23.08.2023 line Uncategorized

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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