Medical packages in accounting books - how to motivate employees?

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Medical packages are one of the most popular forms of employee motivation, next to Multisport tickets. Often, employees contribute to the portion of the expense that is deducted from their salary. Check how to properly include medical packages in the accounting books.

Medical packages in the books of accounts - employee income

If employees participate in the costs of medical packages provided to them, they constitute partially paid benefits in accordance with Art. 12 sec. 1 of the PIT Act. Income from the employment relationship is not only cash payments, but also the monetary value of benefits in kind or their equivalents. Hence, the package amount paid by the employer constitutes taxable income under the employment relationship.

Art. 12 sec. 1 of the PIT Act:

Revenues from the service relationship, employment relationship, homework and a cooperative employment relationship are 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: base salaries, remuneration for hours excess, various types of allowances, awards, equivalents for unused leave and all other amounts, regardless of whether their amount has been determined in advance, and in addition, cash benefits incurred for the employee, as well as the value of other unpaid benefits or partially paid benefits.

Taxable income for the employee is calculated as the difference between:

  • the value of the medical package according to the price of its purchase package (based on the invoice or policy received) a

  • the remuneration borne by the employee (i.e. the amount, even a symbolic amount, which is deducted from the employee's remuneration).

Importantly, the employee must agree to receive the benefit in the form of a medical package. He should also be aware of how much the benefit is worth and how much income tax will be deducted from his salary on this account.

Taxable income arises when you become eligible for the benefits included in the financed package of private medical services. This means that it does not matter when and whether the employee uses the services guaranteed by the package received, only when the medical center is obliged to be ready to provide these services. It also results from the resolution of the Supreme Administrative Court adopted on May 24, 2010 (reference number II FPS 1/10).

ZUS contributions for medical packages

As a rule, the employer should calculate ZUS contributions on the income generated by the employee. However, participation in costs may exempt from the obligation to contribute. Then the value of the benefit paid by the employer is not included in the basis of social and health contributions. It is also important in terms of how to include medical packages in the accounting books.

In order to be eligible for the exemption in this regard, several conditions must be met:

  • the benefit is the employee's income from the employment relationship,

  • the right to receive a benefit results from the remuneration regulations (or provisions on remuneration) or from the provisions of collective labor agreements,

  • internal regulations in the company provide for the employee to bear some of the costs for medical packages.

It results from par. 2 clause 1 point 26 of the Ordinance of the Minister of Labor and Social Policy of December 18, 1998 on detailed rules for determining the basis of contribution rates for retirement and disability pension insurance.

Par. 2 clause 1 point 26:

The basis for the assessment of contributions does not include the following revenues: material benefits resulting from collective labor agreements, remuneration regulations or remuneration regulations, consisting in the right to purchase at prices lower than retail prices of certain goods, items or services and the use of free or partially paid travel by means of transport .

Medical packages in the books of accounts - records

In the event that part of the cost for the medical package is borne by the employee, the accounting records should be as follows:

  1. Document for the purchase of medical packages (usually an invoice):
    • WN page account 30 "Purchase settlement"
    • MA page account 21 "Settlements with suppliers" (or account 24 "Other settlements")
  2. Purchase settlement (here the postings are divided into parts paid by the employee and the employer):
    1. part financed by the entrepreneur:
      • WN website account 40-5 "Social insurance and other benefits"
    2. the employee's part:
      • WN page, account 23-4 "Settlements with employees"
    3. amount of packages:
      • MA page account 30 "Purchase settlement"
  3. Deduction of amounts due for a medical package from the employee's remuneration:
    • WN page, account 23 "Settlements on account of remuneration"
    • MA page account 23-4 "Settlements with employees"

Medical packages in the accounting books are deducted in accordance with point 3 on the basis of the payroll (accounting through the PK).

Providing employees with medical packages along with meeting the conditions for exemption from contributing to the Social Insurance Institution (ZUS) is a beneficial form of motivation. The employee himself does not have to incur high costs, and in return gets the opportunity to use many private medical services.