But that salary included health insurance, pension and holiday allowance, no? How much are you paying/budgeting for those now that you're self-employed?
But that salary included health insurance, pension and holiday allowance, no? How much are you paying/budgeting for those now that you're self-employed?
Be fair - this is a huge pay increase, and by the average standards of pay in Poland is truly gigantic leap. Just for the sake of argument though:
health insurance
I've seen quotes in the region of 2,500 PLN/year for individuals, and that's for pretty damned decent insurance. That's just under $900 USD at current rates.
holiday allowance
Call that 20 days/year, essentially a month off. He's earned that this month if he was on his former wage at least ;)
pension
Default pension payments are close to nothing - maybe a few hundred zł/month, so let's call that $100.
I think kreci should be congratulated, by my eyes he's on the path to well exceeding normal paid employment. Keep up the good work!
"Be fair - this is a huge pay increase, and by the average standards of pay in Poland is truly gigantic leap."
I don't know, that's why I asked. Someone going from €1000 in a job to €2500 self-employed here in the Netherlands has made progress, but not remotely as much as it seems at first. Of course it seems that kreci is also working much less, so per hour he's ahead, I'm just trying to make a real comparison.
I'm not trying to put kreci down here, I'm just saying that the earnings of a business owners are not even close to the gross profit of the company.
That seems very cheap. http://www.justlanded.com/english/Poland/Poland-Guide/Health... lists the self-employment contributions, for the special discounted rate that is only valid for the first 2 years, at 300 PLN = 108 USD = 75 EUR per month. After that, it's three times that. It's not clear to me either if this includes unemployment insurance. That costs several thousand euros a year in itself, easily (here in the Netherlands, I don't think it's 10 times cheaper in Poland - 50% cheaper at the very best, comparing the other numbers).
"<holiday allowance>"
20 days / year is 7% of the total amount of working days, assuming the 20 includes everything - holiday, public holidays, sick days etc. That has an influence on total income, and 20 days including everything is not a lot.
"<pension>"
http://pension3.com/pl/ says that just under 20% of a persons taxable income is by law required to be put into a pension fund (for employees, that is). Depending on how kreci has structured his business, he may not be obliged to do so (I can't really tell from the page, either). Anyway it's fair to assume that at least 10% (and probably more) of a person's gross earnings needs to be put into a pension fund (or alternative savings vehicle) to be able to get a pension comparable to what employees get (70% of average salary it seems). Quite a bit more than you're implying.
Look, I do think too that he should be congratulated. I just don't want to see him think he's rich all of a sudden and then be screwed when the tax man comes around, or when he gets sick, or whatever. But I guess he thought about all of that, he seems like a smart guy - and in that case, I wish he would include those numbers in his reports so that people can get a more accurate idea of his net earnings, rather than his companies gross profit. The two are related but not even close to the same!
Social and health insurance system in Poland seems to be favoring people that are either self-employed or freelancers. Let me give you three examples (I was assuming that 1 PLN ~ 0.33 USD):
- If you are full-time employee in a company then health insurance is relative to your salary (no matter how big it is). The system for calculating it is complicated, but to give you an impression - if you are earning $3000/month, you would have to spend around $230 from it for health insurance.
- If you are self-employed you can pay a minimal amount specified by health department. During first 2 years you have a privilege to pay only 50% of this amount. So if you have started a company in 2010 and you are earning $3000/month, then health insurance will cost you $90.
- Freelancers working on contract basis can pay either a fixed amount of ~100$ (when working exclusively on "umowa o dzielo" contracts) or 9% of the total cost of service (when working on "umowa zlecenia" contract type). By mixing two types of contracts, it's possible for an independent contrator to pay as low as $10/month for health insurance with incomes exceeding $3000.
If you are full-time employee in a company then health insurance is relative to your salary (no matter how big it is). The system for calculating it is complicated, but to give you an impression - if you are earning $3000/month, you would have to spend around $230 from it for health insurance.
Hrm, either that's wrong, or the company I work for has screwed up massively ;) I earn in that region, and my health insurance costs 70-odd zł/month, of which my company pays 50zł, and I pay 20zł. 70zł is around $25, so no idea.
Are you sure you are talking about the obligatory insurance provided by national health service (NFZ)? I have never tried the first option (and hopefully I will never have to), but $25 sounds ridiculously low even for Polish standards.
