With seasonal agricultural worker tax – a lower tax burden for the employer

The Ministry of Agriculture reminds that growers of fruits, berries and vegetables, including potatoes, can apply a special seasonal agricultural workers' income tax regime to their employees, thus significantly reducing the tax burden on labor. This is stipulated by law "On personal income tax".

This preferential tax regime can be used by an employer (farmer) who uses agricultural land owned, permanently used or leased for growing fruit trees, berries or vegetables and has applied for the single area payment in the current year.

The seasonal agricultural worker income tax regime may be applied to a seasonal agricultural worker (employee) who is employed from April 1 to November 30 and works in seasonal work - sowing or planting fruit trees, berry trees and vegetables, caring for crops and plantations, harvesting, sorting fruits, berries and vegetables.

The maximum period of employment for which a seasonal agricultural worker can be subject to this special income tax regime cannot exceed 65 days of work (in the period from April 1 to November 30), and the maximum income of a seasonal agricultural worker cannot exceed EUR 3,000. If any of these limits are exceeded, an employment contract can be concluded with the seasonal agricultural worker (employee) and labor taxes are paid according to the general procedure.

The income tax for a seasonal agricultural worker is 15 percent of the agricultural worker's earned wages, but not less than 0.70 euros for each day worked. A seasonal agricultural worker (employee) becomes socially insured for a pension if the monthly income earned by one or more employers exceeds 70 euros.

An employer (farmer) who employs seasonal agricultural workers must submit a report on the employed persons, their income and calculated income tax to the State Revenue Service (SRS) once a month.

Employers (farmers) who employ seasonal agricultural workers must use the Rural Support Service (RSS) information system, registering seasonal agricultural workers, the date of income generation, the form of the concluded contract and the remuneration calculated for seasonal agricultural workers for work. The RSS information system automatically calculates the income tax of seasonal agricultural workers. On the day after the last day of the month of employment, the RSS information system allows employers to obtain all data entered into the RSS information system during the month and the calculated tax amount in a summarized form for submission to the SRS.

In turn, Cabinet of Ministers Regulations No. 166 of March 25, 2014 “Regulations on the Rural Support Service Information System for Ensuring the Application of Income Tax for Seasonal Agricultural Workers” determines that an entrepreneur has access to the RSS information system if the employer (farmer) who employs seasonal agricultural workers has indicated at least one of the crop codes listed in the annex to the regulations in the single area payment application.

Source: Ministry of Agriculture