employer of record
Employer of record – Poland
For conducting business activities in the territory of Poland, foreign entrepreneurs from EU member states can establish branches with their registered offices in Poland
1.Market overview
2.Entering the marke
3.Comparison of employee agreements
4.Pay and taxes
5.Payroll timeline
6.Leave Policies
7.Termination Policy and severance
8.Time off during the year
9.Onboarding of employees
10.Employer cost breakdown
Market overview:
| Currency | Corporate Tax | VAT | Workforce Size |
|---|---|---|---|
| PLN | 19% | 23% | 17.1 million |
Entering the market:
For conducting business activities in the territory of Poland, foreign entrepreneurs from EU member states can establish branches with their registered offices in Poland. Other foreign entrepreneurs, for conducting business activities in the territory of Poland, can establish branches on the basis of reciprocity, provided that ratified international agreements do not state otherwise.
A foreign entrepreneur establishing a branch is obliged to appoint an authorized person in the branch to represent it. They may commence activities within the branch after the branch is registered in the National Court Register of Entrepreneurs.
Furthermore, a foreign entrepreneur who has established a branch is obliged to:
- Use the original name of the foreign entrepreneur, along with the translated name of the legal form of the entrepreneur into Polish, and adding the words “branch in Poland,” to identify the branch.
- Maintain separate accounting in Polish for the branch, in accordance with the accounting regulations. Often requires hiring a polish accountant.
- Notify the Minister about any changes in the factual and legal status regarding the opening of liquidation of the entrepreneur or the loss of the right to conduct business activities, within 14 days from the date of their occurrence.
Comparison of available employee agreements:
| “Umowa o Pracę” | “Zlecenie” | “Umowa o dzieło” | |
|---|---|---|---|
| Tax Rates | Up to PLN 120.00 – 12%Above PLN 120.000 – 32% | Up to PLN 120.00 – 12%Above PLN 120.000 – 32% | Up to PLN 120.00 – 12%Above PLN 120.000 – 32% |
| Benefits | Paid leave, health insurance, pension | not entitled to employee benefits such as paid leave, health insurance, or retirement benefits. | not entitled to employee benefits such as paid leave, health insurance, or retirement benefits. |
| Employer Contributions to pension funds | yes | no | no |
| Total employer contribution(%of gross salary) | 20.4% | 16,2% | no |
| Employee Contributions | 18,16% | 18,16% | no |
| Termination | Notice period between 2 weeks and 3 months | Early termination if both parties agree | Early termination if both parties agree |
Pay and Taxes:
Minimum wage: 3,600 PLN
Overtime Pay: Mandatory up to 4h daily, 48h weekly, and 150h yearly
Standard working hours: 8 per day or 40 per week
Payroll timeline:
| Schedule | Date |
|---|---|
| Payroll Cycle | Monthly |
| Payroll Cut off date | 20th of the month |
| Invoice issuance date | 26th of the month |
| Payment date | Last date of the month |
Employees who signed the agreement after the 5th of a particular month will get paid on the 10th of the following month
Employees are not legally entitled to any bonus. Bonuses can be awarded at the discretion of the employer.
30.000 PLN is the tax-free amount in Poland -it is awarded in the form of a tax deduction
For earners above 1 million pln an additional 4% tax is applied
Leave Policies:
Parental leave: 32 weeks for a single child and 34 weeks if more tha one child is born. Either parent can take parental leave. Social Insurance (ZUS) pays 100% of average salary for the first 6 weeks, and 60% of average salary for the following weeks.
Sick Leave: Standard of 182 paid sick days, 270 for employees who are sick during pregnancy. First 33 days paid by the employer, following days paid by ZUS.
Termination and severance:
Mode:
- Voluntarily by the employee
- By mutual agreement
- By the employer based on:
- Probation period
- Disciplinary dismissal
- Performance due to unsuitability for the job
Severance is only required for firms that have above 20 employees and is based on the length of employment:
1 month of salary for those employed up to 2 years, 2 moths of salary for those employed up to 8 years, and 3 months worth of salary for those employed foe beyond 8 years.
Notice periods: 2 weeks for those employed for up to 2 months, 1 month for those employed for up to 3 years, and 3 months for those employed for more than 3 years.
Paid time off / year
20 days for those employed for less than 10 years, and 26 days for those employed for longer than 1 years.
Onboarding of employees:
Time: 5 business days – requires a medical check
Documents: passport / ID, personal questrionarie, declaration of tax deductible expenses, PIT-2 Personal Income Tax, Registration of an employee in ZUS, proof of employment eligibility, proof of qualifications necessary for the role
Employment cost breakdown:
| Cost | Amount |
|---|---|
| Pre-employment medical tests | PLN 200 |
| Pension fund | 9.76% |
| Accident Insurance | 0.3%-3.4% |
| Labor Fund | 2.45% |
| PPK | 1.5% |
| Guaranteed Employee Benefits Fund (of UoP) | 0.1% |
Total employer costs: 20.4%
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