Some countries – such as France, Austria, Italy and the Netherlands – have their own equivalent of a holiday fund for the construction industry, the SOKA BAU. This is a great convenience, as it exempts the employer posting construction workers to work in Germany from paying contributions to the German fund after obtaining the appropriate certificate from the national institution SOKA BAU. As a result, the double contribution of wages can be avoided.
Is the Social Insurance Institution in Poland the equivalent of the SOKA BAU?
Unfortunately no… in Poland there is no institution similar to the German holiday fund in the construction industry. Thus, the Polish ZUS is not the Polish equivalent of the SOKA BAU. The main task of the ZUS in Poland is to collect contributions in order to provide social security such as post-accident pensions. SOKA BAU, on the other hand, collects contributions to provide security for workers in the construction industry in the event of work stoppages and situations of holiday entitlement where the fund covers the relevant holiday pay. In view of the different roles played by ZUS and SOKA BAU, it must be stated that their activities are not identical. At the same time, there is no equivalent in Poland to the German holiday fund for the construction industry. Polish employers who post construction workers to work in Germany are obliged to pay contributions to the German holiday fund for workers in the construction industry.
Agreement between ZUS and SOKA BAU.
Thanks to the agreement concluded on 24 May 2018, together with the payment of the equivalent, SOKA BAU will pay the correct amount of contributions on the paid equivalents in the part financed by the employee to the payer’s ZUS account. It follows that when employees are posted to Germany if benefits were not collected during the posting, it is possible to recover the contributions paid, the employee can do so by submitting a request for payment of the equivalent for unused holiday benefits. In this way, the contributions financed by the employee go directly to the contributor’s account.
The transfer of the relevant amounts by ZUS gives rise, as it did before the signing of the agreement between SOKA BAU and ZUS, to an obligation on the part of the payer to include the amount of the equivalent paid in the assessment base for contributions, to settle the contributions due in the relevant monthly settlement documents and to take into account, when paying contributions, the part of the contributions financed from the payer’s funds.
Please note that the remittance rules described above apply to contributions on allowances paid on the basis of applications submitted to the SOKA-BAU after 1 June 2018. The rules for the transfer of funds by the Fund to cover contributions due on paid holiday allowances have not changed on the basis of the agreement concluded.
Tax issues when paying the equivalent.
When paying the allowance to the employee, SOKA BAU is obliged to withhold 21.1% of the amount paid. Of the part collected, 20 per cent of the allowance is the amount that will go towards payment of payroll tax (income tax) in Germany. On the other hand, 1.1 per cent is the amount of the so-called ‘solidarity allowance’, which, together with the previous part upon payment, is automatically paid to the tax office in Wiesbaden (SOKA BAU’s registered office).
In summary, the income received is taxed in Germany. In Poland, it will be exempt from taxation. It should be shown on PIT-11 as income earned in Germany.
