Polish Taxation: Part 3
Part time and small part time contract:
For the case of part time contract, we have to make a monthly tax advance, with the value of the income * 17%.
But if the value of the contract is below 200 PLN, this is called small contract and the total payable taxes for it will be 200*17%. then there is no need for any further computations and we do not put the salary of small jobs as a part of annual commutative salary.
this type of contract is for jobs like cleaning, or database management, SEO of a website for a small period of time. it is not an employment contract and the employee can not use the benefits of the holiday times, sickness insurance, benefit in kind, accident insurance, or any other employment coverage. this contract is better for the employer and not the employee.
Zosia signs a part-time contract for the amount of PLN 1,500 with the company ABC and the other with the company Small for the amount of PLN 180.
A. Calculate the number of tax advances made by the tax remitter, ignoring social and health insurance contributions.
B. Calculate the number of tax advances made by the tax remitter, taking into account social and health insurance contributions.
note: when the name of the small part time contract comes, the maximum value is 200 PLN. it is enough to have the contract that the value be below 200 PLN.
First of all, we make the calculation to show how to calculate the part time agreement.
Costs connected with agreement= 20% of revenue=300
taxable income=Revenue — cost= 1200 PLN
In the annual contract we have to
Tax advance in this contract: we should always make the 17% (first bracket always)as the advance for the Tax.
1200*17%= 204 PLN
please remember that we use the TAX free amount just for the annual calculation and not for advances.
Note: In the case of selling royality the value is 50%. for example for the case of sell of the right of publishing a book. for any other cases it is 20%.
Regarding the small part time contract:
Tax= 17%*180= 30.6
So if the part time contract is below 200, then we just need to multiply the value by 17%. and this is the total amount of tax. and then we do not need to make this into the annual calculation.
Part B: Calculation with the ZUS
revenue= 1500 * ZUS related to part time contract ( Pension+ disability)=1500*11.26% = 169 Social Security Contribution
Note: Also, there is no need for sickness insurance here, but if it is mentioend that you have to consider the sickness insurance, you have to add this.
NFZ Basis: 1500- 169=1331
Cost = (1500- (169))*20% =1331*20%=266
Taxable Income= Revenue- cost-ZUS payment = 1500–266–169= 1065
Tax Advance= 17%* 1065=181
Now we calculate NFZ:
7.75% * 1331= 103
181–103=78 this sum of money will be transfered to tax office.
Note: If the part time agreement is related to a contracted employment agreement, then there is no need for ZUS.
Calculation 6: Part time Job
Note: if I have a part time contract above the minimum salary, and we have another part-time contract, we should decide whether we want it to be related to ZUS or it is not.
Katarzyna works in a gardening company under an employment contract and her salary exceeds the minimum wage. Moreover, in October she agreed to do some cleaning works in the park in Powsin. She signed a part-time contract with the owner of the park — company Kasztanowiec. In November, she received remuneration in the amount of PLN 4,708 on her bank account.
Calculate the amount written in her contract signed with Kasztanowiec. Please ignore social and health insurance contributions in the calculations.
Solution: we have to calculate the amount written in the contract that she signed.
4708= (Revenue — Cost)*(1-17%) →
4708= (Revenue -0.2* revenue)*(1-0.17) →
4708=(0.8 Revenue)*83% → Revenue= 7090 PLN
- a contract type is an employment contract and the salary is above minimum wage. also, be aware that we can have the minimum salary ZUS for the employee.
Marianna is a geographer and works as a teacher in a high school. In 2020 she wrote a book about the Tatra Mountains. The publisher signed a contract for the particular service with her for PLN 14,000. In December 2020, he paid her an advance of 30% of the contract, and in March 2021, the entire remaining amount of the liability.
Calculate the amount of Marianna’s tax liability in 2021, if her monthly remuneration at high school is PLN 10,000. Please ignore social and health insurance contributions in the calculations.
Solution: we have two contracts of employment contract and royality contract. we can join incomes of employment to some special services. royalty is among them. also part time contract is taxed when paid.
salary= 10,000 month so in 2021 she earned: 120,000 PLN
Part time contract= 0.7*14000=9800
Her Revenue = 120,000+9800=129800
Now we calculate the costs:
Cost for employment contract= Depends on where she leaves = 250 Per month= 3000 PLN
Cost of part time= 50% of royalty = 50%*9800= 4900
total cost= 7900 PLN
So Income= 129800–7900= 121900 PLN
income-zus(0)= taxable base
Tax free amount= 556–556(Tax base-85528)/41472=53 PLN
check the tax scale:
tax amount= 14539,76+32%*(121900–85528)-53=26125