How to book employee bonuses and awards in KPiR?

Service-Tax

Entrepreneurs who keep a tax book of revenues and expenses are often also employers. They employ both full-time employees and on the basis of civil law contracts. When and how to book employee salaries, bonuses and awards in KPiR? It depends mainly on the type of the concluded contract.

Salaries, bonuses and awards for employees at KPiR

When we talk about employees, we usually mean all employees, regardless of the type of contract concluded. However, according to Art. 2 of the Labor Code, an employee is a person employed on the basis of an employment contract, appointment, election, appointment or a cooperative employment contract. Income from the employment relationship is, in accordance with Art. 12 of the PIT Act, all kinds of cash payments and the monetary value of benefits in kind or their equivalents, regardless of the source of financing these payments and benefits, in particular:

  • basic salaries,

  • overtime pay,

  • various types of additives,

  • awards,

  • equivalents for unused leave,

  • all other amounts, whether or not they have been predetermined.

Accounting on the basis of payroll payrolls along with possible bonuses and rewards for full-time employees takes place depending on the date of their payment or leaving them at the employee's disposal. Where the payment was made:

  • by the 15th day of the following month - booking is made on the last day of the month to which the remuneration relates,

  • at a later date - the cost of remuneration is recognized on the date of actual payment.

In both cases, the gross amount of remuneration (i.e. with social security contributions charged on the employee's side and the health insurance contribution) is included in column 12 of the KPiR - remuneration in cash and in kind.

The recording of ZUS contributions charged by the employer is different (the remaining part of social contributions and the Labor Fund and the Fund of Guaranteed Employee Benefits). This is because these go to column 13 of the KPiR - other expenses. However, the date of their posting usually falls on the date of payment of social security contributions, with one exception. If the remuneration for work is paid (or made available to the employee) in the same month to which it relates, and ZUS contributions are paid by the 15th day of the following month - exceptionally, the booking is made on the last day of the month to which the remuneration relates.

Art. 2 sec. 6bb of the PIT Act

Contributions for receivables (...) specified in the Act of 13 October 1998 on the social insurance system (...), in the part financed by the payer of contributions, contributions to the Labor Fund and the Guaranteed Employee Benefits Fund (...) are tax deductible costs in the month for which the receivables are due, provided that the contributions are paid:

1) for payments made or made available in the month for which they are due - within the time limit resulting from separate regulations.

Example 1.

On May 10, 2016, the entrepreneur made payments under employment contracts due for April 2016. ZUS contributions were paid on June 14, 2016. In this case, the booking will be as follows:

  • gross salaries will go to the costs of April 2016, which is the month to which they actually relate,

  • ZUS contributions financed by the employer will be eligible for company costs on June 14, i.e. when they are actually paid.

Example 2.

On April 29, 2016, the entrepreneur made the payment of full-time salaries due for April. ZUS contributions were paid on May 15, 2016. Recognition in costs will be as follows:

  • gross salaries will be included in the April costs,

  • ZUS contributions will also go to the costs of April.

Bonuses and awards for employees in the KPiR are recognized in the same way as base salaries. Only one exception should be noted, which is described in Art. 23 sec. 1 point 37 of the PIT Act.According to its content, costs do not include contributions for social insurance, the Labor Fund and other special purpose funds established on the basis of separate acts - from awards and bonuses paid in cash or securities from income after taxation with income tax. This is the case when the bonus is paid directly out of the net income that remains after tax. This issue most often concerns companies operating on the basis of the CIT Act (an identical provision appears in the Personal Income Tax Act) and was the subject of disputes.

The exclusion from the costs of the aforementioned ZUS contributions for awards and bonuses applies to payments from the income generated after deducting all taxes and levies for the benefit of the State Treasury, approved by the Ordinary General Meeting of Shareholders (in sp.z o.o.) or the Ordinary General Meeting of Shareholders (in S.A.). However, there was some doubt as to whether the bonuses and rewards could constitute a tax cost in such a case. On February 1, 2016, the Supreme Administrative Court (SAC composed of 7 judges) confirmed in the resolution with reference number II FPS 5/15 that bonuses and bonuses paid to employees from income after taxation with corporate income tax may constitute tax deductible costs, including tax, in the month of their payment.

Payments for contractors in the KPiR

Posting is slightly different in the case of payments for persons employed under civil law contracts (commission or specific work). Gross remuneration is always booked to costs on the date of its payment. The period of the contract does not matter.

It is similar with ZUS contributions in the part financed by the payer, which are recognized as costs only on the date of their actual payment to ZUS. Here, because Art. 23 sec. 1 point 55a of the PIT Act, which leaves no other option.

Art. 23 sec. 1 point 55a of the PIT Act

Expenses for unpaid contributions to the Social Insurance Institution (...) specified in the Act of 13 October 1998 on the social insurance system, in part financed by the contribution payer, are not considered tax deductible costs.

Therefore, salaries, bonuses and awards for employees in the KPiR are generally booked at the same time - on the basis of a prepared payroll or bills for civil law contracts. On the other hand, the recognition of ZUS contributions financed by the entrepreneur in the costs depends on several factors, such as the type of contract, the date of payment of remuneration and the date of payment of contributions to ZUS.