Changes to the health insurance premium eliminate the possibility of deducting it from income for people on a flat tax rate. In practice, this means that although the premium amount will decrease, entrepreneurs will no longer benefit from the previous tax relief. In some situations, taxpayers will “break even”. The expert explains why the savings may turn out to be smaller than initially thought.
In today's vote, the Sejm approved changes to the health insurance contribution that, at first glance, may seem revolutionary. The change introduced reduces the health insurance contribution for entrepreneurs, but at the same time eliminates the possibility of deducting this contribution from income for people on a flat tax .
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Companies will pay up to PLN 1,000 less per month. What will entrepreneurs gain from changes in health insurance premiums?
A discount that is not what it seems
– Previously, entrepreneurs could deduct PLN 11,600 annually. Multiplying this by the tax rate (19%), we have PLN 2,204 of “tax relief” annually. This means that thanks to this, the entrepreneur paid “real” PLN 11,600 annually, not PLN 9,596 (PLN 799/month). The effective contribution amount was therefore not 4.9% but approx. 3.99% (PLN 799/20,000) , explains Sebastian Bednarczyk, a tax advisor, in a post on LinkedIn.
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The expert discusses the real consequences using the example of an entrepreneur earning PLN 20,000 per month on a flat tax. He paid around PLN 11,800 per year (around PLN 980 per month) in health insurance premiums.
– After the changes voted on today by the Sejm, the same entrepreneur will pay about PLN 8,640 per year (approx. PLN 720 per month) in health insurance premiums (…) However, from 2026, the entrepreneur will no longer deduct the paid health insurance premium. This means that the savings of PLN 3,000 per year are just fiction, and due to the elimination of the deduction mechanism, it will amount to “only” PLN 956 per year. The effective rate of the health insurance premium will therefore amount to 3.6% (PLN 720/PLN 20,000). The government has just reduced the health insurance premium for entrepreneurs such as the one in the example by 0.3% (earning PLN 20,000 per month, taxed with a flat tax) – sums up the tax advisor.
