Today, i.e. 8 January 2020, the last day when an entrepreneur conducting an individual business activity with small turnover, not yet using the so-called "Little Social Security" under the provisions in force In 2019, may apply for the use of the so-called ‘Little Social Security’ under new rules.
The so-called ‘Little ZUS’ has been in force since the beginning 2019, addressed to entrepreneurs whose annual income for 2018 did not exceed 63,000 PLN. The benefit of such a solution is to establish contributions proportionally to the income obtained, which allows to reduce premiums by up to several hundred PLN per month.
Since January 2020 the new maximum income limit is valid; i.e. 67,500 PLN revenue generated in 2019.
Those entrepreneurs who have not so far used this preferential form of payment of ZUS contributions and meet the indicated maximum income criterion for 2019, have time to report a desire to use the “Small Social Security” to 8 January 2020 Notification to benefit from the preferential form of determining contributions is made by deregistration of insurance and re-submission of insurance – it is therefore necessary to submit ZUS ZWUA and ZUS ZUA forms.
From 1 February 2020 the rules of the so-called "Little Social Security" will be amended, from which entrepreneurs will also be able to use the new formula. 2019 have achieved annual income not higher than 120,000 PLN. Consequently, entrepreneurs whose income for 2019 is higher than 67,500 PLN but does not exceed a new limit 120,000 PLN have the time to submit a wish to settle premiums on preferential terms by the end of February 2020
Entrepreneurs who have not yet used the so-called "Little Social Security" do not have to submit a new application.
Entrepreneurs who start a business In 2020 and they want to benefit from the preferential form of determining contributions, they should make a notification within the standard deadline, i.e. 7 days first the date of establishment.
What conditions, in addition to the maximum annual income indicated above, must be met by entrepreneurs in order to be able to benefit from the preferential solution, and this must be taken into account when choosing a preferential form of determining contributions, as shown below.
- The entrepreneur should be established in the previous year for at least 60 days.
- The settlement of income tax in the form of a tax card and the simultaneous use of the VAT exemption result in the lack of the possibility of using the so-called "Small Social Security".
- Doing business for its former employers also excludes the possibility of using the so-called “Little Social Security”.
- In the first monthly report or in the statement of account, entrepreneurs will provide data on income and forms of taxation.
- The time of use of the Small Social Insurance Institution is limited by law - the reduced contribution can be paid up to the maximum by 36 months (3 years) in subsequent years 60 months (5 (years) operating.
Below you can find links to the explanations that the Social Insurance Institution has made available on its website:
https://www.zus.pl/firmy/przedsiebiorco-przeczytaj-wazne/maly-zus-mdg-/maly-zus-mdg-pytania-i-odpowiedzi
A calculator is also available in which entrepreneurs can check whether they are entitled to use the Small Social Security Fund:
https://www.zus.pl/firmy/przedsiebiorco-przeczytaj-wazne/maly-zus-mdg-/kalkulator-mdg
Author: Leszek Dutkiewicz, partner Russell Bedford Poland. Associated with the company from 2011. Director of RBP office in Katowice. In years 2008 – 2011 worked for leading consulting companies Ernst&Young, KPMG, BDO) providing tax advisory services.
He specializes in tax and economic law, primarily in international tax law, tax proceedings, VAT and transaction prices. Author of a publication on tax, civil and international law issues. Lecturer in tax law training. He has legal education, in 2008 graduated from the Faculty of Law and Administration of the Jagiellonian University.