28.07.2021 Labour law

[Poland] Health contribution in the Polish Order – draft legislation

The published draft of the New Order tax package includes previously announced changes to the way that health contribution is calculated and settled. The new provisions are due to come into force as from 2022.

The government has presented the first draft bill implementing the solutions of the New Polish Order, a socio-economic programme for the post-Covid period. One of the changes is a reform of the health contribution, more specifically a new way of calculating and settling the health insurance contribution, which will mostly affect people running their own business.

What will be the health contribution in the Polish New Order?

The government already informed in mid-May about the planned changes to the way the health contribution is calculated – read The New Order – planned changes to the health contribution, and on the 26th of July this information was confirmed in the first draft of the New Polish Order bill sent for public consultation.

The health contribution in the Polish Order – key changes:

  • Single flat rate of 9 per cent calculated on income for all except for:
    • entrepreneurs who settle on a flat rate of 19 per cent and report income lower than the minimum wage in a tax year, such entrepreneurs will pay a minimum contribution based on the minimum remuneration in force on the first of January of a given year (in the case of income higher than the minimum remuneration the contribution will be calculated from the total income),
    • lump-sum taxpayers, who will pay a health contribution in the amount of 1/3 of the lump-sum tax rate applied to their income,
    • tax card taxpayers who will pay a health contribution of 9% of the average remuneration in the enterprise sector in the fourth quarter of the previous year, including payments from the profits,
  • Lack of the possibility to deduct the contribution from tax for all without any exception as from 2022 (at present it is possible to deduct a part of the health contribution from tax – 7.75% of the basis of calculation).

The changes to the way the health insurance contribution is calculated and settled are due to take effect on 1 January 2022.

Learn more: Social Insurance Institution (ZUS) massively controls sick leaves

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