Employment of a spouse in a company and costs

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Hiring a spouse for the company is not prohibited by law. Nevertheless, on the basis of the PIT and social insurance act, specific regulations concerning their settlement have been introduced by the legislator.

People running a business often use the help of members of the immediate family. In many cases, they have the status of the so-called cooperating people.

Tax regulations do not contain a definition of cooperating persons. It is included in the provisions of the Act on the social insurance system. Insurance regulations precisely defined who could be a cooperating person.

Persons cooperating with persons conducting non-agricultural activity and contractors may therefore only be:

  • spouse,

  • own children, children of the other spouse and adopted children,

  • parents, stepmother and stepfather as well

  • adoptive persons,

- if they stay with them in a common household and cooperate in conducting this activity or performing an agency contract or order (Article 8 (11) of the Act on the Social Insurance System).

These rules do not apply to people with whom an employment contract has been concluded for the purpose of apprenticeship.

Therefore, if such family members as those mentioned above stay with the economic operator in a joint household and cooperate in running this activity, even if they sign an employment contract with him, they cannot be treated as employees by the insurance regulations.

On the other hand, qualifying an employee, in terms of insurance, to cooperating persons entails certain consequences in the sphere of tax law, i.e. it affects the amount of income tax advances calculated and paid by the employer.

Employment of a spouse in a company and insurance contributions

The spouse assisting in the activity should be registered with the Social Insurance Institution (cooperating persons were assigned the insurance code ZUS 05 11).

Insurance of cooperating persons with whom the entrepreneur has concluded an employment contract is determined on the same terms as the entrepreneur's insurance. It should be noted that helping family members cannot benefit from preferential ZUS rates.

Contributions for an entrepreneur in 2016 are as follows:

  • social insurance contribution - PLN 772.96 (with sick pay) or PLN 713.35 (without sick pay),

  • health insurance premium - PLN 288.95,

  • contribution to the Labor Fund - PLN 59.61.

Tax advance payment - spouse as a cooperating person

The method of determining the employee's income for tax purposes, and thus the correctness of calculating the advance tax, is related to the Act on the social insurance system. According to its provisions, for social security purposes, in this case, the employee is treated as a cooperating person. Therefore, if such family members as those mentioned above remain with the economic operator in a joint household and cooperate in carrying out this activity, even if they sign an employment contract with him, they cannot be treated as employees by the insurance regulations.

On the other hand, qualifying an employee, in terms of insurance, to cooperating persons entails certain consequences in the sphere of tax law, i.e. it affects the amount of income tax advances calculated and paid by the employer.

The employee's income is considered to be the income obtained during the month from the employment relationship after deducting the contributions for retirement, disability and sickness insurance, specified in the provisions on the social insurance system, deducted by the payer in the given month, in the part collected from the employee-taxpayer's funds. Half of the pension and disability pension contributions as well as the entire sickness contribution are covered by the employee himself.

Then, the calculated advance payment is reduced by the amount of the health insurance premium collected this month by the workplace in accordance with the provisions on health care benefits from public funds. Thus, the tax regulations show that when calculating advances for income tax on the remuneration paid to the employee, the payer reduces his income and the advance payment by those contributions that the employee is obliged to finance from his own funds.

The employer, when calculating the advance on income tax on the remuneration paid to the cooperating person under the employment contract, does not reduce his income by social security contributions. It also does not reduce the tax advance by the amount of the health insurance premium. This is because the contributions have not been drawn from that person's funds.

Example 1.

The husband hired his wife, the amount of her salary was 6,000 gross. In this case, the advance tax should be calculated as follows:

The tax base is: PLN 5,888.75 (PLN 6,000 - PLN 111.25 - employee tax-deductible costs)

In such a situation, the advance payment for income tax amounts to: PLN 1,059.98 (5,888.75 x 18%) - 46.33.

Accounting for expenses related to the spouse's remuneration as costs

The overriding principle in income tax is that only those costs that directly or indirectly serve the purpose of obtaining revenues by the company or serve to preserve or secure the source of revenues may be included in tax deductible costs. There are exceptions to this rule, listed in Art. 23 of the PIT Act. And so, the value of the taxpayer's own work, his spouse and minor children cannot be tax deductible costs, and in the case of partnerships also the value of the own work of the spouses and minor children of partners.

Consequently, the remuneration paid to a family member does not constitute a tax deductible cost.

Including ZUS contributions for a cooperating person as costs

A taxpayer-entrepreneur pays social security contributions for a cooperating person, and therefore has the right to deduct social security contributions (from income) and health insurance (from tax), while contributions to the Labor Fund may be included in tax deductible costs. date of their payment.

The entrepreneur deducts the health insurance premium for the cooperating person (7.75% of the basis of the contribution assessment) from the income tax.