The Company Social Benefits Fund (ZFŚS) raises many questions among both employees and employers. Who must establish it? What can be financed from it? How does the ZFSŚ relate to tax regulations? We answer these and other dilemmas in the article below.
Table of Contents
What Is the Company Social Benefits Fund, And Who Must Establish It?
The Company Social Benefits Fund (or Employee Social Benefits Fund) is a special fund created by employers to finance social activities for employees and to meet their living, social, and cultural needs.
The rules for establishing and allocating the funds are defined in the Act of 4 March 1994, on the Company Social Benefits Fund.
| Employers are required to establish a Company Social Benefits Fund if they: | hire more than 50 people, |
| operate as so-called budgetary units or local government budgetary establishments (in this case, regardless of the number of employees), | |
| hire between 20 and 50 people, if a workplace trade union requests to form Company Social Benefits Fund |
In all these cases, the number of employees is determined based on the headcount as of 1st January of the given year. Only full-time positions are considered for this purpose.
Other employers may establish a Company Social Benefits Fund voluntarily.
The funds for the Company Social Benefits Fund mainly come from mandatory contributions. The amount is regulated by law and depends on the number of employees and the financial performance of the company. The fund can also be supplemented from other sources. For example, income from social activities, donations, or grants
What Can Be Financed From the Company Social Benefits Fund?
As indicated above, the purpose of the Company Social Benefits Fund is to fund specifically defined areas of social activity.
| Money from the Company Social Benefits Fund is used to provide services offered by employers in areas such as: | Various forms of leisure time and vacation |
| cultural and educational activities, | |
| sports and recreational activities, | |
| childcare in nurseries, children’s clubs, by day-care providers or nannies, in kindergartens, and other forms of preschool education, | |
| providing material support – in kind or financial form, | |
| providing repayable or non-repayable housing assistance, under conditions specified in an agreement. |
Who Can Use the Company Social Benefits Fund?
The Company Social Benefits Fund supports employees of a given workplace and their families, as well as retirees and pensioners (former employees and their families). Others may qualify if included in the employer’s fund regulations.
What is important, the group of eligible individuals can be quite broad. Especially if the employer extends benefits to freelancers or civil law contractors. For example, hired based on contracts of mandate or specific-task contracts.
The support resulting from the Company Social Benefits Fund depends on a person’s life, family, and financial situation.
Company Social Benefits Fund And Income Tax
Benefits paid from the Company Social Benefits Fund may be subject to personal income tax or exempt from it. It depends on the type of benefit.
| The Act of July 26, 1991, on Personal Income Tax exempts the following from income tax: | Benefits received by retirees or pensioners in connection with a previous employment relationship with the company, including benefits from trade unions. It is up to 4500 PLN per tax year. |
| The value of non-cash benefits and cash benefits received by an employee in connection with social activities funded entirely by the Employee Social Benefits Fund or trade union funds – up to 1000 PLN per tax year. Non-cash benefits do not include vouchers, coupons, or other tokens exchangeable for goods or services. | |
| One-time financial aid granted in cases of personal hardship, natural disasters, long-term illness, or death — regardless of the amount — if paid from the Company Social Benefits Fund, trade union funds, or under separate regulations issued by the relevant minister. | |
| Benefits related to the stay of eligible individuals’ children in nurseries, childcare clubs, or kindergartens. | |
| Subsidies for: organized vacation (e.g., holiday trips, camps, winter breaks), including educational trips; stays in health resorts or rehabilitation centers; and travel costs related to such stays—for children and youth under the age of 18, funded from the Company Social Benefits Fund or under regulations issued by the competent minister—regardless of the amount. |
Summary
The Company Social Benefits Fund is not just an obligation. It is also an opportunity to provide real support to employees and to optimise company costs. The key is a well-structured policy and deliberate financial planning. Thoughtful fund management can bring significant benefits to both the employer and the employees.
Do you want to manage the Company Social Benefits Fund effectively in your company? Contact our experts. Professional support will help you avoid mistakes and fully use the potential of the Employee Social Benefits Fund.
FAQ – Questions and Answers
What is the Company Social Benefits Fund?
It is a fund created by employers to finance social benefits for employees.
When does an employer have to create an Employee Social Benefits Fund?
When the company hires at least 50 employees (conversion to full-time equivalents).
Can anyone use the fund?
Yes, but depending on the financial and family situation.
What benefits can be financed from the Employee Social Benefits Fund?
Leisure time activities, financial assistance, holiday benefits, culture and sport.
Are the benefits from the Employee Social Benefits Fund subject to social security contributions?
No, if they are granted in accordance with the regulations and law.
How to set up an Employee Social Benefits Fund?
You need to create regulations, consult them with employees and create a bank account.
Can I determine the rules for granting benefits myself?
Yes, as long as they comply with the law and depend on the employee’s situation.
Can the fund be controlled?
Yes, by the National Labour Inspectorate and other authorities.
Does the Employee Social Benefits Fund affect employment costs?
Yes, it can reduce them due to the lack of tax and social security charges on certain benefits.
Can retirees use the Employee Social Benefits Fund?
Yes, if they are included in the fund’s regulations. Former retired employees are often entitled to social benefits.