Annual Health Insurance Contribution – How to Calculate It?

As of January 1, 2022, new rules for calculating health insurance contributions for entrepreneurs have been implemented. Additionally, there is now an obligation for entrepreneurs to perform an annual settlement of their health insurance contribution.

The annual settlement of the health insurance contribution for 2022 must be made in the settlement for the contributions due for the month of April 2023, in the declaration submitted by May 22, 2023.

The annual settlement involves calculating the total health insurance contribution for the year and comparing it with the amount already paid for the specific period. It’s important to note that the basis for calculation is the income or revenue for 2022. The “contribution year” aligns with the tax year for entrepreneurs paying a lump-sum tax, while for entrepreneurs taxed under the general tax scale or flat tax, the contribution year lasts from February to January of the following year (meaning contributions paid from March 2022 to February 2023 must be considered).

How to Calculate Health Insurance Contributions in the Annual Settlement for Entrepreneurs Taxed Under the Tax Scale or Flat Tax

For entrepreneurs taxed under the general tax scale (PIT) or flat tax in 2022, the health insurance contribution is calculated based on the income achieved between January and December 2022. The applicable health insurance rates are as follows:

• For flat tax (PIT): 4.9%

• For general tax scale (PIT): 9%

Note: In both cases, if there is no income or low income, the minimum health insurance contribution must still be paid. This minimum contribution is determined based on the national minimum wage for the given year and for 2022, it amounts to PLN 3,250.80 (12 months x PLN 270.90).

Example 1: Entrepreneur taxed under the tax scale (PIT)

An entrepreneur taxed under the general tax scale (PIT) achieved a revenue of PLN 200,000 and incurred costs of PLN 100,000. In 2022, the entrepreneur paid social insurance contributions totaling PLN 12,446.16 (PLN 1,037.18 per month) and did not include them in the cost of doing business.

• Calculation of the health insurance contribution:
  PLN 200,000 – PLN 100,000 – PLN 12,446.16 = PLN 87,553.84

• Annual health insurance contribution:
  PLN 87,553.84 x 9% = PLN 7,879.85

Next, this calculated annual contribution is compared to the sum of the 12 monthly contributions already paid during the contribution year (from February 2022 to January 2023). Assuming the entrepreneur paid at least the minimum health insurance contribution for each month, the remaining amount to pay will be:

• PLN 7,879.85 – PLN 3,250.80 = PLN 4,629.05.

Example 2: Entrepreneur taxed under the flat tax (PIT)

An entrepreneur taxed under the flat tax (PIT) achieved a revenue of PLN 200,000 and incurred costs of PLN 100,000. In 2022, the entrepreneur paid social insurance contributions totaling PLN 12,446.16 (PLN 1,037.18 per month) and did not include them in the cost of doing business.

• Calculation of the health insurance contribution:
  PLN 200,000 – PLN 100,000 – PLN 12,446.16 = PLN 87,553.84

• Health insurance contribution:
  PLN 87,553.84 x 4.9% = PLN 4,290.14

Assuming the entrepreneur paid at least the minimum health insurance contribution during the year, the remaining amount to pay will be:

• PLN 4,290.14 – PLN 3,250.80 = PLN 1,039.34.

How to Calculate Health Insurance Contributions in the Annual Settlement for Entrepreneurs Paying Lump-Sum Tax

Entrepreneurs who pay lump-sum tax (ryczałt) also pay a flat health insurance contribution based on their revenue threshold. The annual health insurance contribution depends on the total revenue for 2022. Once the revenue for the entire year is verified, the following formula can be applied:

• Number of months x monthly contribution rate = Annual contribution

The health insurance contribution rates for lump-sum taxpayers are as follows:

• Up to PLN 60,000 revenue – PLN 335.94 per month

• Between PLN 60,000 and PLN 300,000 – PLN 559.89 per month

• Above PLN 300,000 – PLN 1,007.81 per month

Example: Lump-sum taxpayer with progressive health insurance contributions

An entrepreneur paid the health insurance contribution progressively. Until May, the entrepreneur’s revenue did not exceed PLN 60,000. In June, the entrepreneur exceeded this amount, and in November, they exceeded PLN 300,000. The entrepreneur’s final annual revenue was in the third revenue bracket.

• For the period January to May, the entrepreneur paid PLN 335.94 per month:

  • PLN 335.94 x 5 = PLN 1,679.70

• For the period June to October, the entrepreneur paid PLN 559.89 per month:

  • PLN 559.89 x 5 = PLN 2,799.45

• For the period November to December, the entrepreneur paid PLN 1,007.81 per month:

  • PLN 1,007.81 x 2 = PLN 2,015.62

Total paid contributions = PLN 6,494.77

However, using the formula for the annual contribution:

• 12 x PLN 1,007.81 = PLN 12,093.72

The difference will be:

• PLN 12,093.72 – PLN 6,494.77 = PLN 5,598.95.

Thus, the entrepreneur will need to pay an additional PLN 5,598.95 to ZUS.

Note: In this case, regardless of the amount by which the revenue exceeds PLN 300,000, the total annual health insurance contribution will always be PLN 12,093.72.