Payroll in Poland:
What you need to know
Poland has a unique set of labor laws and tax regulations that can be quite different from those in other countries. Read through out comprehensive guide to help you navigate the Polish market.
Will Hawkins
Content Writer
Key Chapters:
Are you considering expanding your business or hiring employees in the Polish market? With the country’s status as an economic powerhouse in the heart of Europe, we’re not surprised. That’s why the team at Gibson Watts Global decided to put together this comprehensive guide on payroll in Poland, giving you everything that you need to know about the intricacies of it.
Are you considering expanding your business or hiring employees in the Polish market? With the country’s status as an economic powerhouse in the heart of Europe, we’re not surprised. That’s why the team at Gibson Watts Global decided to put together this comprehensive guide on payroll in Poland, giving you everything that you need to know about the intricacies of it.
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What employment contracts and agreements are there in Poland?
In Poland, employment contracts are a fundamental aspect of hiring and payroll. There are generally three main types of contracts that businesses need to be aware of:
- Fixed-Term Contracts: These are typically used for temporary positions. This contract has a set end date.
- Indefinite-Term Contracts: These are more commonly used for permanent positions. This contract also has no specified end date and requires termination notice from either party.
- Civil-Law Contracts: These are used for freelancers and self-employed workers. These contracts are subject to different taxation rules than FTCs or indefinite-term contracts.
When hiring in Poland, it is crucial for businesses to have the appropriate contracts in place, as this will impact the employee’s rights, obligations, and tax liabilities.
What are the minimum wages, taxes, and social security contributions?
Poland has a national minimum wage, which is adjusted annually. As of 2023 this stands at 3,600 PLN (or approximately €785) per month.
Employers operating in Poland also need to be aware of the salary taxation system, including income tax (PIT) and social security contributions (ZUS). These income tax rates vary depending on the employee’s income level, with lower rates for lower salaries. A breakdown of the personal income tax brackets can be found on the Polish government website.
Social security contributions in Poland are also mandatory for both employees and employers. These contributions cover a range of benefits, such as healthcare, pensions, and unemployment insurance.
What are Tax Identification Numbers (NIP) and Personal Identification Numbers (PESEL)?
Every employee in Poland should have both a Tax Identification Number (NIP) and a Personal Identification Number (PESEL). The NIP is used for tax purposes, while the PESEL is a number for personal identification.
What are the tax reporting requirements in Poland?
Poland’s tax and reporting requirements can be complex. Employers must deduct income tax and social security contributions from employees’ salaries and report these deductions to the relevant authorities.
Additionally, employers are required to file monthly and annual payroll tax returns, including PIT and ZUS payments, through the country’s electronic system.
What are the typical working hours and overtime rates in Poland?
Polish labor laws stipulate the maximum number of working hours, including overtime. These working hours are usually from 8:00 AM to 4:00 PM, or 9:00 AM to 5:00 PM, spanning over 40 hours per week.
In general, overtime should be compensated at a higher rate, and employees have the right to a minimum rest period between shifts.
What are the typical annual leave entitlements?
Poland has a set of public holidays, and employees are entitled to paid time off on these days. On top of this, employees are entitled to paid annual leave, and the number of days depends on their length of service.
Generally, employees who have been working for fewer than ten years are entitled to 20 days of paid leave, whereas employees who exceed ten years are entitled to 26 days. Part-time employees are entitled to leave on a pro-rata basis.
How do I terminate an employment contract?
Terminating an employment contract in Poland requires compliance with specific legal procedures. Severance pay may be required in certain situations, such as in the event of dismissals or redundancies.
Outsourcing Payroll in Poland
Due to the various tax regulations and reporting requirements, managing payroll in Poland can be a complex process. That’s why many organizations choose to outsource these liabilities to an in-country partner to ensure compliance, accuracy, and more time to focus on capitalizing on the opportunities of the Polish market. Here at Gibson Watts Global, we work with countless businesses who are expanding their horizons into Poland.
Be sure to keep up with the latest changes in Polish labor and tax laws and seek guidance when needed. For more information on the Polish market, explore our Poland country guide today.
To learn more about how we can simplify your expansion into Poland, speak to our Poland global expansion team today.