A sole proprietor in Poland is obliged to pay not only income taxes (VAT), but also to make social fees to ZUS. It is necessary to register in ZUS within 7 days after registering your business activity. We told you more about how to open your own sole proprietorship in Poland in our article.
Sometimes small businesses simply do not earn so much that to pay approach tax, insurance and medical contributions. What to do in such a case? For such cases, the Polish government has developed a special preferential program. Today we will tell you more about how to take advantage of the favorable conditions for ZUS fees. Let's get started!!
What contributions to ZUS are mandatory?
If you haven't managed to start your own company yet, you probably don't know yet what you will have to share your profits on. The mandatory contributions to ZUS for a sole proprietorship are as follows:
Health Insurance contribution;
Pension contribution;
Disability contribution;
Workplace accident contribution;
Contribution to funds;
Sickness contribution (This contribution allows you to receive money during illness and also during maternity leave after the birth of a child. This contribution is not compulsory and is voluntary).
As you have already realized, you will have to give a substantial part of your income from the business. A sole proprietor starts to pay the mandatory contributions from the first day of his activity, which is specified in the application for registration of a sole proprietorship. You can start paying the voluntary contribution at any time of your activity at your own will by submitting a corresponding application.
What affects the amount of ZUS contributions?
Several factors influence what ZUS contributions and how much they will be assessed. Here are the most important ones:
How long your sole proprietorship has been operating;
What form of taxation you chose when registering (there are several options);
Whether you work through the sole proprietorship with a former Polish employer;
Whether the entrepreneur has other grounds for paying contributions.
There is no single scheme for figuring out how much and what kind of contributions to pay. Each case will be different.
What is Mały ZUS plus?
The Mały ZUS plus program started in 2020 and provides preferential conditions for small sole proprietorships. The benefit is granted for three years within a five-year period, and after this period expires, it is repeated.
Here's what it looks like in a real-life case study: Imagine you are just starting your business. If your income is less than half of the minimum wage in Poland, you can run your business without registering at all. If your income is higher, you must officially register your sole proprietorship. You can take advantage of the Mały ZUS plus program and for the first six months you will be exempt from paying social contributions. During the next two years, you will be able to benefit from reduced social security contributions.
Key requirements for obtaining preferential contributions
The terms of application of Mały ZUS plus benefits in 2024 for sole proprietorships in Poland are as follows:
The turnover of funds for the year must not exceed PLN 120 thousand. If the activity was carried out for less than a year, a proportionally lower turnover threshold is calculated;
You conducted your activity in the previous year for at least 60 days;
The activity is not performed for a former employer and does not include the same services that the entrepreneur rendered to the employer as an employee in the current year.
There are also situations when it is forbidden to take advantage of such a preferential program. For example, if you are entitled to the składki preferencyjne benefit or if you paid tax in the form of karta podatkowa in the previous year and were exempted from paying VAT. You will also not be able to benefit from this program if you were insured with ZUS last year on the basis of other activities.
In order to join the preferential system of social contributions in Poland, a sole proprietor will need to opt out of the current system. Then you will need to submit a special application to ZUS, which can be downloaded here. After that, you will only have to wait for a new notification on the ZUS portal.
