Will 2020 ZUS contributions kill Polish companies?

Life of an entrepreneur in Poland can be tough. Especially when the authorities announce the official amounts of social insurance contributions. The 2020 numbers have just been released and, once again, the payments, which are made for every legally employed person, will go up. In fact, the government prepared the biggest hike of the contribution amounts in several years. For business owners in Poland, especially from the SME sector, this is bad news.

The payments are made every month towards Social Insurance Institution, or ZUS on behalf of every employee. The amount is calculated taking into consideration the person’s gross salary. For many years, entrepreneurs in Poland have been trying to convince the legislators that the cost of ZUS hamper business and the entire Polish economy.

ZUS payments depend on the prognosis of the average salary which is adopted every year by the government. Next year, the minimum salary goes up, average monthly renumeration goes up, and so does social insurance. In fact, in 2020, the cost of employing someone will be 10 percent higher than during 2019. Pension contribution for 2020 will be 612.19 PLN, disability contribution – 250.90 PLN, sick benefit contribution – 76.84 PLN, accident contribution – 52.37 PLN, and Labour Fund contribution – 76.84 PLN. There is also health contribution (which is tax-deductible), but the amount for 2020 is not yet known as it is calculated differently.

“The system is especially detrimental to small businesses. Adam Abramowicz, the Ombudsman for Small and Medium Entrepreneurs has already announced he is going to write a letter to Prime Minister concerning the issue. Let’s take a look into the systems in other countries and finally change this pathological, sick, unjust and immoral system of lump-sum ZUS payments for entrepreneurs” – he said in an interview.