How to save 1,250 PLN per month on health insurance in IT

The trap of three income thresholds

The lump-sum system in Poland is based on three rigid threshold amounts for health insurance contributions. If your annual income is up to 60,000 PLN, you pay about 419.46 PLN per month. Once you exceed this amount by even 1 PLN, the rate increases to nearly 699.11 PLN. The highest threshold starts above 300,000 PLN of income, where the contribution is already 1,258.39 PLN. We see this with our clients regularly — many of them cross the threshold in November and have to pay the difference for the entire year retroactively.

The key is monitoring the moment the invoice is issued at the end of the tax year. If you see that on December 27th your income is 299,450 PLN, issuing another invoice for 2,000 PLN is financial suicide. You will then pay over 6,700 PLN in additional ZUS contributions during the annual settlement. Facts on the table: sometimes it's better to move the payment to January to stay in a lower threshold and save the equivalent of a good laptop. The result matters, not the process, so look at the spreadsheet more often than at the code.

By the way, ZUS won't knock on your door to tell you that you're overpaying. You must know when your income is approaching the dangerous limit. At Krakow Advisory Market, we analyze such situations for 47 of our regular software house clients. Thanks to a simple postponement of payment deadlines, one of our contractors kept exactly 3,180 PLN in their pocket in a single quarter.

Exceeding the threshold by one zloty can cost you several thousand zlotys in additional payments during the annual settlement.

The method for contributions with several businesses

We often meet developers who run a sole proprietorship (JDG) and are also partners in limited liability companies (sp. z o.o.). This generates double burdens that can be avoided. Regulations allow for certain maneuvers with insurance titles, provided you maintain the appropriate structure of shares and remuneration. We speak with a human voice: don't pay twice for the same thing if the law gives you a loophole. Health insurance from a limited partnership or a single-member LLC is often an unnecessary expense that cuts over 700 PLN per month from your budget.

At Krakow Advisory Market, we checked the transfer history of a developer from Krakow's Kazimierz district, who paid double health insurance for 11 months. After changing the provisions in the company's statute and clarifying his role as a board member, we recovered 8,450 PLN of overpaid funds for him. The process took 38 days, but the effect was visible in the account immediately. No unnecessary talk — such errors are the most common cause of cash 'leaks' in small technology companies.

It's also worth remembering sickness insurance, which is often neglected in IT. Health insurance is mandatory and non-deductible from tax, but sickness insurance is voluntary. If you have a solid financial cushion, opting out of voluntary sickness insurance with a high lump sum can give you an extra 140-190 PLN per month. It might seem like small change, but over a year it adds up to a decent professional course or a trip to a conference.

Cost correction and the lump-sum limit

On a lump-sum tax scheme, you don't deduct business expenses, which is obvious, but health insurance has its own specific mechanism here. You can deduct 50% of the health insurance contributions paid from your taxable income. This actually lowers your income tax by a few percent. For example, with the highest contribution of 1,258.39 PLN, your tax base drops by 629.19 PLN every month. At a 12% lump-sum rate, you save an additional 75 PLN on tax alone.

We analyze these numbers for each client individually, because with 83 active accounts that we manage, two identical situations rarely occur. Some of our clients combine a lump sum with private rental, which further complicates ZUS settlements. It's important for you to know that every zloty deducted from income is pure profit. We don't promise miracles; we simply make sure you don't leave money on the table that, according to the law, belongs to you.

Recently, we helped implement such a settlement system for a team of 5 developers working on CRM systems. After auditing their invoices from the last 7 months, it turned out that on average each of them overpaid by 214 PLN per month due to incorrect calculation of deductions. We fixed this in 2 business days. Facts on the table: correct accounting of contributions is not a luxury, it is your right that is worth using every month.

You can deduct half of the paid health insurance contribution from your income. This is a real saving on income tax.

How to prepare for changes in 2025?

We hear a lot of buzz about changes in health insurance, but at this moment we operate on facts. Planned reforms are intended to bring relief to smaller entrepreneurs, but for the IT industry earning over 20,000 PLN per month, there probably won't be a revolution. That's why it's so important that your strategy for 2025 is ready as early as December. Checking if the lump sum is still more profitable for you than the flat tax usually takes us 3.2 hours of pure data analysis.

If your income in 2024 was 287,000 PLN, you are in a very safe place. However, if you hit 312,000 PLN, you must prepare for higher burdens in the new year. At Krakow Advisory Market, we always say: don't wait for a change in regulations; learn to use the ones that are already there. Most savings in small companies come from order in the papers, not from looking for loopholes in the law.

Heads-up: before January 20th, you must decide on the form of taxation for the entire next year. This is the most important date in the calendar of a developer on JDG. A wrong choice can 'eat up' even 14,000 PLN per year with typical senior dev earnings. If you're not sure if the lump sum is still the best option with the new contributions, write to us. We will calculate it on specific numbers, without fluff.