7.02.2024 ZUS

[Poland] Overpayment or surcharge of ZUS contributions for 2023

On 5 January, ZUS began the annual mailing of information on the status of contribution settlements for 2023. Payers with underpayments will be obliged to cover the difference. Some of them have recently had to pay a surcharge on their health contributions as well. That is because ZUS has issued unfavourable decisions for entrepreneurs operating both in Poland and abroad.

Information on the status of payer’s account with ZUS

On 5 January, ZUS began providing information on the status of the 2023 settlements in the accounts of contribution payers. The information is addressed to more than 3.3 million contribution payers via the payers’ profiles on the ZUS Electronic Services Platform (PUE).

From this information, a payer who has settled and paid contributions in 2023 will learn whether the payer has an overpayment, an underpayment or a zero balance. ZUS will also provide data on the amount of contributions made by the payer in 2023 and the receivables that have been settled with these contributions. Read also: A month without ZUS contribution? New solutions for entrepreneurs coming up

Underpayment means that the amount owed must be settled. The payer can request that it be settled in instalments. If the amount is small, the arrears can be settled by increasing the current payment together with the accrued interest for late payment.

An overpayment, on the other hand, means that the payer can reduce the amount of the current payment on the next contribution due date. The payer may also request a refund from ZUS. The ZUS then returns the overpayment to the bank account saved in the payer’s account.

Health contribution surcharge: ZUS issues decisions for entrepreneurs

According to the Prawo.pl portal, ZUS, on the basis of tax returns, issues decisions imposing an obligation to pay health contribution surcharges for entrepreneurs operating both in Poland and abroad. Read also: Health contribution deduction in 2024 and Health contribution for companies on a lump sum in 2024 – how much will it amount to?

When deciding on the health contribution surcharge, ZUS takes two aspects into account:

  • conducting business in a country other than Poland through an establishment,
  • applying the method for avoiding double taxation in the agreement with the country in which the entrepreneur operates.

The double taxation avoidance method in force in the agreement with a given country may therefore significantly affect the surcharge on the health contribution in Poland. If an entrepreneur conducts business in countries with which the proportional deduction method applies in the agreements, a surcharge will most likely be required. On the other hand, entrepreneurs conducting business through an establishment in countries with agreements with which the exemption with progression method applies will not pay a surcharge on the health contribution in Poland.

To be more precise, the exemption with progression method means that income generated abroad is not included in the tax base in Poland and its amount affects the determination of the tax rate on the remaining income subject to taxation in Poland according to the tax scale.

In contrast, the proportional deduction method means that income from abroad is taxed in Poland, but the tax paid abroad is deducted from the tax due in Poland. This deduction is only possible up to the amount of tax falling proportionally on income earned abroad.

However, a contribution surcharge may not only be necessary on foreign income. Differences in the calculation of the tax base and the basis for calculating the health contribution may also become the grounds for a surcharge.

Read also: Entrepreneur’s health contribution in 2023

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