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Payroll in Poland

Payroll in Poland

Payroll in Poland is the list of a company’s employees who need to be remunerated by the company for their work, for a pre-determined period, and on a given date, usually monthly.

Payroll services in Poland can be outsourced and our team can offer this type of service. The employer is required to make social security contributions and advance payments on the income tax of his employees’ salary.

In Poland, social security contributions are remitted by the employer, calculated as part of the employee’s taxable earnings. To these, the employee himself will also make his own healthcare contribution. Company owners will need to observe these payments.

Below, you can read more about the social security contributions, and what you are expected to follow in terms of payroll management in Poland.

Our Polish company formation agents are able to answer any other questions about corporate taxation, the applicable rates, as well as the reporting requirements.

Social security contributions in Poland

In Poland, the employer is the one responsible for remitting the social security contributions. The following rates and principles apply:

  • both the employer and the employee make social security contributions of a total of about 35% of the employee’s salary;
  • approximately 21% of the contributions are paid by the employer and 14% by the employee;
  • the employee contributions are deductible when calculating the taxable earnings for the respective employee;
  • the employer is also the one to collect and remit the employee’s 9% healthcare contribution (in some cases, this can be lower);
  • both the employee and the employer must pay the pensions and disability insurance (approximately 16% for the employer and 11% for the employee);
  • the employee must also pay the sickness insurance, amounting to 2.45% of the gross salary;
  • the employer makes contributions to the Labor Fund, amounting to 2.45% of total gross salary, and to the Employee Guaranteed Benefits Fund, amounting to 0.10%.
  • Employee Capital Plans apply to companies in Poland irrespective of their number of employees (a type of retirement savings plan).
 Quick Facts  
Supplementary employees bonuses and benefits

– annual bonus,

– holiday bonus,

– 13th salary,

– meal vouchers,

– gym memberships, etc.

Our payroll services

– maintaining employee records,

– tracking work hours,

– calculating wages,

– issuing paychecks to employees,

– processing bonuses & premiums, etc.

Social security contributions 

– 21% paid by the employer (approx.);

– 14% paid by the employee (approx.)

Mandatory employer contribution

– accident insurance,

– labour fund,

– pensions & disability insurance,

– employee guaranteed benefits

Mandatory employee contribution

– pensions & disability insurance,

– health insurance, sickness insurance

Payroll cycle

Monthly, generally before the 10th day of the following month.

Our accountants can adjust the payroll cycle according to your needs.

Annual paid time off

20 – 26 days, depending on the employee’s seniority

Sick leaves

Up to 33 days for most employees;

Employees aged 50 years or over are entitled to up to 14 days.

Public holidays

13 days

Working hours 8 hours/day – 5 times/week
Overtime regulations

Overtime must not exceed 150 hours in a calendar year (unless specified in employment contract).

Weekly working time should not exceed 48 hours.

Employee Capital Plans – characteristics

A pension savings scheme paid by both employees and employers;

Employees can opt out of the scheme or voluntarily enroll.

Notice period in Poland

2 weeks – 3 months, depending on the employee’s duration of employment

Personal income tax

– 12% for income up to PLN 120,000

– PLN 10,800 + 32% of the excess over PLN 120,000 for higher incomes

Assistance and additional services

We offer payroll and accounting services in Poland.

Additionally, we can also assist in company formation.

Additionally, employees must also pay the accident insurance, which varies on their company size and business sector. Our payroll services in Poland will take into account these criteria. 

Please note that the rates listed above were in place at the time this article was written. These can be subject to change.

Do you have questions about other issues, other than the contributions that are made as part of payroll in PolandOur team can answer your questions.

Leaves and public holidays in Poland

A payroll service in Poland calculates and processes employee pay taking into account leaves and public holidays. Full-time workers are entitled to 20 days of annual leave. After 10 years of work experience, they are entitled to 26 annual leaves.

