MDB Recruitment Taxation

Taxation:

The salary specified in the employment contract is usually specified in the gross amount. However, the amount the employee receives is actually much lower. Why is this happening? Well, the remuneration is reduced by social security contributions, health insurance and income tax. ZUS contributions are deducted from the salary in order to ensure social security. Social insurance covers old-age insurance, disability insurance, sickness and maternity insurance (sickness insurance), and insurance against accidents at work and occupational diseases (accident insurance).

In order to determine the net wage (payable) as mentioned above, the relevant social security contributions must be deducted from the employee's income. However, not everyone knows that only some of them are financed from his salary. The contributions paid by the employer do not matter. They are only determined on the basis of gross salary, and the employer pays them from his own funds.

social security contributions:

The exact percentages of social security contributions are as follows:

pension contribution - 19.52% of gross salary - with half of which is paid by the employee and the other half by the employer
disability insurance 8% of gross salary - the employer pays 6.5%, and the employee 1.5%
accident insurance 0.4-3.6% of gross salary - the employer covers the whole
sickness insurance - 2.45% of gross salary - the employee covers the whole
health insurance - 9% of salary less social security contributions - the employee covers the entire amount

In addition to ZUS contributions, an advance on income tax is also paid on the employee's gross salary. It is worth knowing that persons under the age of 26 are exempt from the necessity to make an advance payment.

MDB Junction Social security contributions

SOCIAL INSURANCE:

The contract of mandate also constitutes an entitlement to social insurance. The client deducts contributions for retirement, disability, sickness and accident insurance. Thanks to this, the contractor may receive, for example, a sickness benefit or a retirement pension. Therefore, every person working under a mandate contract is obligatorily subject to retirement, disability and accident insurance for the entire duration of the contract - from the day marked as the commencement date to the date of termination or expiry of the contract. On the other hand, sickness insurance is voluntary and covers the contractor from the date indicated in the application for this insurance.

Pursuant to the Act on the Social Insurance System, the interest rates of contributions for retirement, disability and sickness insurance are the same for all insured employees and are respectively: 9.72%, 1.5% and 2.45% of the calculation basis.

Type of contribution	Interest rates	The worker covers	Employer covers
For retirement insurance	19,52 %	9,76 %	9,76 %
For disability insurance	8 %	1,5 %	6,5 %
For sickness insurance	2,45 %	2,45 %	-
For accident insurance	1,67 %	-	1,67 %
Health insurance	9 %	-	9 %

	Contract of employment	Contract of mandate	Contract work
Legal regulation	Labor Code	Civil Code	Civil Code
Types of contracts, duration	Unlimited contracts: - for an indefinite period Term contracts: - for a limited period - for a trial period - for the duration of a specific job - for replacement	The mandate contract is not subject to any time constraints - its time duration depends on the will of the parties this contract.	The contract for specific work may be concluded for the period chosen by the parties. Most often, the parties specify the date by which the work is to be completed and delivered to the ordering party.
ZUS contribution	Compulsory insurance: - pension - disability - accident - health - sickness	Compulsory insurance: - pension - disability - accident - health Voluntary: - sickness insurance (it is covered at the request of an employed person), - if the order is performed outside the principal's seat - no accident premium is charged. Pupils and students up to the age of 26 are not covered by insurance with the Social Insurance Institution under the mandate contract.	There is no obligation to pay social security contributions. The employer is obliged to pay social security and health insurance contributions for a specific work contract if it is signed with its own employee.
Notice period	Employment contract for a specified period - 2 weeks Employment contract for an indefinite period the notice period depends on the employment period, it is: - 2 weeks - for a period of employment shorter than 6 months, - 1 month - for a period of employment of at least 6 months - 3 months - with a period of employment of at least 3 years	The contract of mandate may be unilaterally terminated at any time by either party. art. 746 of the Civil Code	The contract for a specific work expires after the work has been performed and the payment is made. The Code provides for the possibility of early termination of the contract. The contracting authority may, at any time, until the work has been completed, unilaterally withdraw from it.