Farmer and business activity - ZUS or KRUS?

Service

New entrepreneurs who are obliged to pay ZUS contributions have the right to take advantage of the concessions: first, the start-up concession, and then the preferential ZUS contributions. After the period of entitlement to the above-mentioned reliefs (i.e. after 6 and then 24 months), the entrepreneur (assuming that he is not entitled to benefit from the small ZUS plus relief), is obliged to pay ZUS contributions in full. From year to year, the amount of these contributions increases, which may be a challenge, in particular for micro-enterprises with low income. This is where the question arises - are there any alternatives to paying social security contributions to the Social Insurance Institution? KRUS may be the solution to the problem. What is more advantageous for the entrepreneur - payment of contributions to ZUS or KRUS? Check!

ZUS, i.e. the Social Insurance Institution

Commonly known to payers and insured persons, "ZUS" is a state organizational unit aimed at the implementation of tasks in the field of social insurance in Poland. The scope of activities of this institution is defined in Art. 66-71 of the Act of October 13, 1998 on the social insurance system.

Who must report to ZUS?

The insurance obligation at ZUS covers practically all persons performing gainful work, in particular employees, but also:

  • persons performing agency contracts, orders or contracts for the provision of services;
  • entrepreneurs conducting non-agricultural activity or cooperating persons;
  • clergy;
  • persons receiving maternity allowance or allowance in the amount of maternity allowance;
  • persons on parental leave;
  • persons receiving nursing benefits, special care allowances or caregiver's allowances;
  • members of the supervisory board receiving remuneration for performing this function.

KRUS, i.e. the Agricultural Social Insurance Fund

This insurance institution is also a state organizational unit. Its purpose, however, is to provide social security to a specific professional group - farmers. The functioning of this institution is regulated by the Act of 20 December 1990 on social insurance for farmers.

Who reports to KRUS?

Only the farmer or his household members can be insured with KRUS. Art. 6 of the Act on Farmers' Social Insurance specifies that a farmer is an adult natural person residing and running in the territory of the Republic of Poland, personally and on his own account, an agricultural activity on a farm owned by him.

A household member is a person who is 16 years of age or older and who lives with the farmer in the same household or lives on the farm or in the vicinity. Additionally, she constantly performs work on a given farm. Importantly, household members cannot be tied to farmers by employment relationship.

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ZUS or KRUS - which insurer should you contact?

A person who is a farmer - living only on this account, should have no doubts to which insurer he should go. In this case, it will be KRUS.

However, if the farmer decides to start his own business or becomes a partner in the company, he will gain the right to apply for ZUS insurance.

However, what is more profitable - ZUS or KRUS? It cannot be denied that the contributions paid to KRUS are much lower.

Preferential social security contributions

2021



insurance

social

retirement

PLN 163.97

disability

PLN 67.20

sickness

PLN 20.58

accident

PLN 14.03

labor Fund

PLN 0

medical insurance

PLN 381.81

SUM

PLN 647.59

Large Social Insurance Institution (regular contributions)

2021


insurance

social

retirement

PLN 615.93

disability

PLN 252.43

sickness

PLN 77.31

accident

PLN 52.70

labor Fund

PLN 77.31

medical insurance

PLN 381.81

TOTAL

PLN 1,457.49

Both in the case of small and large ZUS - sickness insurance is a voluntary insurance.

Monthly KRUS contributions in the first quarter of 2021

for a farmer running a farm of up to 50 ha

retirement and disability pension

PLN 97

accident, sickness, maternity

PLN 42


medical insurance

The farmer's contribution is PLN 1 for each full conversion hectare of agricultural land

TOTAL

139 PLN + health insurance

As a rule, KRUS contributions depend on the size of the farm (the larger the land, the higher the contributions).

The farmer's health insurance fee is PLN 1 for each full conversion hectare of arable land - so it is not a fixed amount for each person.

At first glance, the answer to the question - ZUS or KRUS seems obvious. The amounts incurred for contributions to KRUS are much lower, but what is behind it?

What to choose - ZUS or KRUS?

A person who meets certain predefined conditions has the right to choose which insurer to make the notification with. The farmer has the right to do so if he decides to start his own business and at the same time:

  • is not employed under an employment contract and is not in a business relationship;
  • is not entitled to a retirement pension, disability pension or other social security benefits;
  • he did not exceed the maximum amount of income tax from the conducted business activity in the previous tax year (for 2020 this amount was PLN 3,540);
  • most importantly - he has been fully insured with KRUS for at least 3 years. The insurance period should be continuous. Additionally, a person who wants to have the right to choose between KRUS and ZUS should run a farm with an area of ‚Äč‚Äčagricultural land exceeding 1 ha.

A farmer who meets the above-mentioned conditions, the self-employed will have the right and the possibility to remain insured in KRUS, which will ensure lower costs related to the payment of social contributions.

Monthly KRUS contributions in the first quarter of 2021

for a farmer running a non-agricultural business and a farm up to 50 ha

pension

PLN 194

accident, sickness, maternity

PLN 42


medical insurance

The farmer's contribution is PLN 1 for each full conversion hectare of agricultural land

TOTAL

PLN 234 + health insurance

A farmer who intends to become an entrepreneur, and would like to be insured with KRUS, should submit a declaration on continuation of insurance to KRUS within 14 days from the date of starting his own business. In order for the KRUS insurance to remain uninterrupted, the farmer-entrepreneur must renew the declaration every year by 31 May.

A farmer insured with ZUS, who is already an entrepreneur, and who wants to re-register from ZUS insurance to KRUS, should deregister (close) his activity - including deregistering from ZUS using the ZUS ZWUA declaration. After performing the above-mentioned activities, a farmer (who is no longer an entrepreneur), who has roles of at least 1 ha, may apply for insurance in KRUS. A farmer who is a former entrepreneur who has made the transition from ZUS to KRUS may not set up a new company or work full-time for the next three years. Only after the expiry of the indicated period will he be entitled to re-establish his own business while retaining the right to insurance in KRUS.

Answering the question - ZUS or KRUS? One would like to answer unequivocally - KRUS. Contributions that a farmer-entrepreneur must pay for insurance are noticeably lower than if he were to pay them in ZUS. However, the formalities involved in switching from one insurer to another often prevent farmers from saving on premiums.