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Government Plans to Ease Burden on Sole Proprietorships with New Health Insurance Contribution Regulations

BUSINESSGovernment Plans to Ease Burden on Sole Proprietorships with New Health Insurance Contribution Regulations

The government aims to ease the burden on sole proprietorships by introducing new regulations for collecting and calculating health insurance contributions. The proposed changes are intended to improve the situation for entrepreneurs, increase certainty in accounting, and help finance healthcare system expenditures. According to the head of the self-employed trade union, in the face of demographic changes and existing public burdens, solutions must be sought in rebuilding social relations. Otherwise, the grey economy and the number of excluded individuals will grow.

“Social relations, life expectancy, lifetime income, and care costs have all changed, partly because medical capabilities have increased. The model devised by Bismarck is faltering,” said Witold Solski, Chairman of the National Commission, National Trade Union of the Self-Employed “wBREw,” to the Newseria Biznes news agency. “We still have elements from the Polish People’s Republic; these people are still alive. There was no co-payment into a common fund, and this money is being consumed on an ongoing basis. If we don’t sit down and talk about values, axiology, the common good, community, and principles—what we want for the future—we are discussing the present, which results in a demanding, non-constructive attitude.”

Demographers and labor market specialists have been warning for years about the inevitable aging process in developed societies, leading to an increase in the number of elderly, post-working age individuals, while younger, smaller cohorts enter the labor market. According to the Central Statistical Office, from 2010 to 2023, the working-age population decreased by nearly 3 million people. In 2023, the number and percentage of non-mobile working-age people increased, making up 23% of the population. In comparison to 2022, the percentage of mobile working-age people, which hovered around 40% from 1990 to 2014, decreased by 0.6 percentage points to 35.4% by the end of 2023. Additionally, the labor market is burdened by the legacy of the transformation, which forces businesses to rely on self-employment to optimize tax costs and expenditures related to workplace safety and hygiene.

“On the other hand, regardless of how the conflict in Ukraine ends, and if the approximately one million foreigners currently paying various public dues but not yet benefiting from healthcare privileges leave, we will face a huge shortage of people for genuinely useful economic work—providing food, communication, waste disposal, care for the elderly—all essential for social balance and still very poorly paid,” said Solski. “The minimum wage is around 30 PLN per hour, while the minimum costs of running a sole proprietorship providing simple social services in small towns range from 50 to 80 PLN per day. To avoid unemployment and survive, let alone feed children or a spouse, public dues consume two to three hours of work daily.”

The government announced that from January 1, 2025, it plans to reintroduce a flat-rate health insurance contribution for entrepreneurs settling under the general rules according to the tax scale. The contribution will be 9% of 75% of the minimum wage, or about 310 PLN per month (in 2025 terms). The health insurance contribution for 93% of PIT entrepreneurs (regardless of the form of taxation) will also be reduced, especially for those with low and medium incomes. All entrepreneurs settling with a flat tax, as well as those paying PIT under a tax card, will benefit from the new solution.

The planned changes were announced by the government at the end of March 2024, but according to Solski, they remain in the declarative stage for now.

“Every month, many businesses are started in Poland, but recent years show that many more are being closed or suspended. Some elements need to be considered in the life decisions of people who do not have great competencies or who have significant competencies but whose work, services, or goods are not highly valued for various social reasons. Health insurance contributions and all public burdens are too high,” Solski noted. “These people will have to decide to close their sole proprietorships to survive, as they cannot spread these burdens over several employees, and they will move into the so-called black or grey market, which is huge, hence we have such low unemployment.”

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