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If you’re looking to expand business operations in Europe, hiring in Poland is an excellent option. Poland has a thriving tech industry; the country’s skilled software developers are considered among the best in the world. An abundance of talent combined with the low cost of labor makes Poland an attractive hub for companies looking to expand globally.
That said, hiring employees in Poland is a complex task. Apart from a solid understanding of Polish labor laws, you’ll also need to keep up with tax reforms and compliance practices. You also have to classify your workers correctly to avoid risks, and set up payroll processes to pay your workers quickly and compliantly.
Jump straight to a key chapter
There’s an easier way to ensure you hire workers in Poland and ensure you’re compliant with Polish regulations. You can use an EOR to hire, onboard, and pay employees on your behalf — so you don’t have to.
In this article, we’re going to explain how to use an employer of record in Poland so that you can hire employees in the country with speed and confidence.
Ready to learn more? Let’s dive in.
5 steps to hiring employees in Poland using an employer of record
If you decide to use an employer of record to hire employees in Poland, here are a few steps you should take before making the final call:
Step 1: Weigh up the pros and cons of each potential partner — shortlist potential EOR partners and take a closer look at their expertise and what they offer. Decide what is a must-have for you, and what is a no-go.
Step 2: Take the time to select the EOR service provider best suited to your business needs. To pick the right partner, make sure they fulfill the following criteria:
They have an established entity in Poland.
They offer a global payroll solution.
They handle onboarding, payroll approvals, benefits, and taxes.
They take security seriously and guarantee data protection and compliance.
Step 3: Check the reviews, testimonials, and articles featuring your shortlisted providers to verify what clients say about them. Are there negative reviews? What issues arise most frequently? Do they have experience working with companies in similar geographies?
Step 4: Ensure that the EOR solution has the capability to provide a best-in-class employee experience for your new hires in Poland. After formal considerations and reviews from other businesses hiring in Poland, investigate how the EOR provider serves your employees. Do they pay salaries on time? Are they available for any queries from your staff? Do they care about employee satisfaction, and in what ways do they demonstrate it?
Step 5: Work with your partner to make sure you always provide a fair and equitable compensation package — check if the EOR has the technical means and expertise to offer equitable pay and benefits to your international staff. How can they help you ensure that your team in Poland receives attractive pay and benefits?
Step 6: Make sure your employment partner can protect your intellectual property and maintain data security for your business — hiring your staff through an EOR in Poland means that they’ll be your employees’ data administrators. Choose an EOR that protects your data and offers the highest security compliance standards.
Hire and pay your global team with speed and security
Start using Remote’s employer of record services and local entities to avoid the time, cost, and risk of building your own.
What are the benefits of using an employer of record in Poland?
One of the biggest benefits of working with an employer of record in Poland is eliminating the need to set up your own local entity; a process that is time-consuming, risky, and expensive. A reliable EOR will take care of the following, on your behalf:
Contacting and hiring potential employees
Setting up the payroll system and making sure payroll procedures are compliant with local laws
Submitting income tax return forms and national insurance forms
Keeping track of changes in local labor regulations
Making sure that your business operates in compliance with local labor laws
If you partner with an EOR to hire international employees, they will also handle essential services such as:
Correctly classifying your workers
Creating the right employment contract in line with employee classification
Making sure that the contract of employment is in compliance with local labor laws and includes the details of:
Type of work performed
Place of work
Remuneration
Start date
Work hours
Benefits (both statutory and non-statutory)
Using a global employment partner like Remote means you won’t have to worry about the complexities of hiring, paying, and onboarding employees in Poland because we will do the heavy lifting for you.
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How much does it cost to use an EOR in Poland?
Many EOR companies in Poland do not publicly display their rates or offer a simple pricing structure. That being said, traditional employers of record providers tend to charge enterprise rates (in the thousands of dollars), making their services unattainable to small and medium-sized companies.
On the other end of the spectrum, a number of new EOR services have appeared on the market in recent years, luring clients with very low rates. It’s worth knowing that some of these companies operate via a mix of owned entities and third-party companies, potentially putting legal compliance and data security into question. Read our helpful guide for more information on the difference between owned-entity and partner-dependent providers.
When choosing your EOR partner in Poland, look for a provider that offers the full range of services — onboarding, payroll, taxes, benefits, compliance, and IP protections — at a low flat rate.
Hiring in Poland
In this section, we’re going to take a look at the main factors that shape the Polish labor market — from contract types and statutory benefits to salaries and regulations.
Employment contracts and agreements in Poland
When hiring an employee in Poland, your contract should specify the following elements:
Contract type. There are three types of employment contracts for fixed term, unlimited term, and a trial period.
Date of commencing employment.
Remuneration. Depending on the contract type and individual agreements, this can be hourly, weekly, or monthly.
