Deductions of remuneration and allowance of the contractor of the PPK participant

Employee remuneration consists of many different elements, this also applies to money charged by contractors and persons performing work on the basis of a specific task contract. Is it possible to deduct from the remuneration by the employer - what can be deducted from the remuneration of the contractor who is a PPK participant?

What is PPK?

PPK - Employee Capital Plans - is a program aimed at increasing the amount of a given person's retirement pension in the future. In order for this capital to be multiplied, it is necessary to systematically increase it throughout the entire period of employment. By joining the PPK, the employee agrees that part of his salary will be transferred to the retirement account (similarly to the payment of contributions to the Social Insurance Institution). The employee is given the opportunity to increase his capital, although this is of course at the expense of the current payment.

Participation in the PPK is completely voluntary, and the payments collected for this program, but ultimately not transferred to the PPK, are refundable. The basic features of PPK are:

• higher rate of return on savings - both the employee and the employer saves under the pension scheme (the employer's basic contribution is 1.5% of a given person's remuneration, the employee's basic contribution is 2% of the salary received. It is possible to declare an additional contribution of 2.5% % for the employer and 2% for the employee);
• completely private savings;
• bonus for participation in the PPK in the form of PLN 250 received at the start and PLN 240 paid annually.

Contractor and PPK

The legislator does not introduce any restrictions as to the possibility of contractors joining the PPK. Under applicable law, such persons may be program participants if they are between the ages of 18 and 70. We should remember that if the employee does not reach 55 years of age, he or she is automatically enrolled in the PPK by the supervisor (unless he expresses his objection earlier). If the employee has already turned 55, an additional application for connection is required. It is also necessary to pay contributions for retirement and disability insurance under the existing mandate contract - otherwise such a person will not be able to join the PPK.

Example 1.

Jan is a student and works on a weekend contract at a nearby coffee shop. In his case, he cannot be included in the PPK, because the employer does not pay any social and health insurance contributions for him. In this situation, it is not possible to make any deductions from the remuneration to the PPK.

Attachment of the contractor's remuneration

The salary received in the course of work may be seized by a bailiff as part of pending enforcement proceedings. It is worth noting that such activities cannot be performed by any debt collection companies - their limited scope of competence does not allow it. Bailiff seizure most often takes place in connection with unpaid alimony payments by the employee. However, it may also relate to other issues (e.g. unpaid loan or credit, unpaid fine or fine).

It turns out that not only the remuneration obtained under the employment relationship is subject to attachment, but also the remuneration received on the basis of a concluded civil law contract (including a mandate contract). However, the seizure of the salary obtained from the order relationship may take place only when it results directly from the relevant bailiff's decision (its content must contain information that the money obtained under a concluded civil law contract is subject to seizure).

Theoretically, the remuneration obtained from the order may be fully seized (i.e. 100%). This is a different rule than that applicable to seizing employee salaries (in the latter case, the bailiff must leave the employee a salary at the minimum statutory value). On the other hand, the contractor may defend himself against being fully seized by the regulation contained in the relevant provisions of the Code of Civil Procedure. According to the content of Art. 833 § 21 of the Code of Civil Procedure, the provisions of Art. 87 and art. 871 of the Labor Code shall apply mutatis mutandis to all recurring benefits aimed at ensuring subsistence or constituting the only source of income of the debtor who is a natural person. In practice, this means that the debtor may defend his remuneration against full seizure by bailiffs, relying on the obligation to leave him with at least the minimum salary.

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Deductions from the contractor's remuneration

The contractor is entitled to receive an allowance from which appropriate deductions can also be made. In practice, the bailiff should make a separate deduction from all benefits received by the contractor (separately from the remuneration, separately from the allowance received). When making deductions from the contractor's salary, the PIT advance payment from the payment to the PPK financed by the principal and the entire payment to the PPK covered by the contractor's funds are subtracted from the basis for its making.

If the contract of mandate is the only source of the employee's livelihood, the employer may attach the salary only to the extent that he leaves the contractor with an amount corresponding to the minimum wage for work (needed to meet basic subsistence needs).

