Social and health insurance for employees posted to work in another EU country

This means that a Polish employer, while posting an employee abroad, will still calculate and pay to the Social Insurance Institution (ZUS) social contributions and health insurance contributions for his employment. However, since the employee has been posted abroad, it will be possible to apply different bases for calculating the above contributions.

As a rule, the basis for contributions in Poland constitutes the total income of a posted employee, regardless of the place of its taxation. This must be especially kept in mind if the host entity in the country of posting pays or provides the employee with additional benefits, such as a company car. Under such circumstances, the payer (Polish employer) should, each month, before preparing the payroll, obtain from the host entity a statement of the benefits paid or provided to the employee, which will be included in the basis for calculating contributions for the employee in Poland.

If an employee is posted to work abroad, the basis for calculating contributions may be reduced by the equivalent of the per diem payable for business trips abroad, for each day of the stay abroad^[1]. This reduction is applicable only if the posted employee earns an income higher than the average salary. Moreover, the basis for the assessment of contributions minus the equivalent of the per diems cannot be lower than the aforementioned average remuneration (currently PLN 5 259) ^[2].

Sometimes it happens that an employee posted abroad changes his tax residence and pays income tax on the income received from his Polish employer in the country in which the work is performed, i.e., in the country of posting.

In this situation, his advance payments for income tax in Poland may not be collected. The question remains whether his health care contribution may be reduced to 0 PLN, pursuant to Article 83(2) of the Act of 27 August 2004 on health care services financed from public funds, if the payer does not calculate advance payments for income tax on income constituting the basis for calculation of the health care contribution.

In this respect, the Social Insurance Institution (ZUS) has adopted a consistent position in its interpretations - it states that the health insurance contribution of an employee posted as a non-resident for tax purposes in Poland should be collected in the full amount, despite the fact that the payer does not collect advances for PIT.

When it comes to court judgments in this area, a uniform line of jurisprudence has not yet been developed. The judgements are positive and negative for taxpayers.

Thus, the application of the zero health contribution in the case of an employee posted abroad, paying tax advances in the country of posting and being a tax non-resident in Poland, carries the risk that such a position will not be recognised by ZUS.