Employment of a pensioner and settlement of social security contributions

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In the case of employing a pensioner, the issue of paying ZUS contributions and tax depends on the form of this employment. What are the differences between an employment contract and a civil law contract, and which option is more advantageous for the employer? Is employing a pensioner profitable? You will learn more about it after reading the article.

Employment of a pensioner based on an employment contract

Employment of a pensioner under an employment contract of a person with an established right to an old-age pension does not require any other insurance in ZUS than those that apply to every other employee. Remuneration under the employment relationship with a pensioner is covered by compulsory ZUS insurance, which results from the Act on the social insurance system. Therefore, an employer who has signed a contract with such a person is obliged to pay contributions for retirement, disability, sickness and accident insurance, as well as for health insurance.

Important!

Contributions to the Labor Fund and the Guaranteed Social Benefit Fund depend on the age of the employee. They are not profitable for women aged 55 and over, and for men aged 60 and over.

The obligation of social insurance and health insurance of the employee, including those with the established right to an old-age pension, lasts from the date of entering into employment until the date of its termination. , within 7 days from the moment of employment (i.e. the emergence of an insurance obligation).

Retiree's mandate contract

If the mandate contract is the only form of employment for such a person, then the mandate contract is the title to:

  • compulsory retirement and disability insurance, accident insurance and health insurance - from the date specified in the contract as the date of commencement of its performance until the termination or expiry of this contract,

  • voluntary sickness insurance - from the date indicated in the application, but not earlier than from the date on which the application was submitted; If the application for compulsory retirement and disability pension insurance and voluntary sickness insurance is submitted within 7 days from the date on which the insurance obligation arises, the sickness insurance cover will take place from the date indicated in the application.

Employing a pensioner on a mandate contract generates the obligation to report him to ZUS on the ZUS ZUA form with the insurance code 04 11 xx, within 7 days from the date of employment, if the person is subject to social and health insurance, or on the ZUS ZZA form, if the person is subject to only health insurance.

Each contract of mandate signed by the pensioner imposes an obligation to pay contributions to the retirement and disability pension insurance. Only when the amount of these contributions reaches the minimum wage will the pensioner be released from this obligation.

If the contractor has a different title to social security and obtains the minimum wage for which social security contributions are paid, only the health insurance premium is obligatory under the contract of mandate.

A pensioner who has signed one contract of mandate is obligatorily subject to retirement and disability pension insurance. The situation is different for a pensioner who has signed more than one contract of mandate.

This rule does not apply to a pensioner who concludes a mandate contract with his or her own employer. Then, the remuneration obtained under the contract of mandate is treated as income obtained from the employment relationship, which results in the calculation of social and health insurance contributions from this income.

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Employment of a pensioner under a specific work contract

The performance of an independent contract for specific work, including by a person with an established right to an old-age pension, does not result in any obligation to be insured with the Social Insurance Institution. The contract for specific work is excluded from the ZUS insurance obligation. In the case of this form of employment of a pensioner, the employer is obligatory to pay income tax for the employee, also in the case of the pensioner.

It is different, if a specific work contract was concluded with your employer, then the income from this contract is the basis for calculating social security and health insurance contributions.

An employer employing a person entitled to an old-age pension who has not reached the general retirement age is obliged to notify the pension body about:

  • employment of a pensioner and the amount of remuneration obtained due to employment,

  • the amount of remuneration earned by the insured pensioner in the previous calendar year. The indicated obligation should be fulfilled after the end of the calendar year.

The employer notifies the pension body about the total amount of income earned by the pensioner in the previous calendar year by the end of February each year.

Assuming that the pensioner has reached the retirement age, the employer is not required to notify ZUS about the employment of this person and the amount of income obtained under the contract of mandate, and after the end of the calendar year about the amount of this income obtained in the previous calendar year.