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Poland's ZUS/NFZ payments for businesses


Braveheart16 17 | 122
29 Apr 2018  #1
It would appear that small and large businesses are expected to pay the new ZUS/NFZ rate of 1200zl per month irrespective of how much there monthly earnings are. I understand that there are discounts available which could bring the figure down to about 500zl, but nevertheless it seems to be unfair on people trying to set up a business.

In France and perhaps other countries businesses particularly small ones pay for health service costs based on their earnings. So if you have a bad trading month you only pay a percentage of what you earn. This to me seems to be a much fairer and practical system than what is currently in place in Poland. As a result there is little incentive to set up a business in Poland when the fixed monthly charges for ZUS/NFZ are so high.
kaprys 2 | 1,870
29 Apr 2018  #2
It's always been like that. You can deduct part of składka zdrowotna and spoleczna from your monthly tax but by and large, ZUS doesn't give a damn and wants your money regardless of what you earn, even if you make less than you need to pay them.
Dougpol1 30 | 3,066
29 Apr 2018  #3
ZUS doesn't give a damn

To be more specific, successive hopelessly inept governments don't give a damn. It's a case of, if you are a successful S.C. with relatively large turnover, thanks for the 1,200 zl.

If you earn, say 3000 zl in a slack month, through whichever reason, then, tough luck, loser! And the voters (the rest of Poland of course don't want to think for themselves and are happy to be employed by some entity) are not affected so it's not their problem.

Scandalous. I tried working for the wife for 3 years, but the tax bill was even higher than the 1,200 zl payments, so I'm back with the ZUS criminals. My advice to the OP is to earn lots, then he can buy up forests or other tax dodges and then he wont be paying through the nose like the rest of us suckers.
polishinvestor 1 | 362
29 Apr 2018  #4
You can get by without paying ZUS if you aren't living in the country but if you are you do get a 2 year initial reduction down to 500zl/m before it goes to 1200zl/m. Tax is something else but tbh if you are worried about not making the ZUS maybe the potential for your earnings isn't great enough to consider that line of work or business any further, certainly if ZUS payments are still a worry at the end of the 2 year discount period.
Dougpol1 30 | 3,066
29 Apr 2018  #5
maybe the potential for your earnings isn't great enough to consider that line of work or business

A pretty spurious argument if you ask me. For example, some ways of making a living are seasonal by nature - but lets not let that stop the government from ignoring that simple fact and screwing people over. It's not as if they didn't have other alternatives, like copying the British model, as the OP has stated.

If they went after tax evasion, which we all know is rife, instead of going through the motions of doing so, then there could be a fair National Insurance scheme.
polishinvestor 1 | 362
30 Apr 2018  #6
You can suspend your business for up to 3 years during which period you no longer need to make ZUS payments. ZUS is massively underfunded looking at the long term picture, so its unlikely any changes are going to be in our favour.
delphiandomine 83 | 17,679
30 Apr 2018  #7
The problem with ZUS is that successive governments have failed to deal with the real issue, which is that hard currency pensions are being paid to people that only earnt in soft currency. Add the special pensions for miners and other politically sensitive groups, and you understand why it's impossible to reform the system.

Morawiecki keeps talking about linking the payments to earnings, but it's clear that the money lost needs to be replaced - and increasing ZUS further is a no go.
kaprys 2 | 1,870
30 Apr 2018  #8
Nothing will be done now. They have spent too much money. They need money from someone.
delphiandomine 83 | 17,679
2 May 2018  #9
Nothing will be done now.

The suggestion that keeps going around is that ZUS for sole traders should become proportional to earnings, but even that carries significant problems. Morawiecki is pushing for it, but there seems to be simply no money in the system to do it.

Slovakia has an interesting system that mandates minimum payments of around 180-200 Euro/month (I don't remember the exact number), but it's a strange system because paying the minimum for 30 years (you need to work for 30 years to get a pension there) doesn't actually guarantee you a pension if you haven't made high enough contributions.

On the other hand, bureaucracy is reduced by allowing a flat rate deduction of 450 Euro/month for expenses without question. If you want to deduct more, you need to account for things properly.
Dougpol1 30 | 3,066
3 May 2018  #10
Yes, yes Delph, but in Britain when I claimed for petrol for example, the petrol bills alone were proof enough, as long as they were deemed realistic. Non of this instant recall NIP number business and invoicing, and the subsequent long queues at petrol stations that Poles are so fond of.
polishinvestor 1 | 362
3 May 2018  #11
In Poland cash transactions are still very popular and with a less stringent tax system, there is a lot of room to cheat the tax man. Hence the requirement of business details on the petrol receipt. You can imagine the avenues for cost building. A lot of things that just aren't worth your while in the UK are actually worth doing if you have a lot of time but little cash flow and here is why the tax authorities stay on the offensive given that there is so much evasion.
OP Braveheart16 17 | 122
4 May 2018  #12
My thought was to look at ways to encourage entrepreneurs/small businesses to set up a business be it small or large. In having a system of ZUS/NFZ business payments which is fair and based on earnings rather than just a set fee, would in my view help the Polish economy and so on. At present there is very little incentive for people to set up a business with such high ZUS/NFZ costs....I believe that small businesses are essential to improving the economy....the alternative is to sell goods at the market, which for some people is not something they wish to do and with limited returns and travel costs etc. I don't believe that big businesses are the only way forward.
delphiandomine 83 | 17,679
4 May 2018  #13
So, how would you replace the lost revenue to ZUS in this case? The estimate is that an earnings based system would result in a loss of around 10bn PLN a year to ZUS, which means an additional 10bn has to be paid from the state budget.
cms neuf - | 952
4 May 2018  #14
Remove or increase the cap on the employers ZUS - it wouldnt hit that many people and those who were hit would not be that price sensitive.

