8 kwietnia 2016
Doing business in Poland. How is the social security system formed
Social security constitutes all means and public activities, by which the society tries to protect its members against the threat of inability of satisfying important and regarded by the most common needs. Social security system ensures its citizens safety. It constitutes a way of a man’s insurance from poverty, in which a man can fall into, because of inability to work or inability to find a job.
The means of social security are: social security (insurance method), social supply (supply method), social help (caring method). Four elements, that are taken into account, when it comes to differentiate these methods are: hedger, the entitled, the finance entities, benefits.
For people who are planning set up a business or for people whose already running it, the most important thing are costs that are a obligatory part of the social security system. This subject will be considered below.
The social security includes old-age pension insurance, disability insurance, sickness insurance, work accident insurance and health insurance. The social security system has also few features, which are: occurrence contribution, common fund, identified risk, detriment and benefit.
Payers are obliged to pay contributions. The Social Insurance Act however does not have the general definition of a payer. In the 4th Article of the 2nd Bill from the 13th of October 1988 of the Social Security System , the persons who are payers are mentioned thoroughly. From the practical point of view, one of the most important payers is an employer, who is one of the payers, according to the Act. The term of an employer is understood much more generally than in the Labour Code. This is an organisational entity, even if it does not have a legal personality, and also a natural person- if these entities take on workers. Employer, understood in this way is a payer in relation to employed workers.
Moreover, an employer understood in this Act is also a person who employs based on the mandatory contract or other contracts with third party (for example contract for specific work, contract of agency). In consequence, he is obligated to pay contributions as well.
The insured persons however are natural persons, who have at least one insurance (old-age pension insurance, disability insurance, sickness insurance, work accident insurance or health insurance). The largest group of the insured are employees. Employees, with some exceptions, come under a mandatory social insurance of any employment relationship.
Besides workers who are employed based on the labour contract, committed to old-age pension insurance and disability insurance are among others:
- persons who are working based on mandatory contract or agreement of agency,
- persons who are working based on other contracts, which are similar to the mandatory contract, according to the Civil Code rules,
- persons who are leading non-agricultural business and cooperating persons with them;
- persons who are on the maternity leave or getting the maternity allowance.
It is also vital that the pupils and the students under the age of 26, who don’t come under compulsory insurances, if they work on the basis of the civil law contracts. Moreover, persons who are not obligated to pay contributions are judges, prosecutors, farmers and some other countries’ citizens, who don’t have a permanent residence in Poland and they work on diplomatic missions, consular posts, missions, special missions or international organisations. They are also volunteers and members of management in trading companies but except of associate.
The maximum annual amount of old-age pension insurance and disability insurance contribution calculation basis is thirty-fold projected average monthly salary in the national economy which actually is 121 650,00 PLN.
The amount of contributions to the old-age pension insurance, disability insurance and sickness insurance are expressed in the interest rate, which is the same for all insured persons. On the other hand in case of work accident insurance the interest rate is varied and depends on the level of occupational risks.
The interest rates for contributions are:
- generally 19,52% of calculation basis – old-age pension insurance;
- 8,00% of calculation basis – disability insurance;
- 2,45% of calculation basis – sickness insurance;
- from 0,40% to 8,12% of calculation basis – work accident insurance.
The social insurance contribution calculation basis can be the actual revenue, the declared revenue or the definite amount in the Personal Income Tax Act.
A payer sends contributions with additional formalities no later than:
- the tenth day next month – for natural persons who pay contributions only for themselves;
- the fifth day next month – for budgetary institutions;
- the fifteenth day next month – for other payers.
In Poland, Social Insurance Department is responsible for social insurance in the Ministry of Labour and Social Policy. The Social Insurance Department is especially responsible for developing draft regulations related to social insurance, adapting the Polish social insurance law to EU law and to the standards of the conventions and recommendations of the International Labour Organisation and developing the assumptions of the social insurance policy.
Tekst: Justyna Kowalska
8 kwietnia 2016