Sole entrepreneurs are to pay less in social insurance contributions

Starting January 2019, sole entrepreneurs are subject to smaller social insurance payments. The obligatory amount will depend on the company’s turnover. This is a huge change for many companies in Poland.

Alike to other Polish legal entities, private entrepreneurs should make a payment to Zakład Ubezpieczeń Społecznych (Social Insurance Institution), or ZUS. The sum is different each year. Last year the payments were more than 1200 zlotys a month which is high for a sole entrepreneur. In fact, ZUS is something many businessmen are complaining about. The only way to pay less is to keep employees’ salaries at the same level. Moreover, if a company has no profits it still has to pay ZUS.

The Ministry of Finance made a decision to decrease the amount of payment. Thus, private entrepreneurs will have to pay less if their annual turnover does not exceed the sum of thirty times the minimum monthly salary (2100 zlotys in 2019). A lower turnover leads to lower ZUS payments. This will help more companies live longer.

To benefit from the changes, an entrepreneur should re-register in the ZUS office by January 8, 2019. This can be done online. However, business owners and experts criticize the short interim for submitting the documents because many entrepreneurs don’t know about the changes. The Ombudsman for Small and Medium Enterprises asked the government to prolong the period.

Note that the new regulations do not apply to the companies which were less than 60 days old as of January 1st.