Company Social Benefit Fund

Company Social Benefit Fund (ZFŚS) is established by the employer under the conditions laid down in the Act of 4 March 1994 on company social benefit fund.

The resources of the fund (ZFŚS) are intended to cover the financing of social activities carried out to entitled persons.  They include:  workers and their families, pensioners (former workers) and their relatives and other persons designated by the employer. Money collected by social benefits fund are intended to finance specific social activities, i.e. leisure (e.g. holiday allowance), cultural and educational activity, sports and recreation, care for children (nurseries, children's clubs, kindergartens and other forms), in kind or financial assistance (e.g. the purchase of holiday packages for children, allowance due to unforeseeable events, etc.), and the repayable or non-repayable loan for housing purposes (e.g. housing loan, renovation loan)

The  employer shall lay down  specific terms and conditions for the use of social benefits, types of social activities and a list of persons entitled in its internal rules of procedure.  The employer shall agree the rules of procedure with the establishment's trade union body, in case of no such union, with a worker selected by the crew to represent its interests.


Who is obliged to create Company Social Benefit Fund

(ZFŚS) are required to set up employers with at least 50 employees and employers with at least 20 and less than 50 employees if a trade union organisation applies for it (number of employees shall be determined as at 1 January of the year in question calculated as full-time equivalents).  If in the abovementioned undertakings there is a collective labour agreement, the Act allows the possibility to take a decision not to create social benefits fund (ZFŚS). 

Others entrepreneurs hiring less than 50 employees, make a voluntary decision on the creation of social benefits fund (ZFŚS) . 

However, irrespective of the number of persons employed, employers conducting activity in the form of budgetary and general government are required to establish a fund (ZFŚS).


Financing the Fund

The Fund is established from a basic annual allowance in relation to the average number of employees.  The rate of basic allowance per one person employed amounts  to 37.5 % of the average monthly remuneration in the national economy in the previous year or second half of the previous year (the second half of the year shall be taken into account if the average remuneration for that period is higher compared to the first half-year). 


From the above general rule on the amount of allowance there are exceptions relating to: 


  • young workers - the amount of  basic allowance per one worker is in the first year of education 5 %,  in the second 6%,  in the third 7% of the average monthly remuneration in the national economy,
  • workers  carrying out work in special conditions or of special nature - the basic amount of allowance per worker is 50 % of the average monthly remuneration in the national economy,
  • workers with a significant or moderate degree of disability - the amount of the basic allowance per one worker may be increased by 6.25% of the average monthly remuneration in the national economy.

In addition, employers who exercise social care of pensioners, including those from closed establishments, may increase the Fund by 6.25 % of an average monthly remuneration for every retired person and pensioner entitled to such care.  While employers who set up the crèche or club and allocate for this purpose from the basic allowance the amount corresponding to 7,5 percentage point of that allowance, may increase the Fund per each person employed by 7.5 % of the average monthly salary provided that they allocate it to the children's nursery or club. 


The Fund is fed by: 

  • receipts from fees paid by individuals and organisational units  - using social activities: 
  • donations of natural and legal persons; 
  • interest on Fund resources; 
  • receipts from interest rate on loans for housing purposes; 
  • claims of liquidated occupational funds and social housing; 
  • revenues from sales, rentals and liquidation of fixed assets for social activities, in the part of the maintenance or restoration of occupational social facilities; 
  • proceeds from the sale and liquidation of houses and apartments in the part of maintenance works of the housing stock. 

Entrepreneurs may further increase resources from the Fund from net profit to be distributed, and cooperatives from a surplus balance sheet


Time limits for transfer of resources to the bank account of the Company Benefits Fund

Equivalent of allowances and increases charged per calendar year, the employer must transfer to the bank account of the Fund by 30 September of that year, by 31 May of that year he should transfer the amount of at least 75 % of equivalent of allowance. 


The employer starting the activity in the calendar year which is required to create the Fund, the Fund shall copy from the following calendar year.  If, on the other hand, the commencement of activity is in the course of a calendar year, as a result of the commercialisation, takeover, break-ups or a combination of a takeover of employees, the Fund should be created in the year of the start of operations. 

The funds transferred by the employer to the account of ZFŚP (and increasing) are included in the costs of the employer's activity.


Administration of the fund

Company Fund is administered by the employer and resources of the Fund unused in a given calendar year shall be transferred to the following year.  The resources of the Fund shall be collected on a separate bank account and may be spent only on very specific social objectives.  The resources of the Fund shall not be enforced, except when enforcement is carried out in connection with the obligations of the Fund. 

When completing  all the formalities connected with the Act, the employer in consultation with trade unions or representation of employees shall decide to liquidate the Fund,  unused resources of the Fund should continue to be used for social activities, until they are fully exhausted.  Resignation from the creation of social benefits fund does not imply automatically its liquidation.  The Fund operates as long as there are resources on its account.


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