insurance - this scheme of contributions is intended for people with a different title to insurance (e.g. an employment contract with a salary higher than the national minimum wage).
A cooperating person introduced in this way will prompt themselves on the generated ZUS declarations (both reporting and settlement).
The wFirma.pl system enables the settlement of cooperating persons employed under an employment contract. However, it is then necessary to introduce such a person to the system twice, as a person cooperating in SETTINGS »TAXES» ZUS »COOPERATING PERSONS» ADD and as an employee. At this point, when choosing a scheme, it will be necessary to mark the option Employment under an employment contract.
Then, after saving the settings, the system will automatically redirect the user to complete the data for the employment contract. Importantly, the insurance title code 05 11 should appear automatically in the ZUS tab. The system also enables the employment of persons cooperating under a specific task or mandate contract.