How to calculate employees' salaries?

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The salary specified in the employment contract is usually specified in the gross amount. However, the amount the employee receives is actually much lower. Why is this happening? Well, the remuneration is reduced by social security contributions, health insurance and income tax. Check how to calculate salaries!

How to calculate remuneration when contributing to additional remuneration components?

Thus, it should be remembered that the gross remuneration includes all bonuses, allowances, remuneration for overtime, sick pay or holiday equivalent. The employer is required to deduct ZUS contributions from all these components.

This is because not all salary supplements are subject to the contribution obligation. The following are exempt from this obligation:

  • disability and retirement benefits,
  • allowances and reimbursement of business travel expenses,
  • jubilee awards,
  • benefits granted by the employer for improving professional qualifications,
  • severance pay, indemnities and compensations paid to employees on termination or termination of employment.

What contributions are deducted when calculating my salary?

In order to determine the net wage (payable) as mentioned above, the relevant social security contributions must be deducted from the employee's income. However, not everyone knows that only some of them are financed from his salary. The contributions paid by the employer do not matter. They are only determined on the basis of gross wages and are paid by the employer from his own resources.

The exact percentages of social security contributions are as follows.

Type of contribution

Interest rates

The worker covers

Employer covers

for retirement insurance

19,52%

9,76%

9,76%

for disability insurance

8,00%

1,5%

6,5%

for sickness insurance

2,45%

2,45%

-

for accident insurance

1,67%

-

1,67%

The rules for differentiating the interest rate of contributions for accident insurance are set out in the provisions on social insurance against accidents at work and occupational diseases. When calculating the amount of remuneration for an employee, the remuneration calculator 2021 may be useful.

Calculating remuneration and health insurance

As a rule, when calculating the wage to be paid, the health insurance contribution, the rate of which is 9% of gross wage less social security contributions, must also be deducted. In the case of low wages, part-time employees, it may happen that the health insurance contribution will be limited to the amount of the income tax advance payment.

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Payments to the PPK when calculating the remuneration

A person who wants to join the Employee Capital Schemes must take into account that the employer will collect contributions from his salary, which will then be transferred to a financial institution. The basic payment for a PPK participant is 2% of the calculation basis for retirement and disability pension contributions, and may also declare an additional amount, the value of which may not exceed 2%.

In addition, it should be borne in mind that the contributions financed by the employer (1.5% of the pension base, and the additional contribution may not exceed 2.5%), constitute income for the employee and are subject to income tax, which will also affect the net remuneration. . When calculating the remuneration of a PPK participant, not only payments to the PPK should be taken into account, but also the income from the employment relationship, which arises from payments made by the employer.

How to calculate salaries - determining advance income tax

The final step in determining your net salary is to subtract your gross salary from your income tax. To determine the basis for calculating the advance income tax, social security contributions and tax deductible costs should be deducted from the employee's income. The type of costs used depends on the place of residence of the employee and is a fixed lump sum. The detailed rates of these costs are as follows:
- for a local employee - PLN 250.00,
- commuting employee - PLN 300.00. After deducting premiums and tax deductible costs from gross remuneration, appropriate calculations should be made - multiply the obtained basis by a specific tax rate (17% or 32%), and then subtract the tax-free amount from the received value (if the employer is a payer entitled to her shots). The tax calculated in this way should be additionally reduced by the health insurance contribution, but only in the amount of 7.75% of the basis of the contribution assessment. After this reduction, the due advance payment for income tax is received.

Read more on how to calculate salaries:
How to calculate sick pay?
Holiday pay - how to calculate correctly?
Gross-net earnings - how to calculate the salary

Deduction of contributions and tax when calculating remuneration - necessary or not?

On the one hand, contributions and taxes take a large part of the employee's income, on the other hand, however, thanks to this method, the employee can be calm and does not have to worry about the proper calculation and payment of these liabilities. Thanks to the payment of contributions, the employee has the opportunity to take advantage of free medical care, receives benefits in the event of incapacity for work, but also has funds provided when he reaches retirement age.

