Insurance with a start-up relief for collaborators and employees
It happens that entrepreneurs use family help or hire employees from the very beginning of their business activity. Persons applying the start-up relief may have doubts whether the preference in the form of exemption from social contributions applies only to themselves, or it may also apply to cooperating and employed persons. Read the article and find out what the entrepreneur is obliged to pay for insurance with a start-up relief.
What is a start-up allowance and what does it entitle to?
The start-up relief exempts the entrepreneur from the obligation to pay social security contributions for the first 6 months of running a business. The preference does not apply to the health insurance contribution, which is still compulsory from the date of registration of business activity.
Art. 8 sec. 1 of the Entrepreneurs' Law
"An entrepreneur who is a natural person who undertakes business activity for the first time or undertakes it again after at least 60 months from the date of its last suspension or termination and does not perform it for the benefit of a former employer for whom, prior to the commencement of business activity in the current or in the previous calendar year, he performed activities falling within the scope of his economic activity under an employment relationship or a cooperative employment relationship, he is not subject to compulsory social insurance for a period of 6 months from the date of commencement of economic activity ”.
The start discount is valid from April 30, 2018.
The employment of cooperating persons, employees or contractors in the company does not deprive the entrepreneur of the right to a start-up allowance. This preference is available to any person who meets the conditions set out in the Entrepreneurs' Law, regardless of whether he conducts business independently or uses the help of his family or unrelated persons.
Start-up relief insurance - a person cooperating with the entrepreneur
Pursuant to the Act on the social insurance system, cooperating persons are family members, such as, for example, a spouse, parents or children, as long as they help in running a business and remain in a common household with the entrepreneur.
For a cooperating person, contributions should be paid in the same amount as for an entrepreneur, however, it must be borne in mind that only entrepreneurs are entitled to exemption from social insurance with a start-up relief. If the entrepreneur uses the help of a family member considered to be a cooperating person, he is obliged to pay standard contributions for it. The exception is when a family member is covered by social insurance for another reason.
It is worth knowing that the costs related to the insurance of the cooperating person are borne entirely by the entrepreneur. It is not charged with any insurance fees.
Mr. Henryk is a photographer, he runs a business and benefits from a start-up tax relief. His spouse as a graphic designer helps him with photo processing, is not employed anywhere, and does not run his own business. What premiums should Mr. Henryk pay for the start-up relief for himself and his spouse?
Mr. Henryk is obliged to pay for himself only health insurance, and for his spouse he pays all social contributions (retirement, disability, accident) and health insurance. Henryk's spouse may also be declared for voluntary sickness insurance, which provides her with a benefit in the event of sickness or maternity.
The spouse of Mr. Henryk from example 1 helps in running a business, but additionally she has entered into an employment relationship with another employer and receives a salary higher than the national minimum wage. How is the situation regarding the insurance with the start-up relief changing in relation to Mr. Henryk and his wife?
Mr. Henryk pays only the health insurance for himself (start-up allowance) and his spouse (coincidence of insurance titles).
A cooperating person is also not subject to the preferences in the form of a small ZUS, i.e. the possibility for the entrepreneur to pay reduced social contributions before the first full 24 months of running a business. Preferential ZUS is available to the person running the company after using the start discount.
Start-up relief insurance - employment of employees and contractors by an entrepreneur
As already mentioned, the employment of employees or contractors does not exclude the possibility of taking advantage of the preferences in the form of a start discount. However, the exemption from paying insurance premiums applies only to entrepreneurs. Employees and contractors are subject to compulsory social and health insurance. An exception may be a coincidence of titles to the contractor's insurance.
Start-up relief insurance for collaborators, employees and contractors - final conclusions
Summing up, we can say that the start-up relief applies only to a person running a business. Both social and health insurance with entrepreneur's start-up relief are obligatory for cooperating persons, employees and contractors of a given entrepreneur and are not subject to reduction. Only persons with a different title to insurance may be exempted from the obligation to pay contributions, which, in accordance with the regulations, grants them exemption from the obligation to pay ZUS contributions, e.g. contractors employed under an employment contract in another company and earning at least the national minimum income on this account are obliged to pay only health premiums under the mandate contract.
Therefore, it does not matter whether a person running a business takes advantage of a start-up allowance, a small ZUS, has overlapping insurance titles and pays only a health insurance premium for the business or is obliged to pay a large ZUS, all persons employed in the company, regardless of the type of contract or the degree of relationship, is subject to insurance on general terms.