Many women decide to increase their ZUS (Social Insurance Institution) contributions before giving birth to receive a higher maternity benefit. While this may seem like a good idea, it's important to first understand the factors that determine the amount of maternity benefit.
How does ZUS calculate the amount of maternity benefit?
Maternity benefit depends on how long and how much you paid voluntary sickness insurance contributions. This is the basis on which ZUS calculates the average benefit base, i.e., the amount you will receive during maternity leave.
- If you have been running your business for over a year, ZUS calculates the average for the last 12 months,
- If you have been running your business for less than a year, ZUS calculates the average only for the period of running your business.
What happens if you only raise your premiums temporarily?
If you paid the minimum ZUS contribution for 11 months and only increased your contribution for one month, your benefit will practically not increase at all. ZUS will calculate an average of the low contributions, because one increased month won't significantly change the overall average. As a result, you'll overpay by paying higher contributions, and your benefit won't increase accordingly.
What happens if you have been in business for less than a year?
If your business has been in operation for less than a year, ZUS will only calculate the average for the number of months it has been in operation. This can even be as little as one month, but in such a situation, ZUS may check whether you are attempting to artificially inflate your benefit amount.
What to do before you raise your premiums?
Before you decide to increase your ZUS contributions, it's worth carefully calculating what's more cost-effective for you. Sometimes it's better to stick with lower contributions if your average benefit base doesn't increase proportionally to your contribution expenses.
If you're unsure how to best plan your social security contributions before giving birth, contact our tax advisor who will help you calculate which option is most cost-effective and compliant.