In this case, the basis for the deduction is the net remuneration paid, less payments made to the PPK. The basis for the deduction should be reduced by the income tax advance payment (PIT) calculated on the payment to the PPK financed by the client and by the entire payment to the PPK financed by the insured.

Example 2.

The contractor obtains a monthly remuneration of PLN 2,900 net and is a participant in the PPK. The bailiff instituted enforcement proceedings against him in respect of the outstanding loan, as a result of which he seized the salary received under the contract of mandate. The basis for the deduction (PDP) will be PLN 2,065.19 (basic fee to the PPK financed by the client: PLN 2,900 × 1.5% = PLN 43.50, basic payment to the PPK financed by the contractor: PLN 2,900 × 2% = PLN 58 , calculation basis for social insurance contributions: PLN 2,900, social insurance contributions financed by the insured in total: PLN 397.59, calculation basis for health insurance: PLN 2,502.41, health insurance contribution 9%: PLN 225.22, health insurance contribution 7.75 %: PLN 193.94, tax deductible costs: (PLN 2,900 - PLN 397.59) × 20% = PLN 500.48, tax base: PLN 2,900 - PLN 397.59 - PLN 500.48 + PLN 43.50 ≈ PLN 2045, advance payment on PIT to the Tax Office: PLN 2045 × 17% - PLN 193.94 ≈ PLN 154. Summing up, PLN 2900 - PLN 397.59 - PLN 225.22 - PLN 154 - PLN 58 = PLN 2065.19).

The maximum allowable deduction (MDKP) for a non-maintenance benefit is 1/2 PDP: PLN 2,065.19 × 1/2 = PLN 1,032.60. The amount free from attachment is in this case PLN 1110.70 - we subtract it from PDP, which in the discussed case gives us PLN 2065.19 - PLN 1110.77 = PLN 954.42. The result should be compared with MDKP (PLN 1032.60). If it is equal or greater, the FMKP is limited to the MDKP. When the score is lower than the MDKP, the FMKP is equal to the score. In this case, FMKP = 954.42 PLN. The amount of the deduction of the non-maintenance benefit from the remuneration: PLN 954.42, remuneration for the "on hand" order: PLN 2065.19 - PLN 954.42 = PLN 1110.77.

Deductions from Contractor's Benefit

With regard to deductions made from the allowance collected by the contractor, the principal does not pay PIT advances from the benefits of the contractors, but pays them in a gross amount.

Example 3.

The contractor receives an allowance in the amount of PLN 799 net and is a participant in the PPK. The bailiff initiated enforcement proceedings against him in respect of the overdue loan, as a result of which he seized the advance received by the debtor. The maximum allowable deduction (MDKP) for non-maintenance benefit is 25% of the gross benefit amount: PLN 799 × 25% = PLN 199.75. The amount free from deductions due to non-maintenance payments is PLN 878.81 / month; the actual free amount is calculated by dividing PLN 878.81 by 30 and multiplying by the number of days spent on the allowance (we assume that the contractor was on the allowance for 9 days) - PLN 878.81 / 30 × 9 = PLN 263.64. Then we subtract the free amount from PDP: PLN 663 - PLN 263.64 = PLN 399.36. The free amount is created by multiplying the value of the allowance by the value of the non-paid income tax advance, and then subtracting it from the amount of the advance payment (in our case, this is illustrated by the action PLN 799 × 17% = PLN 135.83; PLN 799 - PLN 135.83 = PLN 663 ). The result is compared to MDKP (i.e. PLN 199.75). Since it is higher, FMKP is limited to MDKP. The amount of the deduction of the non-maintenance allowance from the allowance: PLN 199.75, the "hand" allowance: PLN 663 - PLN 199.75 = PLN 463.25 + PLN 136 PIT advance.

Summary - Contractor's Wage and Benefit Deductions

Remuneration and benefits received by contractors may be deducted as part of the bailiff proceedings. However, the entire salary resulting from the contract of mandate cannot be seized, as is the case with the salary resulting from the employment relationship. Calculating the amount free from attachment and the basis for making the deduction is a time-consuming process and requires a lot of accounting information relating to a given employee, this also applies to the amount of the contribution paid as part of participation in the PPK. In practice, this process should be carried out by an experienced accountant.