- Commissioned by the Useme.com platform, the research company UCE Research conducted a survey on a representative sample on August 3-5, 2024 and asked Poles how they view the issue of contributions for all contracts.
- In response to the question: Should the government enter into negotiations with the European Commission on changing the wording of the so-called milestone so that all contracts for specific work and mandate contracts in Poland will not be subject to the Social Insurance Institution (ZUS) in the near future, the majority of respondents (58.9%) answered yes, of which 25.3% definitely yes and 33.7% rather yes.
- Only 14.6% of respondents, or one in seven, responded negatively, of whom 5.7% responded definitely not, and 8.9% rather not. 26.4% of respondents responded I don't know/hard to say.
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ZUS proposes a change to the definition of micro, small and medium-sized enterprises
Poles oppose social security contributions for contracts
– The government's main argument so far in the matter of social security contributions for contracts has just been dispelled. These answers leave no illusions. The people who work on these contracts, including freelancers, as well as companies – contractors and employers, and also ordinary Poles are against the contribution of all contracts. That is why the majority of society expects the government to start renegotiating with the European Union the provisions of the National Reconstruction Plan regarding the full contribution of all civil law contracts, including contracts for specific work. And that this is possible and realistic to do, is shown by the spring actions of Prime Minister Tusk in the case of farmers and the abolition of the provisions on the necessity of land fallowing – one of the milestones in the KPO – says Przemysław Głośny, CEO of Useme.com.
– It is worth recalling that the social security contributions for all contracts, including contracts for specific work, will mean that Poles working on these contracts will earn as much as 1/3 less, or if companies were to take over all the costs of the contracts themselves, then the companies would pay more, as much as 40%. In such difficult economic times, both creators, contractors and companies are unable to bear such costs. As a result, the state budget and ZUS will not only not gain additional money, PLN 4.2 billion, which experts are talking about in the case of full contributions for all contracts for specific work and services, or the amount of PLN 0.6 billion in the case of social security contributions for contracts for specific work alone, but it may lose much more in the form of a reduced tax and contribution source. – adds Głośny from Useme.com.
In addition, 2/3 of freelancers in Poland work under an employment contract and earn extra money only with small orders up to PLN 3,000 per month (nearly 40% of freelancers receive up to PLN 1,000 per month, and 27.7% of freelancers earn between PLN 1,000 and PLN 3,000 per month) and the fact that they work primarily for micro-enterprises and small and medium-sized enterprises, whose economic situation has deteriorated significantly in the last two years.
According to Useme.com, the amount of PLN 4.2 billion that the state budget, and de facto ZUS, can potentially gain is not a large amount on the scale of public finances. In 2023, ZUS collected contributions exceeding PLN 400 billion. Therefore, PLN 4.2 billion of additional contributions is an increase of only 1%. In turn, if we wanted to calculate the impact of the increase in the contribution to the government subsidy to ZUS, last year it amounted to PLN 36.5 billion, and relate it to the impact on the state budget, the calculations are as follows. In 2024, revenues are planned at PLN 682 billion, and expenditures around PLN 866 billion. Therefore, based on this data, we are talking about only an additional 0.58% of budget revenues or 0.46% of expenditures. Revenues from contributions to all contracts are a trace, negligible income or cost, ranging from 0.46% to 1%, depending on whether we are talking about ZUS finances or the state budget.
Why does the Polish government intend to impose contributions on all contracts?
One of the main reasons why the government plans to impose social security contributions on all contracts, including contracts for specific work, is the implementation of the National Reconstruction and Development Plan (KPO). The Ministry of Family, Labor and Social Policy argues that this is necessary because it wants to implement part of the so-called milestone from the KPO, reported to the European Commission by the Polish administration, which is to serve to combat the so-called segmentation of the labor market. It is worth mentioning that the previous PiS government included it in the list of milestones. And it is not true that it was the idea of the Union or the European Commission.
Milestone No. A71G assumed that the reform was to enter into force in 2023, but Mateusz Morawiecki's government postponed its implementation, primarily out of concern about the political cost of such a move and social opposition. The current government not only did not abandon this reform, but announced that it intends to introduce fundamental changes from January 1, 2025.
As a result of the planned reform of the labour market, the changes will affect at least 2.3 million people working under contracts for services and similar contracts, including 330,000 freelancers working primarily under contracts for specific work, as well as over 2.6 million small and medium-sized companies that use primarily the services of freelancers.
This revolution in the labor market assumes that all civil law contracts, i.e. contracts for services and specific work, will be covered by full social security contributions, regardless of the income earned, with the exception of contracts with students under 26 years of age, and the abolition of the principle of paying social security contributions from the minimum wage under civil law contracts. Which, in the currently very turbulent situation for many small and medium-sized companies, with which freelancers in Poland primarily cooperate, would often mean their end. With the minimum wage increasing by as much as 40% in the last 2 years and another from January 1, 2025 by another 7.5%, CPI inflation at around 40% in 3 years and drastically increasing operating costs, many small, domestic companies will simply go bankrupt.