Raise the employees ZUS a couple of percent so that in zloty terms they pay a bit more and bring them closer to the amount paid by self employed (employees are more likely to use the system)

Reduce the fixed ZUS rate but be more strict about petrol and cars claimed for business use - i dont think i know a single person who is honest about it.
OP Braveheart16 17 | 122
6 May 2018  #15
Yes it is a question of how you replace lost revenue to ZUS but to be honest I would leave that to the politicians to work out. At the end of the day I am sure there are other ways to collect the lost revenue, and with small/large businesses no longer penalised with high ZUS/NFZ costs it would encourage entrepreneurs to set up businesses. As a result businesses would have better conditions in which to work in and would continue providing more choice to the consumer and go a long way to improving the economy.

It just needs the will of government to introduce a fairer system and realise the benefits of increasing the number of businesses. Successful small businesses grow into large businesses and continue to create jobs, revenue etc....but they need the right conditions.
jon357 63 | 14,134
6 May 2018  #16
So, how would you replace the lost revenue to ZUS in this case?

Scrapping KRUS would be a start, as would heavily taxing under-used land and second homes. People would still figure out a way of getting round it though. A high level of road tax would also help.
delphiandomine 83 | 17,679
6 May 2018  #17
Scrapping KRUS would be a start, as would heavily taxing under-used land and second homes.

I wouldn't even scrap KRUS, I'd just make it that it only applied to direct farming activities with no other possibility of using it for non-farming activities. If you indulge in any other work, you have to pay ZUS, end of story. With land, definitely, and even more so with second homes.

At the end of the day I am sure there are other ways to collect the lost revenue

Are there? PiS are trying to figure it out and they can't. It's about 10 billion a year, which right now is around 20% of the yearly shortfall in ZUS. You could increase ZUS contributions, but that's a guaranteed way to enrage the electorate.

Raise the employees ZUS a couple of percent so that in zloty terms they pay a bit more

I'd actually like to see employers ZUS abolished and replaced with a system in that employees are solely responsible for paying. Self-employed people could pay on the same basis, which means that everyone is on an equal playing field - but I wonder how many people would be content with paying roughly 30% of their gross earnings to ZUS. Either way, voters would get a hell of a shock when they realise the true cost of their employment to the employer.

What surprises me is that people still believe that the money in ZUS is 'theirs'.
dolnoslask 5 | 2,454
6 May 2018  #18
and even more so with second homes.

Any Idea of how many Poles can afford the luxury of a second home, the only ones I know of either work in Brussels or are politicians
delphiandomine 83 | 17,679
6 May 2018  #19
Quite a lot. Try visiting places like Bieszczady, Mazury or Beskidy - they're full of holiday homes.

A lot of people also own 'empty' holiday homes that are actually used for Airbnb and the like.
gumishu 11 | 5,015
6 May 2018  #20
dolnoslask - you live in a relatively poor area, there are many people in Warsaw that are quite affluent and can afford summer homes (my uncle in Mazury sold a piece of his land by the lake to a Varsovian and built a holiday home for the guy and it was in the early 90's)
delphiandomine 83 | 17,679
6 May 2018  #21
Just an example - otodom.pl/oferta/ladny-domek-nad-jeziorem-ID3BsK4.html#90674c1b02

What's 100,000zł for a holiday house if your mortgage is already paid and you inherited a large flat in the city? For someone in a big city working as a manager in a corporation, it's nothing.
polishinvestor 1 | 362
6 May 2018  #22
Reduce the fixed ZUS rate but be more strict about petrol and cars claimed for business use - i dont think i know a single person who is honest about it.

Mixed use just affects the VAT payment, while you cant have more than one car if its a single person business. So its more about income tax here, but you can't argue with people including it as a cost as few business are run without the help and use of a vehicle so its only right that costs can be claimed. And to be honest a lot of the loopholes here have been closed.

Raise the employees ZUS a couple of percent so that in zloty terms they pay a bit more and bring them closer to the amount paid by self employed

Businesses would pressure employees into self employment, absolving them of many responsibilities.
Enforcing ZUS payment and confirming employee status within businesses would be a way to go, then of course there is the spend side which is ripe for adjustment but is likely to stay bloated since it keeps so many in employment.
dolnoslask 5 | 2,454
6 May 2018  #23
many people in Warsaw that are quite affluent

But I think it is a very tiny proportion of the population who are in that position certainly not enough of them to be taxed to cover the cost of bringing in the money required to beef up the struggling health care system as delph suggested.
gumishu 11 | 5,015
7 May 2018  #24
you are probably right
cms neuf - | 952
26 Nov 2018  #25
Rates are going up again - a 700 zloty per year increase :((

It's onky a few months ago the govt was promising to lower the rates
BRguy
21 Dec 2018  #26
Merged:

Contribution to the NFZ



Hello.

How can I pay contributions and be insured by the NFZ? Their website is in Polish only, I don't understand.

nfz.gov.pl

How much do you pay per month, if you're a self-employed worker? Students? Unemployed people?

I'm Polish citizen by descent, living abroad - thank you in advance for your answers, might this post be useful for people like me.
mafketis 20 | 7,331
21 Dec 2018  #27
living abroad

then what do you need NFZ for?


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