Payment of outstanding remuneration to employees and social security contributions and tax

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It sometimes happens that, for various reasons, the employer does not pay employees on time. The reason may be, for example, a temporary lack of money. Payment of outstanding wages to employees also takes place when the employee wins a dispute in court with the employer. Is the payment of outstanding wages and late payment interest to employees a basis for contributions and taxation? You can read about it in our article.

What is the difference between gross and net remuneration?

As a rule, the employment contract specifies the gross amount. This remuneration is reduced by the Social Insurance Institution (ZUS) contributions and the income tax advance payment. After deducting these amounts, we get the net salary that the employee receives.

Attention!

The net salary is the so-called remuneration "on hand".

 

ZUS contributions are first deducted from gross remuneration, which are transferred to insurance:

  • retirement pension - a contribution of 9.76%,

  • disability pension - 1.5% premium,

  • sickness - contribution 2.45%,

  • health care - 9% premium.

The pension contribution is also paid by the employer (the pension contribution is 9.76%, the pension contribution is 6.5%). In addition, the employer pays the accident contribution.

In turn, the advance on income tax is transferred to the tax office in the amount of 18 or 32%, respectively, after deducting tax deductible costs (PLN 111.25 or PLN 139.06 for people working outside the place of residence) and the tax-free amount (46.33 zloty).

The remuneration becomes the employee's income when the employee receives it (the Personal Income Tax Act). If the remuneration for September is paid on October 10, the amount of remuneration is the employee's income in October, and the ZUS contributions and the income tax advance payment should be paid in the following month (ZUS contributions usually by the 15th day of the following month, tax advance payment - by the 20th day of the following month). on the next month).

Payment of outstanding wages to employees

The employer's obligation is to pay wages for work in a timely manner (Art. 94 point 5 of the Labor Code). In the event of non-payment of remuneration on time, the employee, regardless of whether he has an employment relationship with the employer, may demand payment of the outstanding remuneration from him.

The overdue remuneration, as well as the remuneration paid on time, constitutes the employee's income, on which the Social Insurance Institution (ZUS) contributions and the tax advance should be deducted.

Suppose the wage is paid on the 10th of the following month. If, for any reason, the employer pays this wage in the next month (e.g. for September, the wage will be paid not in October, but in November), then the outstanding wage is the basis for contributing and taxation in November.

Interest is charged for each day of delay in paying wages. If the amount of interest is not specified in the regulations, statutory interest shall apply. Do they also constitute the basis for taxation and contributions? Well, no, ZUS contributions and the personal income tax advance are paid only on the outstanding remuneration (Article 21 (1) (95) of the Personal Income Tax Act).

Important!

Default interest does not constitute the basis for taxation and contributions.

In addition, if the employee has suffered a loss in connection with the failure to receive the remuneration on time, he may also claim compensation.

In the event of a court ruling on the payment of outstanding remuneration, the awarded amount is the gross amount, on which appropriate receivables must be paid.

Attention!

When deducting due liabilities, the rates applicable at the time of payment of the outstanding remuneration should be used.

Example 1.

The employee received his salary for February late on April 10. Interest was accrued on the outstanding remuneration. Do you have to pay social security contributions and an advance on income tax on the outstanding remuneration and interest? If yes then when?

The salary for February with accrued interest is the employee's income on the day the money is received, ie April 10. Therefore, the employer should pay social and health insurance contributions as well as an advance on income tax in May from the outstanding remuneration. Importantly, the deductions are made only from the outstanding remuneration, interest is paid to the employee in full.

Importantly, if an employee receives more than one salary in a given month, e.g. in June, in addition to the salary for May, he also receives the outstanding salary for April, then only once in a given month you can deduct tax deductible costs and the tax-free amount.

In summary, the salary paid constitutes the employee's income in the month of receipt of the payment. If, for any reason, the employer does not pay the employee's wages on time, he is obliged to pay the outstanding wages with interest. The overdue remuneration constitutes the employee's income in the month of its receipt and therefore in the month of its receipt it is the basis for contributions and taxation. In turn, the interest paid is not paid in the form of social security contributions and income tax advances.