The start relief deprives you of the right to be exempt from ZUS
Only entrepreneurs who meet the relevant conditions are entitled to apply for the remission of ZUS contributions for a period of 3 months. However, this privilege does not apply to people who set up a business several months ago and benefit from a 6-month premium relief. Why the loss relief deprives you of the right to be exempt from ZUS.
Who can apply for exemption from ZUS?
At the moment, in order to be eligible for exemption from ZUS for the period from March to May 2020, a self-employed person should meet 3 conditions:
- conduct business before February 1, 2020,
- achieve income from activity that in the first month specified in the application does not exceed the amount of PLN 15,681,
- not be in arrears with ZUS as at December 31, 2019 for a period longer than 12 months.
It is also important here to meet the condition of recognizing an entrepreneur as a person running a business within the meaning of the provisions on the social insurance system. And this is where the problem arises in the definition of people benefiting from the start-up tax relief.
Why does the start relief deprive you of the right to be exempt from ZUS?
Due to many doubts that arose after the adoption of the anti-crisis shield, a document with the most frequently asked questions by entrepreneurs has appeared on the ZUS website. There we can also find an answer to the question why the start relief deprives the right to be exempt from ZUS.
"Can a person who has been running a business since January 1, 2020 and uses a start-up discount (he pays only the health insurance premium), take advantage of the staging benefit and exemption from paying contributions for March-May 2020?
(...) Such a person cannot take advantage of the exemption from paying unpaid contributions due to contributions for March, April and May 2020 in the case of exemption from the obligation to pay unpaid contributions due to contributions for March, April and May 2020, Art. 31zo paragraph 2 indicates that the exemption may be used by contribution payers who are persons engaged in non-agricultural activity and pay contributions solely for their own social or health insurance referred to in art. 8 sec. 6 of the Act on the social insurance system. Persons exempted for 6 months from the obligation to pay social security contributions (i.e. benefiting from the so-called start-up relief) pursuant to Art. 8 sec. 6 point 1 are not considered persons conducting non-agricultural activity within the meaning of the provisions on the social insurance system. "
It is worth noting, however, that other persons who pay only the health insurance premium, such as entrepreneurs, are not subject to exclusion:
- who are retired,
- receiving maternity allowance,
- employed full-time with a salary higher than the minimum wage.
Will people on the start-up relief suffer large losses due to the inability to benefit from the cancellation of contributions?
If the entrepreneur earns income, he will not lose out due to not taking advantage of the redemption of contributions. It is worth remembering that the health insurance contribution of 7.75% is fully tax deductible. This means that if the insured did not pay the premiums, the tax payable would increase by the value of the unpaid premium. To put it simply - when a self-employed person pays PLN 362.34 to ZUS every month this year, and he can deduct a part of his health insurance from the tax, i.e. PLN 312.02, then in the case of using the exemption from ZUS, the tax will not be reduced by 7.75 %, which means it will be higher by PLN 312.02. This gives a total of savings of PLN 50.32.
Unfortunately, in the case of people who do not achieve income, there will be nothing to deduct the premium from, which means that they will incur the cost of insurance in the amount of PLN 362.34 every month.
Summing up, despite the fact that the start-up tax deprives the right to exemption from ZUS, the losses for the entrepreneur will not be great. The anti-crisis shield will be changed again, so it is worth monitoring whether the situation of novice entrepreneurs will also change.