[Poland] Higher write-offs for the Social Benefits Fund (ZFŚS). Defreezing the fund, benefits for employees

The amendment to this year’s near-budget Act provides for the unfreezing and increase of write-offs for the Company Social Benefits Fund (ZFŚS). For employees whose employer creates such a fund, this means the return of the payment of, inter alia, leave benefits.

Higher write-offs for the Company Social Benefits Fund as of July 2023

According to the amendment to the ‘Around the Budget’ Act, Article 5l of the Act of 4 March 1994 on the Company Social Benefits Fund has been given a new wording. Namely, as of July 2023 (with retroactive effect), the basis for calculating the write-off for the Social Benefits Fund is the amount of PLN 5104.90, i.e. the amount of the average monthly remuneration in the national economy in the second half of 2021.

It should be recalled that prior to the amendment, the basis for calculating the write-off for the Social Fund was the amount of PLN 4434.58, i.e. the amount of the average monthly remuneration in the national economy in the second half of 2019.

The table below presents the individual amounts of the mandatory write-offs for the Social Benefits Fund, from 1 July 2023 to 31 December 2023:

An amendment to this year’s 2023 Around the Budget Act provides that employers will pay write-offs by 30 September 2023 with the increase in the write-off to take effect retrospectively as of 1 July 2023.

On 2 August 2023, the amendment to the Around the Budget Act (Act amending the Act on special solutions for the implementation of the Budget Act for 2023 and certain other acts) was signed by the President. The new provisions enter into force on the day following their announcement and were published in the Journal of Laws on 10 August 2023.

Learn more: End of the state of epidemic emergency – major changes for employers as of 1 July

What is the Social Benefits Fund and who has to set it up?

The Social Benefits Fund is a fund created by an employer, the resources of which are used to finance social activities carried out for the benefit of:

• employees and their families,
• pensioners (i.e. former employees) and their families,
• other persons designated by the employer.

The Company Social Benefits Fund is required to be established by employers:

• employing at least 50 employees
• employing at least 20 and less than 50 employees, provided that a request for the establishment of a ZFŚS is made by a company trade union organisation.

In both cases, the number of employees is determined as of 1 January of a given year in terms of full-time equivalents. At the same time, employers operating in the form of budget units and local government establishments must establish a Company Social Benefits Fund regardless of the number of persons employed.

The funds accumulated in the Company Social Benefits Fund account are used, inter alia, for:

• subsidising employees’ holidays (holiday pay or ‘per diems’),
• funding of cultural and educational activities,
• funding of sports and leisure activities,
• funding of childcare in crèches, children’s clubs, kindergartens and other forms
• funding of material or financial assistance, for example the purchase of Christmas parcels for employees’ children, assistance to employees due to accidental events
• repayable or non-repayable assistance for housing purposes for employees, for example, it may be a housing or renovation loan.

Fund resources not used in a calendar year shall be transferred to the following year. The transfer to the Fund’s bank account of the amount equivalent to the deductions made and the increases accrued for the calendar year in question shall be made by the employer by 30 September 2023, but by 31 May 2023, employers should have transferred an amount equivalent to at least 75% of the deductions.

Higher leave benefit from the Social Benefits Fund for employees

Leave benefit, or so-called ‘self-arranged countryside holiday’, is a cash benefit paid by an employer once a year to each employee taking a minimum of 14 consecutive calendar days of leave in a given calendar year.

Before the amendment, the basic holiday benefit from the Social Benefits Fund was PLN 1662.97 per employee, which is 37.5% of the average monthly pay in the national economy in the second half of 2019 (PLN 4434.58).

The Around the Budget Act has been signed by the President and published in the Journal of Laws, which means that the new regulations have come into force, and thus the amount of holiday benefit has increased to PLN 1914.34, i.e. 37.5% of the amount of PLN 5104.90, which is the amount of the average monthly remuneration in the national economy in the second half of 2021. The rise amounts to PLN 251.37 in relation to the previously effective amount.

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