English Section

Polish gov't approves plan to cut health insurance contributions for business owners

20.11.2024 10:30
The Polish government has approved a long-awaited plan to reduce health insurance contributions for business owners.
Image by Henryk Niestrój from Pixabay
Image by Henryk Niestrój from Pixabay Pixabay License

The new regulations are expected to take effect on January 1 and benefit around 935,000 business owners, particularly those with lower incomes or financial losses.

The most significant change is a reduction in the minimum base for calculating health insurance contributions, which will be lowered to 75 percent of the national minimum wage.

This adjustment applies to business owners taxed under the progressive scale, flat tax or tax card systems.

Under the new rules, taxpayers earning up to 1.5 times the average monthly wage in the enterprise sector will pay 9 percent of 75 percent of the minimum wage as their health insurance contribution. Earnings exceeding this threshold will incur an additional 4.9 percent contribution on the surplus.

Business owners taxed under the lump-sum system will also pay 9 percent of 75 percent of the minimum wage on monthly revenues up to three times the average wage in the enterprise sector. Revenue above this threshold will face an extra 3.5 percent contribution.

For those using the tax card system or those who assist in non-agricultural business activities, the contribution will remain a flat 9 percent of 75 percent of the minimum wage.

The government estimates that entrepreneurs with the lowest incomes or operating at a loss will save approximately PLN 100 (USD 25) per month under the new system.

However, this reduction will lead to a shortfall of around PLN 945 million (USD 236 million) for the National Health Fund (NFZ). To address this, the government has allocated sufficient funds in the country's 2025 budget to cover the deficit.

The government approved the amendment during a meeting on Tuesday, with details published online by the Prime Minister’s Office, state news agency PAP reported.

The government framed the reforms as part of a broader effort to reduce the financial burden on entrepreneurs and encourage economic growth. According to the statement, the reforms aim to balance lower contributions for small business owners while maintaining the financial stability of the healthcare system.

These changes, taking the form of an amendment to the Publicly Funded Healthcare Benefits Act, represent a shift in how health insurance contributions are calculated and distributed, and the government has emphasized that they are intended to foster a more equitable system for business owners.

(rt/gs)

Source: IAR, PAP