Type of work. You can sign a contract that covers a wide range of services or mentions the completion of specific tasks and responsibilities.
Place of performing the work. Whether it’s office-based or performed across a wider area/region for remote or mobile staff.
Working time. The standard, full-time work duration is 40 hours/week, which is 8 hours/day.
Contracts can be either signed in person or electronically.
Labor law compliance in Poland
Staying legally compliant in Poland can be challenging due to Polish laws that are designed to favor employees.
When it comes to remuneration, payments must be paid by the 10th of every month or for the hours worked in the month they worked. This can be problematic, especially if employees are paid per hour. Many foreign businesses are used to having a later payroll deadline, i.e., the 15th of each month. In fact, one of the largest U.K. retailers that began operations in Poland has had to change their payday from the end of the month to the 10th of the month to stay compliant with this law.
Additionally, to make sure you’re legally compliant, you also need to consider tax treaties between your organization’s host country and Poland, as they can relieve you of certain taxes. A good example is the tax treaty between Poland and the U.S.
Payroll and payroll taxes in Poland
Let’s now take a look at the main factors which impact payroll management in Poland:
Personal income tax (PIT)
The fiscal year in Poland begins on January 1 and ends on December 31. Full-time employees are subject to two tax rates, which are income-dependent:
Up to 120,000 PLN of taxable base: 12% – 3,600 PLN
Above 120,000 PLN of taxable base: 32% + 10,800 PLN
The employer is responsible for deducting the tax from the salary and settling the payment with the tax office. Benefits in kind such as private healthcare, gym memberships, and gift cards are also considered income and must be included in the tax calculation.
Independent contractors (i.e., those who are self-employed and offer services via registered legal entities in Poland) are responsible for paying their own income tax. The rate varies depending on the chosen arrangement. Contractors can be subject to one of the following:
Progressive tax (i.e. the above-mentioned 12% and 32% tax rate)
A flat tax (19% all year round)
Lump sum tax (so-called “ryczałt”), which lets them apply a flat rate of 2%, 3%, 5.5%, 8.5%, 10%, 12%, 12.5%, 14%, 15%, or 17%, depending on the business type entitled to each taxation level.
Year-end filings
All businesses operating in Poland must submit two annual year-end forms:
PIT-4R form, which displays the total amount of personal income tax paid to the Tax Office in a given year. This must be submitted to the Tax Office by January 31.
PIT-11 form, which lists individual pay, social security contributions, and taxes, has to be submitted to the Tax Office by February 28.
While both of the above-mentioned documents are sent electronically to the Tax Office, the PIT-11 must also be provided to employees in a paper format. All employees, irrespective of their classification, are required to file an annual tax return by April 30 each year.
Social security
There are five social security contributions in Poland:
Pensions and disability insurance
Sickness insurance
Accident insurance
Labor Fund
Employee Guaranteed Benefits fund
Apart from the employer’s share of social security contributions, the employer also has to calculate and pay the employees’ share of social security contributions to the Polish Social Insurance Institution (Zakład Ubezpieczeń Społecznych, or “ZUS”). There are certain exemptions if the employee operates a business or is otherwise entitled to insurance coverage.
Each of the contributions is calculated individually based on the employee’s monthly earnings. More details about social security contributions can be found here.
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An employer of record should support your company’s benefits strategy in Poland. When negotiating the terms of an employment contract with a candidate, here are some of the statutory benefits and paid leave requirements to keep in mind.
Maternity leave
Female employees who become parents are subject to maternity leave, the length of which differs depending on the number of children they have (adopted children are also considered):
One child: 20 weeks
Two children: 31 weeks
Three children: 33 weeks
Four children: 35 weeks
Five or more children: 37 weeks
Pregnant employees are obliged by law to take at least 14 weeks of maternity leave.
Vacation
All employees in Poland have the right to a paid holiday. Its length will depend on the time they remained employed:
Full-time employees with fewer than 10 years of employment: 20 days per year
Employees with over 10 years of employment: 26 days
Part-time employees: the number of days is calculated based on the hours worked
New employees with 0 work experience: the number of days is calculated at the rate of 1/12 of total annual leave per month.
All employees must take a minimum of 14 consecutive days off per year, with any unused vacation days transferred to the next year under an obligation to use them by September 30 of each year.
Holidays
In addition to the vacation leave above, there are 13 paid holidays for employees based in Poland. If any of these holidays take place on a Saturday, the employee is entitled to an additional day off in the given calendar year. Working on any of the above days is forbidden unless the employee works within the essential services industry. Even then, the employee must be given another day off at a later date.
