The funds of the Company Social Benefits Fund [in Polish - ZFŚS] may represent an alternative to the employer – in terms of funding motivation-related benefits for its employees. The statutory definition of the social activity is very broad – an employer may use it both to finance a holiday, cultural and sports-related activity, as well as loan-related activity. All personnel employed in a given company is entitled to social benefits – unless a given employee chooses not to use them - while the employer may decide how to use them.
Does it pay off? An indisputable advantage of the fund is the fact that it is entirely exempted from compulsory ZUS [Social Insurance Institution] contributions (§2(1)(19) of the Regulation of the Minister of Labour and Social Policy of 18th December 1998) and personal income tax (PIT). This is a beneficial solution for an employee even if he or she receives the funding in a form of a prepaid card, e.g. the Edenred Sports and Culture Card, Holiday Card and a Gift Card. Such tools are treated as cash benefits and they are exempted from income tax (Art 21(1) and Art 521) of the Personal Income Tax Act of 26th July 1991 (Journal of Laws of 2018, item 200 consolidated text).
An employer may also benefit from the ZFŚS. It may include in the tax expenses such items as, for example, write downs and increases incurred from operating expenses if the funds representing the equivalent of such write downs and increases have been paid to the ZFŚS’s account.