A financial holiday relief available for the self-employed

The government is currently working on a draft law introducing a new financial support instrument for self-employed entrepreneurs. The Act on Entrepreneurs’ Law is to be amended. According to the government’s estimates, the so-called holiday relief, as a reduction of contributions amounts to the Social Insurance Institution (ZUS), will be available to 1.2 million micro-entrepreneurs.

The regulations are resulting from the statutory entrepreneur’s right to rest, which may limit the performance of activities in one month, therefore his revenues will be lower and thus his liabilities towards ZUS may also be reduced.

ZUS holiday relief in six points

1. A new form of support can be granted once a year, effective for the month selected by the applicant;
2. A 50% reduction of the value of mandatory social contributions in a selected month.
3. Only self-employed (not employing anyone) are eligible.
4. The applicant should have run a business for a minimum of 6 months (before the month with a holiday relief). The sum of revenues in this period may not exceed 60 thousand PLN.
5. The holiday relief will not be available to self-employed paying KRUS.
6. Applying: by the 10th day of the month preceding the month in which the entrepreneur wants to use the relief.

The legislator’s intention

The project is a response to the difficult business conditions caused by the prolonged lockdown and the ongoing COVID-19 pandemic. Every year, entrepreneurs have to face the valorization of contributions, plus this year: the scope of economic stagnation being a direct consequence of the act of higher necessity (lockdown introduced by the regulation of the Council of Ministers). In the intention of the government, the reduced revenues are to be compensated in the form of reduced liabilities towards the Social Insurance Institution (ZUS). In practice: in the form of a reduction available to entrepreneurs applying for it.

The new form of support is to introduce equality between the self-employed and those employed under a contract of employment, introducing partial compensation for suspending business activity – as the equivalent of paid leave, to which only persons employed under a contract are entitled.

The cost of the new holiday relief, fully covered by the state budget, is estimated at 320 million PLN.