New ruling by the Social Insurance Institution – watch out for managers’ travel expenses

 

In its ruling the ZUS has elaborated on the rules of accounting for travel expenses of managers hired on the basis of a management contract instead of an employment agreement. According to the Regulation on Detailed Rules for Determining the Assessment Base for Retirement and Disability Pension Insurance Contributions, travel allowances and other payments connected with an employee's business trip are not included in the base for assessment of contributions.

However, the ZUS has explained that this provision applies exclusively to employees, and does not extend to those hired on the basis of civil law contracts, including management contracts. According to the authorities, if the contract does not include a clause saying that travel expenses are accounted for according to the rules applicable to employees, the reimbursement of travel allowances, accommodation, commuting and the like, should be treated as income. And if it is income, social insurance contributions should be calculated on it.

Check your contracts – do they include the relevant provision on accounting for travel expenses? If not, it is worth fixing before inspectors come and impose additional costs. Don’t know how to get about it? Contact us – we will help you review your contracts and work out a safe approach.​​