Student on a mandate contract and ZUS contributions
A student on a commission contract is a very popular form of employment among many companies. This tendency is caused by large savings on the part of the employer on this account. What exactly are the benefits of this form of cooperation and what will the parties to the contract gain from it? Answer these questions in the article below!
Student - definition
Pursuant to the definition contained in the Act on Higher Education, a student is considered to be a person enrolled in first-cycle or second-cycle studies or uniform master's studies. You are a student until:
- submission of the last exam required by the study plan,
- taking the diploma examination,
- passing the last internship provided for in the study program,
- deletion from the list of students.
It is worth noting that the provisions do not regulate the issue of whether a person who completed first-cycle studies (and intends to continue them at the second-cycle) from the moment of defense until the re-receipt of a student card at the master's studies can still be treated as a student.
Student organizations also took a position on this matter, according to which the employment of people who graduated from the 1st degree and will continue their studies at the 2nd degree should be exempt from contributions, because in their opinion such persons still have the status of a student - the card is valid until October 31.
Unfortunately, the position of ZUS in this matter is different. According to it, the entrepreneur is obliged to pay contributions for a student employed in the period between the 1st and 2nd degree studies on the basis of a mandate contract, because during the inspection, failure to deduct contributions may be treated as an error.
Who is not considered a student?
You are not considered a student for social security purposes:
- participant of doctoral studies (third-cycle studies),
- participant of postgraduate studies.
In addition, a person employed under a contract, the entrepreneur is obliged to report to health and social insurance:
- from the next day after being removed from the list of students,
- from the day following the defense of the diploma thesis, even if the student is not yet 26,
- from the day the person reaches the age of 26 (this age ends on the last day on which the person turns 26).
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Student on a mandate contract and ZUS contributions
The demand for employing students on the basis of a mandate contract is related to the fact that the entrepreneur is not obliged to pay ZUS contributions for the student. This facility applies to learners under the age of 26. After the age of 26, despite having the status of a student, a person in education will be covered by insurance on general terms, and therefore it will be necessary to pay ZUS contributions.
The document confirming the status of a student is a valid ID or a certificate issued by the dean's office. Students up to the age of 26 can take advantage of their parents' health insurance. If the student is unable to do so, he or she may apply for health insurance by the university.
The exemption from paying ZUS contributions does not apply when a student is employed under a mandate contract with the same entrepreneur on the basis of an employment contract. In such a situation, the entrepreneur is forced to pay social and health insurance contributions.
The situation is different when a student under a mandate contract is employed under a contract of employment with another entrepreneur. In such a situation, the exemption from paying ZUS contributions for having the status of a student applies.
Student employment and the amount of the minimum wage
Pursuant to the law, since 2016, mandate contracts with entities that do not meet the minimum wage from other sources must be obligatorily postponed. Students are an exception in this matter - contributions will not be paid from their remuneration under the mandate contract, regardless of the amount of other earnings. In 2021, the minimum hourly rate on the mandate contract may not be lower than PLN 18.30 gross for one hour of work. A student up to the age of 26 is also exempt from tax. Let us remind you that from August 2019, regulations regarding the PIT exemption for young people were introduced. The new regulations are the most favorable for students employed on the basis of a mandate contract. Such persons are not covered by the obligation to register for insurance, i.e. ZUS contributions are not deducted from their remuneration. Now also the contractor-student will not collect a PIT advance from them. This means that the gross amount is also the amount to be withdrawn.
If you want to calculate the remuneration on the mandate contract, we recommend using the mandate contract calculator.
Rights of a student employed under a mandate contract
It is a very common practice among entrepreneurs to try to use employees, therefore contractors should be vigilant and watch out for this type of behavior. It is also worth remembering that contractors are not bound by law in terms of:
- holiday leave and its granting,
- protection against contract termination,
- sick pay.
In summary, employing a student under a mandate contract is profitable for both the contractor and the principal. The entrepreneur does not pay ZUS contributions for such a person, so the employment costs are lower. On the other hand, the contractor does not pay tax and contributions, which means that I receive a gross amount for my work.