Sick leave
There are a couple of tiers when it comes to sick leave. If the employee becomes ill or disabled due to a work-related accident, they are entitled to 100% of their earnings. Respectively, if the sickness or disability is not related to work, the employee is entitled to 80% of their average salary.
The employer pays sick leave for a maximum of 33 days per year (or 14 days, for employees who are over 50 years of age). If the employee remains ill for anywhere between 34 and 182 days, the Social Insurance Institution will provide payments to the employee. An employee who is unable to work beyond 182 days will receive a permanent disability pension.
Healthcare
Health coverage is provided to all employees through the National Health Fund (Narodowy Fundusz Zdrowia, or “NFZ”). Employers must pay a contribution to each employee, equal to 9% of their monthly earnings. As the public healthcare system is often overloaded, companies commonly provide private healthcare plans as part of their supplementary benefits package.
Pension
The retirement age for male and female employees varies. For the former, it’s 65 years old, while for the latter it’s 60 years old. Both employees and employers are responsible for paying the government pension.
The PPK is a voluntary, statutory pension program in Poland, and employer contribution towards it is a minimum of 1.5% of their employee’s gross salary.
Severance pay and employee terminations in Poland
Polish labor law requires the employer to provide notice before terminating an employee. The advance depends on the employees’ tenure:
Employment shorter than half a year — two weeks’ notice period
Employment of between half a year and three years — monthly notice
Employment of at least three years — three months’ notice
When an employee leaves a company, they can either be asked to use up any remaining holiday days or be compensated for these days in cash.
There are few situations when termination can’t be served to your staff, including:
Any justified leave (holiday, maternity, paternity, or family leave)
Sick leave or temporary work disability
Due to retire in the next four years.
There are a few situations when the employer can terminate the contract immediately. Namely, when the individual:
Commits a felony or severe offense deeming them unfit to continue serving the company
Does not wish to accept a change in work responsibilities or salary, motivated by objective, reasonable cause
Loses a license required for work
Deliberately violates or disregards their work responsibilities, or acts against the company’s best interest
Has been away from work for at least 272 days in a row.
If you decide to hire an EOR to handle your employment in Poland, you won’t have to worry about any of the above regulations in-house. At Remote, we strongly believe that all employees should be fairly compensated, irrespective of their role and location.
Remote’s team of EOR specialists can help you with any specific questions, and Remote’s purpose-built global employment platform will manage all of your HR and payroll needs. Remote also makes it easy for you to create a competitive global benefits package for your employees and global contractors.
Download your Global Benefits Guide and attract top global talent
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What are the risks of employee misclassification in Poland?
The Polish Labor Code makes a distinction between employees and contractors, so you’ll have to be careful about worker classification while hiring workers in Poland.
Contractors are self-employed individuals who offer services to more than one client at a time. They can decide their own work hours and location and are paid a fixed rate as agreed in the employment contract. They are not entitled to benefits or protected by Polish labor laws and are responsible for filing their own taxes.
An employee’s working hours, performance, and schedule, on the other hand, are dictated by the employer, who pays them a regular salary for their services. Importantly, employees are protected under Polish labor law and are entitled to a range of statutory benefits.
If you misclassify your workers, your company might have to pay hefty fees and penalties.
For instance, if the Polish authorities discover that you’ve accidentally or intentionally misclassified your worker, you may be fined between 1,000 and 30,000 PLN. If a contractor has to be reclassified as a full-time employee, you might be obligated to back pay your employee up to 5 years of unpaid social insurance contributions or compensation for overtime and holidays.
Worker classification is tricky to figure out, especially if you’re not an expert in Polish labor regulations. However, if you choose to work with an employer of record in Poland, you’ll be able to easily mitigate the risk of employee misclassification.
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Get started with an EOR in Poland
There’s a huge hiring potential in Poland. Poland’s talented workforce, coupled with a low cost of employment, makes it an ideal place for your business to hire new team members and expand globally.
However, the country’s labor laws are complicated. You’ll have to understand the nuances of worker classification, tax laws, and compliance practices to make sure you’re safely hiring workers in Poland.
The best way to stay compliant with Polish employment laws is to rely on a purpose-built EOR like Remote. An EOR can manage the hard work of hiring and paying workers across the world, so you can focus on finding the best talent for new roles regardless of their address. If you want to hire in Poland, Remote makes it easy by:
Guaranteeing compliance for employment in Poland on your behalf
Handling the entire recruitment and payroll process to pay your employees or contractors in Poland
Creating locally competitive and globally equitable benefits packages to offer candidates in Poland so that you can attract the best talent
Get started with Remote and expand your team in Poland today! Or learn more about how Remote can help you hire globally without local entities.
Your guide to switching EOR providers
Use this guide to learn how easy it is to switch from a different EOR provider and start employing your global team with Remote. We walk you through the key steps so you understand what’s involved.
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