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Temat: Liquidation of the limit of pension contributions in Poland
Liquidation of the limit of pension contributions in PolandOn November 24, 2017, the Polish Parliament accepted draft amendments to the Act on the social insurance system that will liquidate binding limits on pension and disability insurance contributions. Currently, the annual basis for pension and disability insurance contributions cannot be higher than the amount equal to 30-times expected average remuneration in the national economy for the given calendar year (in 2017 the limit was PLN 127.890). After reaching the limit, pension and disability insurance contributions were no longer paid.
As a result of the limit liquidation, pension and disability insurance contributions will be paid on the whole remuneration received by the employee. The new regulations will significantly increase the additional costs of employment borne by employers and will lower the net remuneration of the employees involved.
Below, we present the overview tables that show the essential changes in the amount of pension and disability insurance contributions for an exemplary remuneration of PLN 30.000 gross before and after the amendments.
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