How to include insurance premiums in the annual tax return


Insurance premiums are paid by entrepreneurs as well as full-time employees or contractors. As you know, you can also include them in the annual statement. What is it about and how to prove it in the testimony? We answer below.

Types of insurance premiums

Insurance premiums can be divided into three groups that are subject to different deduction rules.

  1. Social insurance contributions (retirement pension, disability pension, accident, sickness), which are deducted from income, both in the case of a self-employed person and persons employed under a contract of employment / mandate.

  2. Health insurance contributions that reduce the advance payment for income tax. However, it should be remembered that the health insurance premium is not deducted in full (9%), but only up to 7.75% of the basis for the calculation of premiums paid.

  3. Contributions to the Labor Fund and the Guaranteed Employee Benefits Fund. In the case of people running a business, only the contribution to the Labor Fund is paid, which is the cost of the business. However, in the case of employed persons, this contribution is financed by the employer and is included in the costs of business activity.

Insurance premiums in the annual tax return - social and health insurance

It follows from the above that the taxpayer may deduct in the annual tax return insurance contributions for social and health insurance, which were paid in the tax year by the taxpayer for his own insurance and the insurance of persons cooperating with him.

The employer is obliged to provide the employee with a PIT-11 declaration by the end of February or if this day falls on the weekend - on the first working day following it, which contains information about the paid social security contributions, which should be deducted from income and tax advance payment, respectively. income in the annual tax return.

In the case of a person running a business, the taxpayer deducts the amount of contributions paid in a given tax year on the basis of payment receipts.

Insurance premiums paid abroad

In the annual settlement, it is possible to include ZUS contributions paid abroad. If the compulsory social security of the taxpayer or persons who cooperate with him is paid in the territory of the European Union, then, in accordance with the regulations, insurance premiums may be recognized on an annual basis. Contributions are not deducted from tax-exempt income in Poland in accordance with the provisions of agreements on the avoidance of double taxation and those deducted abroad.

Refund of undue contributions and the annual tax return

If it turns out that the payer has mistakenly overestimated the basis for calculating the contributions for retirement and disability pension insurance, the overpaid contributions should be returned to the insured. Refunds of contributions will not result in a revision of the annual tax return, but should be shown as income in the tax year when the return was received. If the employee receives the reimbursement, the overpaid advance payment should be shown as income, on which social security contributions are not calculated. However, this is added to the basis for calculating health insurance premiums.