Entrepreneurial allowance with increased contribution basis

People running a business are required to pay contributions. The type of insurance an entrepreneur is covered by depends largely on whether he is also reported to ZUS on a different basis. After meeting the relevant conditions, the payer may also receive benefits from this institution. How to calculate the allowance for an entrepreneur declaring an increased contribution basis?

Covering the entrepreneur with ZUS insurance

As mentioned above, the entrepreneur is subject to insurance depending on whether he has already been reported to ZUS on a different basis. The obligation to pay all social security contributions (retirement pension, disability pension and accident insurance) occurs when the person running the business:

• does not achieve revenues that constitute the basis for paying contributions,

• earns income from other titles that are contributed, but their value is not at least equal to the minimum remuneration for work in a given year (PLN 2,250 in 2019).

Voluntary sickness insurance

Covering compulsory social security contributions does not constitute an entrepreneur's allowance in the event of incapacity for work. Only a person registered for voluntary sickness insurance can receive such a benefit.

An entrepreneur cannot apply only to voluntary sickness insurance, he can do it only if he is covered by compulsory social contributions.

You can register for voluntary sickness insurance at any time. However, you must remember about the so-called the period of waiting for the benefit. The point is that in the event of incapacity for work, the entrepreneur's allowance will be granted only after 90 days of uninterrupted payment of contributions for this insurance. The waiting period does not apply to maternity allowance.

The previous periods of being subject to sickness insurance are included in the waiting period, if the interval between them did not exceed 30 days.

Individual basis for the payment of contributions

A person who owns his own business is obliged to pay social insurance contributions from the base amounting to:

• 60% of the average monthly remuneration adopted to determine the annual limit of the calculation basis for old-age and disability pension insurance contributions (in 2019 - PLN 2,859.00)

• 30% of the minimum remuneration for work during the first 24 months of operating (in 2019 - PLN 675.00) - provided that the entrepreneur has the right to pay preferential contributions.

However, this does not mean that you cannot declare a different amount. Of course, it is a higher basis (the rates given above are the lowest that the entrepreneur can pay contributions). Entrepreneurs decide on such a solution mainly due to the receipt of high benefits from ZUS. But it also has its drawbacks - it is not possible to proportionally reduce the contributions by submitting a correction of the declaration for the period of incapacity for work, as in the case of paying contributions from the standard basis.

The basis for paying the contribution for voluntary sickness insurance cannot exceed in a given month the amount constituting 250% of the forecast average salary (in 2019 PLN 11,912.50).

An allowance for an entrepreneur declaring an increased basis for calculating contributions

In the event of incapacity for work, the basis for the allowance for entrepreneurs is the average monthly income for the period of 12 calendar months preceding the month to which the sick leave relates. When paying sickness insurance contributions above the standard amount, the calculation of the allowance is slightly different. In this situation, the allowance for the entrepreneur is calculated on the basis of the sum of:

• the average monthly lowest basis for calculating sickness insurance contributions, less 13.71%, for the full calendar months of insurance to be included in the basis,

• the amount which is the product of 1/12 of the average declared as the basis for the calculation of sickness insurance contributions of the amount reduced by 13.71% and the number of full calendar months for which the income is included in the basis.