Every entrepreneur running a JDG (sole proprietorship) has the right to suspend their business activity temporarily. This is particularly useful when, for various reasons, you cannot continue running the business for a certain period. It may be due to illness, family circumstances, a lack of orders or a wish to take a longer break from business duties.
The decision to suspend a business has a number of legal and financial consequences that every entrepreneur should understand before taking this step. One of the most important questions, and the one that raises the most doubts, concerns social security and health insurance contributions to ZUS (Social Insurance Institution).
Business suspension is available only to entrepreneurs who do not employ staff. The exception is an entrepreneur who employs only employees on maternity, parental, childcare or carer's leave
Many people wonder whether, after suspending their business, they will still have to pay monthly ZUS contributions, which are a significant financial burden for every entrepreneur. The answer is not clear-cut and depends on several factors, including whether you opt for voluntary insurance and how long you plan to suspend the business.
Suspension procedure and deregistration from ZUS
Suspending a business starts with filing the relevant application in CEIDG (Central Register and Information on Economic Activity). The entrepreneur must fill in the CEIDG-1 form, the same document used when the business was set up. The only difference is ticking the option for business suspension.
Once the entry is made, the information about the suspension is passed automatically from CEIDG to ZUS, regardless of whether the application was filed online or at the municipal office (urząd gminy).
ZUS prepares several different documents related to the entrepreneur's deregistration. The process covers deregistration under various insurance titles and concerns not only the entrepreneur
ZUS prepares the following documents related to the temporary deregistration:
- The ZUS ZWPA form, deregistering the contribution payer
- The ZUS ZWUA form, deregistering the person from social security
- The ZUS ZWUA form for people cooperating with the entrepreneur
- The ZUS ZCNA form for the entrepreneur's family members
- The ZUS ZCNA form for family members of the cooperating person
Each of these documents has its own purpose and covers a different aspect of social security. The entrepreneur does not have to fill in these forms themselves, because ZUS does it automatically on the basis of the notification received.
After preparing all the necessary documents, ZUS must inform the entrepreneur that the deregistration has been made. This information is sent in a separate letter, which the entrepreneur receives at the correspondence address given in the business register.
Deregistration from ZUS takes place automatically from the day the business is suspended. The entrepreneur is not covered by social security from the day of suspension until the day before the business is resumed
As a result of deregistration from ZUS, the entrepreneur is released from the obligation to pay social security contributions. This covers pension, disability, sickness and accident insurance contributions. At the same time, the entrepreneur loses the right to benefits from this insurance, which means that if they fall ill they cannot count on sickness benefit.
Another important aspect of suspension is the release from the obligation to file settlement documents with ZUS. Under Article 36a section 3 of the Social Insurance System Act, for the period of business suspension an entrepreneur who pays contributions only for themselves does not have to file a settlement declaration or pay social security contributions.
Settling contributions when the business is suspended mid-month
Things become more complicated when an entrepreneur decides to suspend the business in the middle of a calendar month. In that case, they cannot simply stop paying contributions for the whole month, because for part of the period they actually ran the business and were covered by social security.
The proportionality rule means that social security contributions are calculated and paid only for the days on which the entrepreneur actually ran the business. The calculation covers all calendar days, including Saturdays, Sundays and public holidays, because the entrepreneur's status does not depend on working days.
Calculating proportional contributions involves several stages:
- Determining the applicable minimum contribution base for social security
- Dividing that amount by the number of calendar days in the month of suspension
- Multiplying the resulting daily amount by the number of days the business was run
- Calculating contributions from the base determined in this way
- Preparing and filing the relevant settlement declarations with ZUS
The rule of proportional reduction applies only to social security contributions. The health insurance contribution must be paid from the full base, even if the business was run for only part of the month
The different treatment of the health contribution results from the separate rules governing this insurance. Even if the entrepreneur ran the business for only a few days in a month, they must pay the health insurance contribution in full, as if the business had been run for the whole month.
This rule may seem unfair, but it is justified by the way the healthcare system is financed. Health insurance is continuous and cannot be split in proportion to the period of business activity, because the insurance cover applies to the whole calendar month.
| Type of contribution | Settlement rule | Contribution base | Notes |
|---|---|---|---|
| Pension | Proportionally | For the days the business was run | Including weekends |
| Disability | Proportionally | For the days the business was run | Including weekends |
| Sickness | Proportionally | For the days the business was run | If it was paid |
| Accident | Proportionally | For the days the business was run | Compulsory for the entrepreneur |
| Health | From the full base | For the whole month | Regardless of the number of days |
An entrepreneur who suspends the business mid-month must file the relevant settlement declarations with ZUS, showing the proportionally calculated contributions. They cannot simply stop filing documents, because for part of the month they were still covered by social security.
Voluntary insurance during business suspension
Although business suspension automatically ends compulsory social security, the entrepreneur can join voluntary pension and disability insurance. This allows them to keep building pension capital even during a period when the business is not being run.
The condition for joining voluntary pension and disability insurance is having no other title to this insurance. This means that the entrepreneur cannot at the same time be employed elsewhere under an employment contract or run another activity that would involve compulsory social security.