Example 1.

Mr. Jakub receives a basic salary of 3,200 gross. The monthly salary is fixed and does not receive any salary supplements. The employee lives in the town where his workplace is located.He is also a participant of the PPK and does not benefit from PIT exemption for young people. What wages will he receive?

Step 1. Determine your gross wage including all allowances and benefits

Gross salary: PLN 3,200

Step 2. Calculate employee-financed social security contributions

Calculation of social security contributions financed by the employee and subtracting them from gross salary:

  • pension contribution: 9.76% x PLN 3,200 = PLN 312.32

  • disability pension: 1.5% x PLN 3200 = PLN 48.00

  • sickness contribution: 2.45% x PLN 3200 = PLN 78.40

The sum of social security contributions: PLN 438.72

Step 3. Calculating the health insurance premium

After deducting the social security contributions from the salary, the basis for calculating the health insurance contribution is obtained. The next step is to calculate this premium - its rate is 9%, of which only 7.75% is deductible.

The basis for the calculation of the health insurance contribution: PLN 3,200 - PLN 438.72 = PLN 2,761.28

Health contribution in full: PLN 2,761.28 x 9% = PLN 248.52

Deductible health insurance contribution: PLN 2,761.28 x 7.75% = PLN 214.00

Step 4. Calculation of contributions to the PPK

Calculation of PPK contributions and subtracting them from remuneration:

Employee's PPK: 2% x PLN 3200 = PLN 64

Employer's PPK: 1.5% x PLN 3200 = PLN 48

Step 5. Advance payment for income tax

Calculation of the advance payment for income tax.

  • calculation of the tax base by subtracting from the gross remuneration social security contributions and tax deductible costs - the amount of tax deductible costs assumed in the example is PLN 250, the income from the PPK financed by the employer is PLN 48.

Gross salary: PLN 3,200

The amount of social security contributions: PLN 438.72

Tax-deductible costs: PLN 250.00

Tax base: PLN 3,200 - PLN 438.72 + PLN 48 - PLN 250.00 = PLN 2,559.28, should be rounded to the nearest PLN: PLN 2,559

  • tax calculation according to a specific rate - in the example it is assumed that the tax rate is 17% - income below PLN 85,528

Due tax: PLN 2,559 x 17% = PLN 435.03

  • deducting the tax-free amount from the tax received, this amount is statutory and its monthly amount is PLN 43.76

Due tax less the tax-free amount: PLN 435.03 - PLN 43.76 = PLN 391.27

  • tax deduction of the amount of health insurance. Please note that you can only deduct the premium according to the 7.75% rate. The amount of the advance payment for income tax should be rounded to the full number.

Due tax - PLN 391.27

Deductible health insurance contribution - 2,761.28 x 7.75% = PLN 214.00

Advance payment for income tax - PLN 391.27 - PLN 214 = PLN 177.27 = PLN 177.00 (after rounding)

Step 6. Determining the net remuneration

Determining the net salary by deducting from the income the amount of social security contributions, health insurance and tax.

Gross salary - PLN 3,200

Social security contributions - PLN 438.72

Health insurance contribution - PLN 248.52

Contribution to the Employee's PPK - PLN 64

Advance tax payment - PLN 177

Net salary: PLN 3,200 - PLN 438.72 - PLN 248.52 - PLN 64 - PLN 177 = PLN 2,271.76

Calculation of remuneration in the wFirma.pl system

The wFirma.pl employee settlement software allows for a simple calculation of employee salaries. After setting the appropriate parameters in the employee's contract, he will be automatically charged a salary on the payroll, which can be made in HR »PAYROLL LISTS» MENU »COLLECTIVE» ADD WAGE LIST.

Thanks to this, a document will be created, which will list individual components of the remuneration. On its basis, you can also prepare a ZUS settlement declaration and calculate an advance on income tax for an employee.