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New amount of deduction for the Social Fund from 2024

In 2024, the amount of the deduction for the Company Social Benefits Fund increased once again. Thus, the maximum amount of holiday pay that many employers decide to pay has also increased. Holiday benefit paid up to the amount of the basic deduction is exempt from contributions. 

Pursuant to the Act on the Company Social Benefits Fund (Act of March 4, 1994 on the Company Social Benefits Fund, Journal of Laws of 1994, No. 43, item 163), the obligation to create a Social Benefits Fund applies to employers employing at least 50 full-time employees. full-time positions as of January 1 of a given calendar year. 

How to determine the value of the deduction for employed persons?

The amount of the deduction for a given year is determined by preparing a forecast of average employment in each month, after which these values are added up and divided by 12 months. The value determined in this way, multiplied by the amount of the basic deduction, is the amount that the employer should transfer to the social fund account for a given year. At the end of the calendar year, the employment level is verified and the established contribution to the Social Benefits Fund is adjusted, if necessary.

In 2024, the amount of the mandatory ZFŚS deduction for an employee employed under a full-time employment contract is PLN 2,417.14.

Employers are obliged to transfer the first tranche of the deduction by May 31 in the amount of 75% of the full deduction amount. By the end of September, enterprises should transfer the remaining 25% of funds allocated for this purpose to the Social Fund account. However, nothing prevents the employer from transferring 100% of the funds to the fund account before the required date.

For what purposes can funds from the social fund be used?

Funds collected under the Company Social Benefits Fund may only be used for social purposes, e.g.:

  • co-financing for employees’ holidays,
  • cultural, educational and sports and recreational activities,
  • co-financing for the creation of an on-site nursery, children’s club or kindergarten,
  • benefits for employees, e.g. in connection with a serious accident, a chronic disease or a difficult life situation.

The employer is responsible for administering the funds in the Social Fund account. Unused funds from the fund in a given year may be used in the next calendar year.

Holiday pay – who pays it and when?

If the employer employs fewer than 50 employees, the employer may voluntarily decide to create a social fund or, if it is not created, the employer is obliged to pay holiday allowance. If the employer decides to take none of the above actions, he is obliged to notify employees about the failure to create the fund and the failure to pay allowance within the deadline specified by law, i.e. by the end of January each year.

The upper limit of the amount of holiday allowance is, as a rule, equal to the amount of the basic contribution to the Social Fund, but there are no obstacles for the employer to set the amount of the deduction at a lower or higher amount. Please remember that up to the amount of the basic ZFŚS deduction, this amount will not constitute the basis for calculating ZUS contributions.

Holiday allowance is paid provided that the employee takes 14 days of annual leave without interruption. In this case, calendar days are taken into account, not business days. Pursuant to Art. 3 section 5a of the Social Benefits Fund Act, the holiday allowance should be paid no later than on the day before the employee starts taking holiday leave.