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Contracts of mandate: benefits for companies and students
Contracts of mandate with students are a common form of employment in many companies, bringing substantial savings for the client, especially because no ZUS contributions are due. This privilege applies to students under 26. Once they reach that age, however, students are covered by the ordinary social insurance rules despite retaining student status.
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Definition of a student and status rules
Under the Higher Education Act, a student is a person enrolled in first-cycle, second-cycle or long-cycle master's studies. Student status lasts until:
- the last examination required by the course of study is completed,
- the diploma examination is completed,
- the last internship required by the programme is completed,
- the person is removed from the student register.
The entrepreneur's obligations
Social and health insurance
An employer engaging someone under a contract of mandate must register them for health and social insurance in the following circumstances:
- from the day after they are removed from the student register,
- from the day after they defend their thesis, even if they are not yet 26,
- from the day they turn 26 (this age expires at the start of the last day on which the person is 26).
Students continuing into second-cycle studies
Consequences of unclear regulations
The regulations do not specify whether a person who has completed first-cycle studies and plans to continue into second-cycle studies may still be treated as a student for social insurance purposes. Unfortunately, the ZUS position is unfavourable: the employer must pay contributions for a student engaged under a contract of mandate between the first and second cycles of study.
Student insurance exemption
Note that the following people:
- participants in doctoral studies (third-cycle studies),
- participants in postgraduate studies,
are not regarded as students for insurance purposes.
Student ID and health insurance
A student ID card or a certificate issued by the dean's office confirms student status. Students up to age 26 can be covered by their parents' health insurance. If that is not possible, a student can apply for health insurance through the university.
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Summary
The rules for employing students under contracts of mandate are the most advantageous. They do not have to be registered for social insurance and therefore do not pay ZUS contributions. In addition, their remuneration up to a specified limit is exempt from income tax. If a student is employed under an employment contract, all types of social insurance apply regardless of age. Therefore, for a student under 26, a contract of mandate is the more advantageous choice.
If you are a student interested in working at a fast-growing company that values development, you have come to the right place! TaxCoach is looking for you!
Visit Jobs → Student internships to learn more.
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