ZUS contributions for novice entrepreneurs
As a rule, every person starting a non-agricultural business activity, if it is the only title to insurance, is obliged to pay ZUS contributions. Therefore, with the commencement of business activity, a new entrepreneur is subject to compulsory retirement, disability, health and accident insurance, while sickness insurance is voluntary. See what contributions novice entrepreneurs are required to pay.
Relief in paying ZUS contributions for novice entrepreneurs
Persons running a business after the end of using the start-up relief or voluntarily resigning from this relief have the right to pay, for a period of two years (24 months) from the date of commencement of business activity, reduced social security contributions. When paying the lowest possible ZUS contributions, it must be remembered that the benefits received in this respect will also be among the lowest in the future.
This relief does not apply to entrepreneurs who, as part of their activities, provide the same services to the former employer that they provided for two years before the date of commencement of this activity. On the other hand, the relief is available to those who previously had an employment relationship with the former employer, but who in the previous and current tax year were not employees of his company. In addition, people who want to take advantage of the preferential rate of contributions must declare that 60 months prior to the commencement of business activity, they did not conduct any other non-agricultural business activity.
Who cannot take advantage of the preferential conditions for paying contributions?
- partners of a general partnership, limited partnership and partnership,
- a person who is a partner of a sole proprietorship limited liability company
- creators and artists.
ZUS contributions for beginning entrepreneurs
1. Social insurance - in 2021, the minimum basis for calculating social insurance contributions for people starting a business is PLN 840, i.e. 30% of the minimum wage (30% x PLN 2,800 = PLN 840).
Consequently, individual ZUS contributions for social insurance are as follows:
- pension insurance - PLN 163.97 (19.52%),
- disability insurance - PLN 67.20 (8%),
- accident insurance - PLN 14.03 (1.67% for companies insuring up to 9 people) - as a rule, the interest rate of the accident insurance premium is determined individually for each payer (from 0.67% to 3.33%),
- voluntary sickness insurance - PLN 20.58 (2.45%).
The total monthly amount of contributions (including voluntary health insurance) in 2021 is PLN 265.78.
Obviously, if the start of business activity or the transition to preferential contributions took place in the middle of the month, then the minimum base is proportionally reduced (the amount of the minimum base is divided by the number of days in a given month and multiplied by the days on which contributions were paid and were subject to insurance (e.g. . the business started on June 12, then PLN 840/30 days x 19 days = PLN 532).
2. Health insurance - the basis for the calculation of this premium is the amount which may not be lower than 75% of the average monthly salary in the fourth quarter of last year (including payments from profit). At the moment, we do not know the amount of the health insurance premium in force in 2021.In 2020, it amounted to PLN 362.34.
The amount of the health insurance contribution is 9% of the base amount. Important information is that part of it is tax deductible. This rate is 7.75% of the basis of assessment.
Contrary to sickness insurance, the principle of proportionality does not apply here if the business started in the middle of the month.
3. Labor Fund - the basis for the contribution to the Labor Fund is the same amount that applies to the calculation of social insurance contributions, but without the annual limitation (we write about it below). That is - people running a business are obliged to pay ZUS contributions to the Labor Fund only if they are determined on the basis of the amounts constituting the basis for the assessment of social insurance contributions and amount to at least the equivalent of the minimum wage for work per month.
A person starting a business and benefiting from preferential rules for paying contributions does not have to pay the Labor Fund, because the basis for assessing contributions for retirement and disability insurance is lower than the minimum wage (PLN 2,800 in 2021). Moreover, entrepreneurs: a woman over 55 and a man over 60 are exempt from paying contributions to the Labor Fund.
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What should you remember?
Some entrepreneurs report an amount higher than the minimum amount to the basis of assessment of social security contributions. However, then they must remember that:
- the annual basis for calculating social security contributions may not be higher than thirty times the forecast average wage;
- the basis of contribution rates for sickness insurance of persons who are subject to sickness insurance voluntarily may not exceed 250% of the forecast average monthly remuneration per month. The calculation basis for contributions to voluntary sickness insurance in 2021 may not exceed PLN 13,147.50 per month.
- the right to sickness benefit is obtained on the basis of sickness insurance after 90 days of uninterrupted reliance on this insurance.
Read more about ZUS contributions:
What determines the amount of the entrepreneur's ZUS contribution?
Preferential social security contributions - how much are they in 2020?
Contribution calculation basis - the amount of ZUS contributions of the entrepreneur and the employee
ZUS contributions as a tax deductible cost
Entrepreneur's application to ZUS
A natural person who starts running a business shall only report this fact to the Central Register and Information on Economic Activity. For this purpose, it submits an application for entry in the business activity register on the CEIDG-1 form. Then the application with a copy of the entry is sent to ZUS. On the basis of the data from the received application, he prepares a declaration of the contribution payer (ZUS ZFA form) for the entrepreneur. The entrepreneur may add relevant notification declarations to the CEIDG application as an attachment, or if he does not do so, he must independently apply for social insurance and health insurance. This notification is made at ZUS on the form:
- ZUS ZUA - if the entrepreneur is subject to social and health insurance or
- ZUS ZZA - if the entrepreneur is subject only to health insurance.
The entrepreneur shall apply for insurance within 7 days from the date of commencement of business activity. Application declarations may be completed and submitted together with the CEIDG-1 application.
On the other hand, after completing / resigning from the start-up relief, entrepreneurs want to use preferential contributions, then they should submit ZUS ZWUA declarations to ZUS (deregistering the start-up relief). Then, in order to start paying the preferential contributions, they submit ZUS ZUA or ZZA.
Deadline for payment of ZUS contributions
Natural persons paying the premium only for themselves pay it by the 10th day of the following month. However, if the entrepreneur also reports other persons to insurance (a co-worker, employee or contractor), then ZUS contributions for the current month are paid by the 15th day of the following month.
Accounting for contributions
A person running a business shows ZUS contributions for social and health insurance in the ZUS DRA settlement declaration, which should be submitted by the 10th day of the current month for the previous month. Beginning entrepreneurs using the preferential rules for paying contributions are exempt from submitting declarations for the next month, but only on condition that in the previous month they have shown that they pay ZUS contributions on preferential terms.
People starting a business during the month should submit a ZUS DRA declaration for this month and the following month to the Social Insurance Institution.
Every novice entrepreneur should acquire information related to ZUS contributions as soon as possible, because failure to report to ZUS entails certain consequences. It should be remembered that social, accident and health insurance is compulsory and you have to pay contributions to it systematically. Sickness insurance also requires regular contributions, although it is voluntary, because paying them late or in full amount causes the sickness insurance to cease immediately from the first day of the calendar month for which ZUS contributions have not been paid.
Settlement of preferential contributions in the wFirma.pl system
In the wFirma.pl system, entrepreneurs after filling in the SETTINGS »TAXES» ZUS tab and selecting the "2-year tax relief for new companies" scheme. In the generated ZUS DRA START declaration »ZUS» SETTLEMENT DECLARATIONS »ADD DECLARATION, social insurance contributions paid on a preferential basis will be calculated and the insurance title code 05 70 will be automatically set.
After the actual payment of the declaration, using the ACCOUNT action, it will be marked as paid and therefore it will be taken into account when calculating the income tax advance.