Social insurance for people running a business

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Persons running a business in Poland may, depending on their status, pay social insurance contributions at the Social Insurance Institution (ZUS) or at the Agricultural Social Insurance Fund (KRUS).

Entrepreneur's insurance obligations

A person running a non-agricultural business activity, regardless of its type, is subject to social insurance and health insurance from the date of commencement of business activity until the end of conducting business activity, except for the period for which it suspended this activity.

During non-agricultural activity, it is obligatory to pay contributions:

  1. for social insurance:

    • pension (currently 19.52% of the calculation basis),

    • disability benefits (currently 8% of the calculation basis),

    • accident (currently 1.67% of the basis of assessment as standard).

The accident insurance premium calculated from 1.67% of the calculation basis (i.e. 50% of the highest interest rate for a given contribution year for groups of activities) is paid by payers:

  • subject to entry in the REGON register and reporting to accident insurance for no more than 9 insured persons,

  • not subject to entry in the REGON register (regardless of the number of insured persons registered for accident insurance).

  1. for health insurance - in the amount of 9% of the calculation basis, 7.75% of the calculation basis may be deducted from income tax.

When a person running a non-agricultural activity is compulsorily subject to social insurance, then:

  • may pay a contribution for voluntary sickness insurance in the amount of 2.45% of the calculation basis,

  • must pay a contribution to the Labor Fund in the amount of 2.45% of the assessment base, if the monthly assessment base for this contribution is at least equal to the amount of the minimum wage, i.e. it is not paid by people who pay preferential ZUS contributions for a period of 24 months. The insured persons who have reached 55 years of age - women or 60 years - men - are also exempt from paying contributions to the Labor Fund.

The fact of commencing business activity must be reported to the Social Insurance Institution (ZUS) by submitting a contribution payer application and self-employment as an insured person. The contribution payer is registered after submitting an entry in the business activity register to the city office on the form with CEIDG-1.

If running a business is the entrepreneur's only source of income - the only title to insurance, the entrepreneur submits an insurance application on the ZUS ZUA form. If the entrepreneur has a different title to insurance, e.g. an employment contract with a salary higher than or equal to the minimum wage for work, then this person should only be reported to health insurance on the ZUS ZZA form. Applications for insurance must be made within 7 days from the date of the social insurance obligation (from the date of commencement of economic activity). The relevant application form can also be submitted when submitting the CEIDG-1 application.

Relief in paying contributions for setting up a business

People starting their own business can take advantage of a two-year relief in paying social security contributions. The basis for calculating contributions for these people is not 60% of the average wage, but 30% of the minimum wage for a given year. Preferential social security contributions may be paid by persons conducting non-agricultural business activity, including partners of a civil partnership, on the basis of provisions on business activity or other specific provisions. The relief is available to people who are not currently running a business or have not run it in the last 60 months. Also, the exercise of a freelance profession is an economic activity and these people can also benefit from the relief. However, the following may not benefit from the preferential rules for paying contributions:

  • partners of general partnerships, limited partnerships or partnerships and a one-person partner of a limited liability company,

  • creators and artists,

  • persons engaged in economic activity for a former employer for whom, prior to the commencement of economic activity in the current or previous calendar year, they performed activities falling within the scope of their economic activity under an employment relationship or a cooperative employment relationship.

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Insurance in KRUS for a farmer

In some circumstances, a farmer or a household member who starts a non-agricultural activity or starts cooperation in conducting this activity, and at the same time runs a farm, under the conditions specified in the Act on farmers' social insurance, may retain the right to pay contributions to KRUS instead of ZUS, if:

  • has been fully insured under the Act for at least 3 years and continues to carry out agricultural activities or permanently work on a farm covering an area of ‚Äč‚Äčagricultural land over 1 conversion ha or in a special section within the meaning of the Act on farmers' social insurance;

  • submits a declaration to KRUS on the continuation of this insurance within 14 days from the commencement of non-agricultural business activity or the commencement of cooperation in its conduct. The declaration may be submitted on the application for entry in the central register and information on economic activity (CEIDG-1),

  • is not an employee and is not in a business relationship,

  • does not have an established right to a retirement pension or disability pension or social security benefits,

  • the amount of income tax due for the previous tax year on revenues from non-agricultural business activity (if this activity was carried out), documented with a certificate of the head of the tax office, does not exceed the specified limit amount.

Cooperating persons and social insurance

Cooperating persons are subject to compulsory retirement, disability and accident insurance from the date of commencement of cooperation in non-agricultural activities until the date of termination of this cooperation. Contributions for social and health insurance of the cooperating person are financed entirely from their own funds by non-agricultural activity. A person cooperating with a person conducting non-agricultural activity is considered to be members of his family:

  • spouse,

  • own children,

  • children of the other spouse,

  • adopted children,

  • parents

  • stepmother and stepfather,

- if they stay with the economic operator in a common household and cooperate in carrying out this activity. For a cooperating person, full ZUS contributions must be paid, from the calculation basis applicable to the person running a business. Therefore, for each family member helping in running the business, the entrepreneur should pay ZUS contributions on the same terms as for himself, but for a cooperating person it is not possible to pay preferential ZUS contributions.

Social security during the suspension period

The entrepreneur may decide to suspend the business in the course of running a business. During this time, he does not pay insurance premiums for his business activity. The break does not result in the loss of the right to ZUS relief for new companies, however, the break period is included in the 24-month period in which the relief is granted. The entrepreneur may suspend non-agricultural activities, provided that they do not employ any employees. Both suspension and resumption of business activity takes place at the request of the entrepreneur.

The suspension of economic activity takes place at the written request of the entrepreneur, which should be submitted to the appropriate registration authority (city or commune office) on the CEIDG-1 form. This notification should include, inter alia, the following data:

  • entrepreneur's name,

  • PESEL number,

  • entrepreneur's place of residence and address,

  • the commencement date and the expected period of suspension of business activity,

  • a statement that the entrepreneur does not currently employ employees as part of his business activity.

The period of suspension of activity starts on the date indicated in the application, but not earlier than on the date of submitting the application and may last from 30 days to 24 months. After resuming business activity, even for a short period, it is possible to suspend it again.

After the expiry of the suspension period, the entrepreneur is obliged to report its resumption to the registration authority (form CEIDG-1). It must do so within 7 days of the suspension of activities.

Important!

If the entrepreneur does not submit an application for the resumption of activity within 24 months from the date of suspension of activity, the registration authority deletes the entrepreneur ex officio.

Contribution payment deadlines and consequences of delays

Contribution payers, divided into three groups, pay contributions accordingly:

  • by the 5th day - contributions transferred by budgetary units, budgetary establishments and auxiliary farms;

  • up to the 10th day - premiums for natural persons who pay the premium only for themselves;

  • up to the 15th day - deadline for other payers.

If the due date falls on a statutory holiday, the contribution is due on the next working day at the latest. The payer must remember that the payment is considered to be made only when the amount is credited to the ZUS bank account.

Late payments shall mean the obligation to pay default interest, they are not charged if their amount does not exceed PLN 6.60. Repeated delays can even result in a fine. In addition, ZUS may charge the debtor with an additional fee of up to 100% of unpaid contributions.

In the case of voluntary insurance, any untimely payment shall terminate the insurance period. If the contributions were paid late or not in full, the entrepreneur must submit an application to the Social Insurance Institution (ZUS) for reinstating the deadline for paying contributions, indicating the reason for the delay. If the application is approved, the person conducting the business activity will maintain the continuity of the sickness insurance. In the case of a negative answer, the sickness insurance will cease from the first day of the month for which contributions were paid late or on time, but in an underestimated amount.