During business suspension, the entrepreneur can join only voluntary pension and disability insurance. Voluntary sickness and accident insurance is not available during this period
Registration for voluntary insurance can take place at any time during the suspension. The entrepreneur does not have to decide immediately after suspending the business, but can do so later, when they consider it worthwhile. We can take over ZUS registrations and settlements — see HR and payroll.
To join voluntary insurance, the ZUS ZUA form (registration for insurance) must be filed with ZUS. In this document, the entrepreneur states the date from which they want to be insured. Importantly, the insurance starts no earlier than the day the application is filed with ZUS, regardless of the date the entrepreneur gives.
The contribution base for voluntary pension and disability insurance depends on the rules under which the entrepreneur paid contributions before the suspension:
- 60 percent of the projected average monthly salary - for entrepreneurs who paid contributions under the general rules before the suspension
- 30 percent of the minimum wage - for entrepreneurs who were entitled to pay lower contributions, but only for up to 24 months from starting the business
Entrepreneurs who used preferential contributions for 24 months must, after that period, pay contributions from a base of 60 percent of the projected average salary, even during voluntary insurance
The decision to join voluntary insurance should be well considered, because it means regular spending on contributions. On the one hand it allows you to keep building pension capital, on the other it is an additional financial burden at a time when the entrepreneur is not running the business and has no income.
The benefits of paying voluntary contributions include:
- Continuing to build capital in your pension account
- Keeping continuity of pension and disability insurance
- The possibility of a pension on more favourable terms
- Keeping the right to a disability pension (renta) for incapacity to work
- The possibility of counting this period when establishing the right to a pension
Health insurance during business suspension
Health insurance during business suspension is particularly important, because it concerns access to medical services. The right to health insurance under the business expires automatically when the business is suspended, but not immediately.
The entrepreneur keeps the right to healthcare services for 30 days from the day the business is suspended. This 30-day protection period is meant to allow the entrepreneur to find another form of health insurance if the suspension is to last longer.
After 30 days from the suspension, the entrepreneur loses the right to healthcare services, unless they use one of the available options for continuing insurance. No health insurance means having to bear the full cost of treatment, which can be a significant financial burden.
If the business suspension is to last longer than 30 days, the entrepreneur should consider one of the three available options for continuing health insurance so as not to lose access to medical services
An entrepreneur whose suspension lasts longer than a month has three main options for securing health insurance:
Insurance as a family member
The first option is to be registered for health insurance as a family member of an insured person. Most often this applies when the entrepreneur's spouse is employed under an employment contract or runs their own business and pays health insurance contributions.
To use this option, the entrepreneur must meet certain conditions, above all they cannot have their own title to health insurance. Insurance as a family member involves no additional costs for the entrepreneur, because the contribution is paid by the person whose insurance they use.
Registering at the labour office
The second option is to register at the district labour office (powiatowy urząd pracy) as an unemployed person. In that case, the labour office pays the health insurance contribution for the registered unemployed person, which gives them access to medical services.
If the entrepreneur meets the conditions for receiving unemployment benefit, the health insurance contribution will be deducted from the benefit. Otherwise, the contribution is paid in full by the labour office, which means free health insurance for the entrepreneur. A short break from social security contributions is also offered by ZUS contribution holidays.
Voluntary health insurance with the NFZ
The third option is to take out voluntary health insurance directly with the National Health Fund (NFZ). This requires a written application and regular payment of a contribution from the declared amount, which cannot be lower than the average salary.
An entrepreneur running a retail business decided to suspend it for 6 months due to health problems. 30 days after the suspension, he lost the right to health insurance under the business. As his wife works under an employment contract, he was registered as a family member under her health insurance, which allowed him to continue treatment at no extra cost.
The choice of health insurance option should be tailored to the entrepreneur's individual situation. Take into account the planned length of the suspension, your family situation, the possibility of registering at the labour office and the costs of each option.
Resuming the business and returning to ZUS
Resuming the business after suspension means an automatic return to the social security system. As with the suspension, the entrepreneur must file the relevant application in the business register, and the information about the resumption is passed to ZUS automatically.
From the day the business is resumed, the entrepreneur again becomes a contribution payer and is subject to compulsory social security. This means paying pension, disability, accident and health contributions regularly, and, if the entrepreneur was covered by voluntary sickness insurance before the suspension, also the sickness contribution. If the business owner also has an employment contract, different rules apply — they are set out in our guide to ZUS contributions for a business owner who is also employed.
Resuming the business automatically ends voluntary pension and disability insurance if the entrepreneur used it during the suspension. From the day the business is resumed, the rules of compulsory insurance apply
If the entrepreneur paid voluntary pension and disability contributions during the suspension, this period will be taken into account when establishing the right to a pension and its amount. There is no break in insurance, which is beneficial for building pension capital.
Resuming the business in the middle of a calendar month is also subject to the proportionality rule. Social security contributions are calculated for the period from the day of resumption to the end of the month, while the health contribution must be paid for the whole month.
