Poland: Social security contribution holidays for B2B contractors
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Poland
As a partner and Head of our Employment team in Warsaw, I am an experienced employment law expert specialised in litigation, including civil and criminal cases involving corruption and trade secrets.
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On 7 June 2024, the President of the Republic of Poland signed the so-called Contribution Holiday Act for entrepreneurs and ordered its promulgation in the Journal of Laws. The law grants certain entrepreneurs the right to be exempted from paying social security contributions for one month per year.
What is the contribution holiday all about?
A contribution holiday consists in exempting an entrepreneur for one month of the year from the obligation to pay contributions to social insurance, the Labour Fund, and the Solidarity Fund.
During the contribution holiday, social insurance premiums will be calculated according to the lowest contribution assessment basis applicable to the entrepreneur and will be paid by the state. The value of the contributions paid by the state will constitute de minimis aid.
An entrepreneur using the contribution holiday will be able to continue to actively conduct their business, including actively providing services and issuing invoices.
To use the contribution holiday, an entrepreneur will have to file an application to ZUS in the month preceding the contribution holiday. The application system is still being developed and will be launched soon.
Who will be eligible to the contribution holiday?
Entrepreneurs who are registered in the Central Registration and Information on Economic Activity (CEIDG), employ up to nine persons in addition to themselves, and have annual revenues of up to EUR 2 million, will be able to benefit from the contribution holiday.
Who will not benefit from the contribution holiday?
Contractors who performed services for their former employer in the given or previous calendar year will not benefit from the contribution holiday, if the activities falling within the scope of these services overlap, even partially, with the scope of duties previously performed under an employment relationship.
When can contribution holidays be applied for?
The new law on contribution holidays will enter into force four months after its publication in the Journal of Laws. The first applications for contribution holidays for 2024 will be possible at the end of Q3 or the beginning of Q4 of 2024.
