If you conduct an economic activity on the basis of an entry in the Central Register and Information on Business Activity (CEIDG) or other specific provisions and the income from that activity in the previous calendar year does not exceed 30-the minimum salary is from 1 January 2019 – You will have the right to pay reduced social security contributions.
However, the reduced contributions can only be paid by the entrepreneur whose income in the year 2018 was not higher than 63,000 PLN, and the activity was conducted throughout the year.
Consequently, it should be borne in mind that the number of days of business activity must correspond to the number of days on which the entrepreneur was subject to social insurance or health insurance in the previous year for carrying out that activity.
It should not include the number of days on which the entrepreneur was subject, for example, to insurance in KRUS or abroad.
However, if 2018 the activity has been started, terminated or suspended, for which it was carried out only for a part of the year, the limit which could not exceed the operating income is proportionately lower. The limit can be easily calculated by dividing thirty times the minimum wage by the number of calendar days of the previous year and multiplying the result by the actual number of calendar days of business activity in the previous calendar year (e.g. 334 days).
Example:
(63,000 : 365) x 334 = 57,649.31505 ≈ 57,649.32 PLN.
However, if in the previous year business activity was conducted by less than 60 days, the entrepreneur will not be able to use the so-called "small ZUS" in the year 2019.
To get to the bottom of this – in order to calculate the reduced base the dimensions of contributions, the average monthly income for conducting business activity from the previous year should be multiplied by the rate announced annually by the President of the Social Insurance Institution announced in the Polish Monitor, whose amount for the current year 2019 is 0.5083.
Example
Annual income for non-agricultural business activity in the previous calendar year
_________________________________________________________________ x 30
number of calendar days of non-agricultural business activity in the previous calendar year
Y x 0.5083 =new basis for the assessment of social security contributions
Compare to amount 30% minimum remuneration if the calculated contribution base is lower than indicated 30%, it must be raised to this level.
However, it should be borne in mind that such a reduced basis for social security contributions can be paid up to 36 months in the last 60 the calendar months of business. In addition, it is worth noting that the calendar month is every month in which the entrepreneur was subject to social or health insurance for at least one day.
If you have settled in the form of a tax card and did not benefit from the VAT exemption, the income from the business activity is the value of the sales in question. Under Article 2(22) Goods and Services Tax Act. It is subject to taxation by tax card, without the amount of that tax
Exceptions to the rule
There are several other exceptions when the entrepreneur will not be able to benefit from the "small ZUS" and include the following situations:
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- you have settled in the form of a tax card and benefited from the VAT exemption. These conditions must be met together;
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- you have also been subject to social insurance or health insurance for other non-agricultural activities (e.g. as a partner of a public partnership);
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- you meet the conditions for paying ‘preferential contributions’, i.e. contributions from the declared amount not less than 30% minimum remuneration;
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- you perform for your former or current employer what you did for him as an employee in the current or previous calendar year.
Necessary formalities
In order to benefit from the ‘small ZUS’, please submit the following notification documents:
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- deregistration from insurance (ZUS ZWUA) with the insurance title code starting with 05 10, 05 12, if you continue to pursue your business In 2018
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registration to social security (ZUS ZUA) or - if you are subject only to health insurance -notification to this insurance (ZUS ZZA) with the insurance title code starting from 05 90 either 05 92 (the insurance title code provided for persons with a pension granted for incapacity for work.
The documents referred to above shall be forwarded within a time limit 7 days from:
•
1 January (or to 8 January 2019) – if you continue to pursue your business In 2018 or if, at the end of December, you have completed the ‘preferential premiums’ relief period (register with coded insurance 05 70 either 05 72 And report the code 05 90 either 05 92),
•
first the date of establishment or resumption of business,
•
first the date on which you will meet the conditions for using the ‘small Social Security’ (e.g. you have completed the ‘preferential contributions’ period during the year).
The above mentioned amendments to the Social Security Act have been introduced Act dated 20 July 2008 amending certain laws to reduce social security contributions of individuals engaged in smaller-scale economic activities Journal of Laws of 2018, item 1577).
You still have to remember. one that changes that entered into force on the day 1 January 2019 do not concern the basis for the contribution to health insurance.
Nikol Małaszewska-Dąbrowska
Author:
Nikol Małaszewska-Dąbrowska
Manager at the Legal Department. From 2011 It provides advice to leading companies from various sectors of the economy. He has extensive experience in conducting comprehensive projects in the field of national and international law. It participates in legal and tax reviews conducted to identify risks. He is also the author of numerous articles on tax issues, published in the industry press.