Work for retirees. How much in contributions does the company have to pay, and how much stays in the senior's pocket?

Hiring a retiree is a common practice, both for those looking to supplement their income and for those seeking experienced employees. However, full-time or contract employment entails the obligation to pay social security contributions. However, the costs for the employer are lower than hiring someone who is nearing retirement.

Some funds (including the Labor Fund and the Guaranteed Employee Benefits Fund) do not accrue contributions after a certain age. It's worth taking a look at what contributions must be paid and how much a senior citizen actually receives after taking up employment. What contributions does the company pay?

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An employer hiring a retiree under an employment contract pays standard social security contributions (pension, disability, sickness, accident) and health insurance contributions . Contributions to the Labor Fund and the Guaranteed Employee Benefits Fund are exempt for individuals who have reached the age of 55 (women) or 60 (men).

For example: with a minimum wage of PLN 4,666 gross, the employee's deductions include, among others:

• pension contribution - PLN 455.40
• pension - PLN 69.99
• sick leave - PLN 114.32
• health - PLN 363.37

The employer's contribution includes, among others, a pension contribution of PLN 455.40, a disability pension contribution of PLN 303.29 and an accident contribution of PLN 77.92.

With the above deductions, a full-time employee would receive approximately PLN 3,510.92 net per month . This amount is after deducting mandatory contributions and income tax advances. Although the company saves on the Employee Benefits (FP) and Guaranteed Employee Benefits (FGŚP), this does not significantly impact the employee's net salary.

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It is worth remembering, however, that full-time employment gives a senior citizen the right to sickness and accident benefits during employment, provided that the appropriate contributions are paid.

In the case of a contract of mandate, sickness insurance is voluntary. If a retiree opts out, with a similar gross salary, their wallet could end up with approximately PLN 3,670.96, after deducting a health insurance contribution of PLN 372.65.

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Voluntary sick leave will reduce this amount by another PLN 114.32. However, contracts for specific work are usually not subject to contributions, which increases the payout but also means no additional benefits or health insurance.

Companies should remember to properly register employees with the Social Insurance Institution (ZUS) and pay contributions on time (savings from the Labor Fund/GŚP do not eliminate the obligation to pay). It's worth calculating the total cost of employment (company contribution + employee deductions) to know the actual net salary and employer expenses.

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Before taking up employment, seniors should compare various forms of employment . A full-time job offers stable security and access to benefits, a contract for specific work can provide a higher salary with lower contributions, and a contract for specific work provides the highest net income, but without insurance coverage.