Health contribution deduction in 2024

Health contribution deduction in 2024 - what is the maximum amount? 

According to the announcement of the Minister of Finance, the annual amount of health contribution included in deductible costs or deducted from income in 2024 cannot exceed PLN 11,600. In 2023, this limit amounted to PLN 10,200.

Learn more: ZUS contributions in 2024 will be higher, cost of employment will also increase

Health contribution deduction - under what rules? 

The health contribution deduction was reintroduced with the amendment of the Polish Order. The deduction can be made by entrepreneurs settling their tax on a basis of a:

• Lump sum from registered revenue - a deduction from income of a maximum amount corresponding to 50% of paid health contributions;
• Tax card - a maximum tax deduction of 19% of the amount of health contributions paid;
• Flat tax - a possible deduction of the amount of health contributions paid from income or inclusion of health contributions as a deductible expense up to a maximum of the limit applicable in a given year.

The health contribution deduction is not available in any form to those settling according to the tax scale.

Each of the above methods of deducting the health contribution has different benefits. Deducting the health contribution, by including it as a deductible expense, results in a reduction in the tax base and thus a reduction in the health contribution assessment base, while deducting the health contribution from income results in a reduction in the amount of income tax payable.

Entrepreneur's health contribution in 2024 - how much do you need to pay? 

The amount of the health contribution in 2024 depends on the form of taxation chosen by an entrepreneur. As a reminder, the annual settlement of the entrepreneur's health contribution has been in force since 2023.

The annual health contribution settlement applies to entrepreneurs applying one of the following 3 forms of taxation:

• General rules - tax according to a scale,
• General rules - flat tax,
• Lump-sum tax on registered revenue. 

So, what is the amount of the health contribution per month of the contribution year for the 3 forms of taxation indicated above? We present the calculations below.

1. Tax scale

When accounting according to the general rules, i.e. according to the tax scale and assuming that the income in a given month does not exceed the amount of the minimum wage applicable in a given year, the amount of the health contribution is 9% of the minimum wage, thus:

• the minimum health contribution from January 2024 for a given month of the contribution year is PLN 381.78. 

If the income is higher, the health insurance contribution for a taxable person is 9% of the contribution base, i.e. business income. The first contribution is paid in February 2024.

2. Flat tax

If an entrepreneur settles personal income tax in the form of a flat tax (19%), the health contribution is 4.9% of the contribution assessment basis, i.e. business income, but the health contribution cannot be lower than PLN 381.78.

3. Lump-sum tax on registered revenue

For those accounting on a lump sum basis from registered revenue, two variables are taken into account to determine the amount of the health contribution:

• The amount of the entrepreneur's revenues and
• The amount of the average monthly remuneration in the enterprise sector for the fourth quarter of the previous year.

As of now, there are no data for Q4, but given that the amount of the average monthly remuneration in the enterprise sector, including payments from profit, in Q3 in 2023 was PLN 7465.32, entrepreneurs using the lump-sum settlement must prepare for an increase in the amount of the health contribution.

The health insurance contribution for those who take advantage of the lump sum is 9% of the assessment base, and the assessment base for the health contribution when settling on a lump sum from registered revenue is calculated according to three rates:

• 60% of the average remuneration with annual revenues not exceeding PLN 60,000,
• 100% of the average remuneration with annual revenue between PLN 60,000 and PLN 300,000,
• 180% of the average remuneration with annual revenues exceeding PLN 300,000. 

As a result, the health contribution for a lump-sum entrepreneur with income not exceeding PLN 60,000 could amount to PLN 403.11 (previously it was PLN 376.16), but, as a reminder, everything will depend on the announcement of the Central Statistical Office on the amount of the average remuneration together with payments from profit in the fourth quarter of 2023, the publication of which is expected at the end of January this year.