The Senate approved contribution holidays. What does it mean for traders?

On 22 May 2024, during the plenary meeting, the Senate discussed the amendment to the Act on the Social Insurance System relating to contribution holidays. In order to take advantage of holidays, traders will have to submit an application to ZUS (Social Insurance Institution) in the month preceding the month of their choice. The solution will be available to traders paying social insurance who employ up to 10 people. The Act introduces the possibility to stop paying social security, Labour Fund and Solidarity Fund contributions for one selected month in a calendar year.

Contribution holidays – a new solution from October 2024

The Act aims to improve the financial situation of businesses, increase their competitiveness, but above all, to facilitate doing business. The solution will come into force on 1 October 2024, so the first traders will be able to enjoy contribution holidays in November.

The main assumptions of the act introducing contribution holidays:

• Traders will be able to suspend the payment of contributions to social security, Labour Fund and Solidarity Fund for a period of 1 month in a calendar year
• When taking advantage of the contribution holidays, it will not be necessary to suspend operations, a trader will still be able to conduct business and issue invoices as normal
• Contribution holidays will not affect trader’s entitlement to sickness benefit or the amount of their retirement and disability benefits
• Contribution holidays will be available regardless of the form of income tax settlement
• Contribution holidays will be provided under de minimis aid
• Contribution holidays will not cover health insurance contributions

The following persons will benefit from the contribution holidays:

• Sole traders, including self-employed persons, who are entered in CEIDG (Central Register and Information on Business Activity) and pay contributions for no more than 10 insured persons (including the sole trade) and generate revenues of up to EUR 2 million per year
• Partners in civil partnerships, if they meet the other criteria specified in the Act entitling them to benefit from suspension of payment of social security contributions

However, the following persons will not benefit fromthe contribution holidays:

• Self-employed persons performing activities for their former employers (this is to prevent forced self-employment)
• Traders who are shareholders in commercial law companies registered in the National Court Register (KRS)

Contribution holidays – electronic applications

The condition to enjoy contribution holidays is to submit an application to the Social Insurance Institution for exemption from the obligation to pay contribution in the month preceding the month of exemption selected by the trader.

Submitting an application for contribution holidays:

• Only the electronic form of the application will be available. A trader will submit the application through PUE ZUS system by filling in a dedicated form

ZUS will verify the application:

• ZUS will review the application to see if trader complies with eligibility criteria
• Inf verification is positive, ZUS will automatically grant the relief
• A negative decision will be issued if it is found that trader is not entitled to contribution holidays

Trader obligations during contribution holidays:

• Despite the exemption from paying social security contributions, a trader will be obliged to submit a settlement declaration and personal monthly reports for a given month
• Deadline for submission: by the 20th day of the month

The new solution should be assessed positively, it will contribute to strengthening the competitiveness of micro-enterprises. The Act will enter into force on the first day of the month following the lapse of 4 months from the date of publication.

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