There are also 13 public holidays in Poland, where employees are entitled to paid time off. If a public holiday falls within the annual days off, it is considered part of the annual leave entitlement.

Our payroll services in Poland will also take into account the employee’s sick days off. In most cases, sick leave is paid at 80% of the employee’s average annual salary. However, pregnancy and work-related accidents are fully paid for by the employer.

Employees under 50 years old receive up to 33 days of paid sick leave directly from the employer. Employees aged 50 and older receive up to 14 days of paid sick leave. After day 33 and day 14 respectively, The Social Insurance Institution (ZUS) covers the sick leave payments.

Additionally, employees are also entitled to special event leaves (such as weddings, child’s birth, funerals, etc.), childcare leaves, military leave, disability leave, paternity, and maternity leave. Our payroll specialists in Poland can explain more about them.

If you wish to open a company in Poland, it is important to know the regulations concerning the employee leaves. Our team can offer assistance in this case.

Overtime in Poland

Payroll in Poland includes calculating the employee’s total wage based on his/her overtime worked hours. The standard 5-day workweek consists of 40 hours, any working hour above this limit is considered overtime (exceptions apply to some work sectors and senior management professionals).

Employees are entitled to various forms of compensation for overtime work. A 100% additional remuneration applies for overtime exceeding the 40-hour weekly work standard, for overtime during night hours, Sundays, or public holidays that are not regular work days for the employee. The 100% additional remuneration is calculated based on each hour worked beyond standard hours. 

For overtime worked on Sundays and public holidays that are part of the employee’s usual working schedule, employees receive an additional 50% of their regular pay for each hour worked beyond standard hours. Our payroll service will determine your employee’s overtime hours.

Additionally, employees can also opt for compensation in the form of free time.

If you opened a company in Poland that has different workdays than the standard workweek, we recommend consulting with our payroll specialists.

Taxation in Poland

All companies incorporated in Poland, whether as a locally registered legal entity or as a branch of a foreign company, are expected to follow the tax laws and the requirements for tax filing and payment, along with preparing and submitting the annual financial statements.

Payroll in Poland is the total amount of wages payable by a company. To these wages, business owners will also need to add the costs incurred with the social security contribution portion payable by the employer, as well as all the other taxes. Our team lists some of the most important taxes for companies below:

  • Corporate income tax: 19% standard rate and 9% reduced rate (available to small taxpayers and those companies starting their activities with revenues that do not exceed 2 million EUR in the respective year; certain exceptions apply;
  • Dividends: generally exempt from taxation (conditions apply); when taxable, dividends can be subject to a withholding tax of 19%;
  • Value-added tax: a standard rate of 23% and two reduced rates of 8% and 5% apply; some types of goods and services can be zero-rated or exempt;
  • Other taxes: stamp duty, real property tax, transfer tax; our team can answer your questions concerning these taxes;

Additionally, Poland has signed more than 80 tax treaties with other EU and non-EU countries.

If you are interested in more details about the company formation in Poland, our team can assist you.

Tax compliance and requirements

Company owners in Poland should be concerned with all their tax liabilities, the needed submissions, and filings, in addition to the Polish payroll. They must make sure that they observe the tax filing and payment calendar (which also includes the deadlines for the VAT filing and payment for companies that are subject to this tax).

Receiving personalized solutions and answers to tax-related questions is easier when outsourcing these matters to a local team of Polish accountants, such as our own.

Statistics about employment in Poland

Regarding the subject of payroll in Poland, our team has gathered some interesting statistics about the number of employees in the country and about their demographics. The statistics are as of May 2023:

  • Approximately 8 million men were employed in Poland;
  • Approximately 7 million women were employed;
  • 597,700 foreigners were employed;
  • The highest percentage of employees (29%) were aged between 35-44 years.

If you require additional services, we also handle company incorporation in Poland.

Contact us for more information about payroll, the relevant taxes, and tax compliance in Poland.