One of the types of contributions you will pay as part of your business activity is the Labour Fund contributions. It is a state fund, which is used to finance, e.g. activation of the unemployed.
Who do you have to pay a contribution to the Labour Fund for
Contributions to the Labour Fund are payable from the moment of taking out social insurance. It is compulsorily paid by virtue of both the employment contract and the mandate contract, as well as by virtue of the conducted business activity. If you conduct e. g. single-person company and hire employees, you are obliged to pay contributions to the Labour Fund for both yourself and your employees. The exception is when the contractor is a natural person and does not employ a single employee, in which case there is no obligation to pay Labour Fund contributions for persons employed under civil law contracts (e. g. on the basis of a mandate contract).
How much is the Labour Fund contribution and when it has to be paid?
The contribution to the Labour Fund is 2.45% of the base amount.
It is only payable if the basis of assessment exceeds the minimum wage for work. In the case of entrepreneurs, in most cases this basis of assessment is 60% of the projected average salary and it is always higher than the minimum wage. That is, you have to pay contributions to the Labour Fund. Only entrepreneurs who benefit from a "small ZUS" (basis is lower than the minimum wage) are exempted from the obligation to pay the Labour Fund contributions.
If an employee earns less than the minimum wage, the employer is exempt from paying a contribution to the Labour Fund for such an employee.
How to count Labour Fund contributions for less than a month
It may happen that you may have to pay a contribution to the Labour Fund for yourself or your employees for less than a month - i. e. if the contribution base for a given month is lower than the minimum wage (e. g. starting work in the middle of a month). In such cases, it is necessary to establish the basis for the assessment of pension contributions if the work was performed for a full month. If it is established that the basis would be at least the minimum wage, the Labour Fund contribution is due.
Recalculation for a full month shall not be made for part-time workers where the income of a part-time worker based on an assessment of pension contributions is lower than the minimum wage.
If insured person is compulsorily subject to pension and disability pension insurance on more than one account, the obligation to pay contributions to the Labour Fund arises when the total amount of pension and disability pension contributions on these accounts is at least equal to the minimum wage. So, if you are on a "small ZUS" but additionally you work as an employee, and the total amount of the basis of assessment for the activity and full time contributions is higher than the minimum wage, you pay the Labour Fund contributions.
When I don't have to pay Labour Fund contributions
The obligation to pay contributions (regardless of the amount of the contribution) does not apply to:
- workers with severe or moderate disabilities,
- persons who reached the age of at least 55 years for women and at least 60 years for men,
- employees who return after maternity or parental leave (in this case the employer is not obliged to pay the Labour Fund contribution for 36 months),
- employees hired on an employment contract after reaching the age of 50, where, prior to their employment, they were registered as the unemployed for at least 30 days (this exemption applies only to the employment contract and is valid only for 12 months from the first day of the month following the conclusion of the employment contract),
- hired unemployed people, who are not over 30 years old on the day of employment. The period of exemption from the Labour Fund contribution is 12 months, calculated from the first month after the conclusion of the employment contract.
- persons covered by KRUS insurance - if you are an entrepreneur insured with KRUS you do not have to pay the Labour Fund contributions.
Many examples of applying the rules in specific life situations can be found in the ZUS guide Principles of paying contributions to the Labour Fund, Guaranteed Employee Benefits Fund and Bridge Pension FundShare Print