With each passing year, ZUS (Social Insurance Institution) contributions are on the rise. The same will be true in 2021. Once again, an increase is expected, although it won’t be as substantial as in 2020. How much will the ZUS contributions be in 2021? How have they increased over the past years, and how do they compare to the minimum wage?
How much will the ZUS contributions increase?
Individuals conducting business activities have an obligation not only to pay their own contributions but also to contribute on behalf of their employees. Contributions are mandatory – they determine access to healthcare, eligibility for sickness benefits, pensions, and the amount of future retirement benefits. The contribution amount increases every year. However, in 2021, it will not increase as much as it did in 2020. It will be higher by 15.60 PLN, amounting to around 1500 PLN. It is important to note that the amount of health insurance contributions will only be known in 2021, as it depends on another indicator that will be published in January 2021. Therefore, we still have to wait for the final amount of contributions. The increase in the contribution amount is related to the expected increase in the average salary. From the new year, it will be higher by 200 PLN. Initially, it was supposed to increase more, but the coronavirus revised these plans. For this approximately 1500 PLN, the following contributions will be included, in addition to the health insurance contribution whose amount is not yet known:
- Pension contribution amounting to 615.93 PLN;
- Disability pension contribution amounting to 252.43 PLN;
- Accident insurance contribution in the amount of 52.70 PLN;
- Contribution to the labor fund in the amount of 77.31;
- Sickness insurance contribution at the same amount as the labor fund;
The contribution amounts are determined based on the average salary, which in 2021 is expected to be 5259 PLN, and the contribution base is 60% of this amount, i.e., 3155.40 PLN.
The increase in contributions over the years
Contributions increase every year due to rising salaries. However, in 2021, the increase in contributions will be the lowest in… 11 years! A similar increase last occurred in 2010, but at that time, it was due to a change in the way contributions were calculated. We experienced a significant increase in contributions in 2020, as they rose by 114 PLN due to a substantial increase in salaries. Over the past 10 years, the amount of contributions has increased by 60%. In 2011, contributions were just under 900 PLN. In 2012, they were already 10.25% higher, approaching a thousand PLN. In the following years, the amount of contributions exceeded a thousand PLN. In 2013, contributions increased by another 4.66%. In 2014, the increase was minimal, at only 1.5%. In the following year, contributions saw an increase of 5.08%, and in the next one, 2.38%. The year 2017 brought a 4.55% increase in contributions, and in 2018, contributions increased again by 5.08%, just like in 2015. In recent years, the amount of contributions has increased successively by just under 7% and 8.66%.
The relationship between contributions and the minimum wage
It’s worth noting that in 2021, new entrepreneurs will pay higher ZUS contributions. Of course, after starting their business, they are completely exempt from paying contributions for the first 6 months. However, after this period, they enter the period of so-called preferential contributions. Preferential contributions are ZUS contributions at a reduced rate that new entrepreneurs pay for the next 24 months. The amount of these contributions depends on the minimum wage. Currently, the minimum wage is 2600 PLN. However, it seems that in 2021, the minimum wage will increase to 2800 PLN. This is still less than initially planned. In 2021, the government wanted to raise the minimum wage to 3000 PLN, but the coronavirus epidemic prevented this, causing significant economic losses after the spring lockdown. Therefore, the minimum wage will increase by 200 PLN, or 7.7%. The same increase will apply to the preferential contributions for new entrepreneurs who have been operating for more than six months. However, what if there were no epidemic, and the economy functioned normally throughout? The minimum wage would have increased to 3000 PLN, which is an increase of 400 PLN or 15%. In that case, the preferential contributions would have been much higher. Therefore, new entrepreneurs, especially those running small businesses, can breathe a sigh of relief. So, how much exactly will these preferential contributions amount to? Their basis is 30% of the minimum wage, which is 780 PLN. Therefore, the reduced preferential contributions will be 609.14 PLN per month.