Contract for specific work qualified as a mandate contract and social security contributions

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Entrepreneurs, as part of the optimization of expenses in their business activities, often decide to hire employees on contracts that are not subject to the provisions of the Labor Code and are more often less expensive, i.e. a contract for a specific task or a mandate contract. However, the signed contract of mandate or contract for specific specific work is not always correct. Such a contract may be questioned by ZUS control inspectors and then the entrepreneur will have to change the nature of the contract, as well as pay the resulting liability to ZUS, along with interest.

Contract for specific work and mandate contract

An entrepreneur, when deciding to employ an employee under a contract for a specific task or mandate, must comply with the provisions of the Labor Code and the Civil Code.

It should be remembered that the type of contract is not determined by the name, but the content, conditions and circumstances of work.

When deciding to enter into a specific work contract, an entrepreneur should know that a specific work contract is a result-effect contract that is signed to perform a specific work. Such an agreement is often of a one-off nature. It is only subject to income tax, the contract for specific work does not require payment of social security contributions. However, it is not always free of contributions. If a specific-task contract is concluded with an employee who is already employed by a given employer under an employment contract, the income generated under such a contract is compulsorily insured with ZUS. The same applies to the mandate contract.

A mandate contract is a due diligence contract whose purpose is to perform certain activities, but they do not have to be aimed at achieving a precise result. An entrepreneur employing a student or pupil who is under the age of 26 will not pay the obligatory contributions.

Therefore, a contract for specific work is a cheaper contract for an entrepreneur, as there is no need to pay ZUS contributions under such a contract.

Questioning the type of contract by ZUS

When choosing the type of employment for a future employee, the entrepreneur must be aware that the Social Insurance Institution has the right to check the contract signed by the parties. ZUS controls in particular:

  • applications of persons who have or should have the title to be covered by insurance,

  • correct calculation and payment of contributions,

  • determining entitlement to social insurance benefits.

A person who performs control activities on behalf of the Social Insurance Institution may also verify the validity of the concluded contract and the nature of the work performed. If the ZUS control inspector determines that the type of contract on the basis of which the contractor performs work is inconsistent with the nature of the activities performed, and this action was aimed at avoiding the payment of obligatory contributions, the concluded contract for specific work may be classified by him as a contract of mandate. ZUS may also verify whether the mandate contract does not bear the characteristics of an employment contract. If the type of contract is questioned, the entrepreneur will have to retroactively report the contractor to compulsory social security and health insurance. The application is made on the ZUS ZUA form or on the ZUS ZZA form (if the person employed under a contract of mandate has other insurance titles and is subject only to health insurance). In addition, the entrepreneur will have to pay overdue insurance premiums together with interest for late payment and submit settlement documents for each month of performance of the questioned contract.

Questioning the type of contract by ZUS results in serious costs for the entrepreneur, which are certainly more severe than paying contributions on an ongoing basis when employing a person under a mandate contract instead of under a specific specific contract. It is connected with the necessity to pay all premiums once, from the moment the contract is questioned. In this situation, you can send a letter to ZUS with a request to spread the arrears into installments, but to obtain such consent, certain conditions must be met.