Social security contributions of an entrepreneur working full-time

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People running their own business often decide to find additional full-time employment. This state of affairs is perfectly permissible and fully legal, however, the entrepreneur should remember that running a business and employment under a contract of employment may affect the entrepreneur's ZUS contributions.

Employee ZUS contributions on a full-time basis - social insurance

As a rule, an entrepreneur is obliged to pay retirement, disability, accident and health contributions. Contributions to the Labor Fund are paid by entrepreneurs only in the case of full ZUS contributions (large ZUS) and until the entrepreneur turns 55 for women and 60 for men. Importantly, the entrepreneur's sickness contribution is voluntary and there is no obligation to pay it.

As a rule, an entrepreneur employed full-time does not have to pay social security contributions for two reasons - activity and employment contract. However, in order for this to be possible on a full-time basis, his remuneration cannot be lower than the minimum remuneration for work (in 2021 it is PLN 2,800 gross). In this case, the employment contract remains a compulsory title to social insurance. If the remuneration under the employment relationship is lower, the entrepreneur is obliged to pay social security contributions from both sources of income - company and full-time employment. It does not matter whether the entrepreneur pays contributions from the full base, uses preferential contributions (intended for new entrepreneurs) or from a small ZUS plus. If his contributions under the employment contract are paid on a basis equal to or higher than the minimum wage applicable in a given year, he is exempt from paying social contributions for his activity.

Example 1.

The entrepreneur is registered for full ZUS contributions and started working full-time. Due to the employment contract, he earns the national minimum wage, thanks to which he will be exempt from paying social contributions for business activity.

Example 2.

The entrepreneur pays preferential social security contributions and at the same time is employed under a-time employment contract. The entrepreneur's full-time salary is PLN 3,000 gross. In this case, the entrepreneur is also exempt from paying social contributions for the conducted activity, because the full-time salary is higher than the national minimum. The working time is irrelevant for insurance purposes.

Voluntary sickness contribution

As already mentioned at the beginning of the article, the sickness insurance contribution is voluntary. However, many entrepreneurs choose to pay for it because there are many benefits to it. The largest is the sickness allowance for the period of sick leave or, in the case of women, the maternity allowance. In addition, for the period of receiving the allowance, the entrepreneur has the right to reduce the amount of social contributions in proportion to the period of receiving the benefit.

But what about combining business and full-time work? An entrepreneur who is exempt from paying social contributions due to paid contributions under the employment contract cannot pay the sickness contribution voluntarily. This is due to the fact that an insured person for whom social (old-age and disability pension) contributions are compulsory may apply for voluntary sickness insurance. In the case of compulsory social insurance on a full-time basis, social contributions are voluntary for the entrepreneur. An entrepreneur for whom social contributions are compulsory may apply for voluntary sickness insurance.

Example 3.

Ms. Sylwia runs a business and at the same time is employed on the basis of an employment contract, under which she receives a salary higher than the national minimum wage. As it turned out that she would soon become a mother, she wanted to apply to social security for her business in order to receive a higher maternity allowance. Unfortunately, this is not possible. Ms. Sylwia can apply for social contributions for her activity, but they do not affect the amount of maternity benefit. However, he cannot apply to voluntary health insurance.

Employer's ZUS contributions on a full-time basis - health insurance

This is a bit different with health insurance than with social insurance. An entrepreneur working full-time is obliged to pay health insurance contributions for both the company and the employment relationship. In this case, the value of the remuneration obtained does not matter much. In 2021, the health insurance contribution base is PLN 4,242.38. The value of the health insurance contribution that all entrepreneurs must pay in 2021 is 9% of this base, i.e. PLN 381.81.

Job and activity - can you benefit from preferences?

How working full-time affects the obligation to pay ZUS contributions has already been explained. It should also be explained that working full-time clearly affects the right to pay premiums in a preferential amount.

As a rule, an entrepreneur starting a business has the right to pay preferential ZUS contributions. However, this is not possible if the entrepreneur works for the former employer. This principle is unlikely to raise any doubts.

However, ZUS in the individual interpretation of April 19, 2018, WPI / 200000/43/344/2018, explains that: "[...] the term "former employer" [...] should be understood as each employer for whom work has been performed so far, i.e. before the day of commencement of business activity, including the employer with whom the business operator has not terminated the employment contract . [...]”.

This is a very important tip for people who combine full-time work with running a business. We will explain this in the example below.

Example 4.

Mr.Michał is employed on the basis of an employment contract and at the same time he has set up a business in which he performs projects for the current employer (the subject of the employment contract does not coincide with the activities performed as part of the activity). Since the salary of Mr. Michał under the employment contract is PLN 1,500 gross, he is obliged to pay both social and health contributions for running a business. However, due to the fact that as part of his activity, Mr. Michał performs tasks for the current employer, he cannot benefit from the payment of preferential contributions paid on a lower basis. In such a situation, Mr. Michał should be reported to ZUS for all contributions (social and health) with the code 05 10 - the entrepreneur's ZUS contributions from the full base. Start a free 30-day trial period with no strings attached!

Job and activity versus sick leave

As has already been explained, an entrepreneur employed under an employment contract cannot be registered for sickness insurance, and therefore, during the period of sickness, he is not entitled to receive a sickness benefit from economic activity. On the other hand, under the employment contract, the entrepreneur will, of course, be entitled to sick pay or sickness benefit. But what if, as a result of a sick leave, the employee's remuneration in a given month will be lower than the national minimum? Will the entrepreneur have to pay social contributions in a given month? Well no. In this case, the amount of remuneration due to the employee (entrepreneur) when working the entire month is important.

The situation is different in the case of, for example, unpaid leave. Unpaid leave is treated as "suspension" of the employment relationship. If an employee-entrepreneur stays on unpaid leave for the whole month, then for that month he will be obliged to pay social contributions and health insurance for that month. After returning from unpaid leave, the entrepreneur will again be able to be exempt from paying social contributions for the activity.

Full-time job and activity and the minimum wage at the turn of the year

At the turn of the year, many entrepreneurs working at the same time are wondering whether, due to the postponement of the payment date, they will be obliged to pay contributions for business activity. The point is that if an entrepreneur employed under a contract of employment earns the national minimum wage, and his employer pays the remuneration with a shift to the 10th day of the following month, in practice this means that in January the employee receives a salary lower than that already in force in January.

Example 5.

Ms. Monika receives the minimum wage under the employment contract, which is paid with a shift. At the same time, he runs a business for which he pays only the health insurance contribution. In January 2021, Mrs. What contributions for January should Ms Monika pay for her activity?

For January, Ms. Monika should pay only the health insurance contribution, although this month her full-time salary was less than the current minimum wage. Such a position was confirmed by the Social Insurance Institution in the individual interpretation no. DI / 100000/43/606/2016 of June 30, 2016.

Employee ZUS contributions on a full-time basis - summary

In a situation where the entrepreneur's full-time remuneration is at least equal to the minimum remuneration for work, then as part of his activity he only pays the ZUS contribution for health insurance and ZUS contributions (social and health insurance) collected by the workplace.