Employer of Record in Poland

An employer of Record stands as the legal employer of your chosen worker.  The Employer of Record has to ensure that all Polish compliance aspects like payroll, taxes, statutory benefits, and employment contracts are met.

Setting up a business in another country can be complicated and risky without proper knowledge. An EOR makes hiring easier and reduces legal risks. You can trust Infotree’s Employer of Record Solutions to ensure you remain on top while running a business in Poland.

Responsibilities of the Employer of Record in Poland:

• Upholding compliance with local employment laws.
• Efficiently processing local payroll.
• Filing employment-related returns and taxes.
• Issuing timely payslips to employees.
• Reliable distribution of salary payments.

Why Hire Employees in Poland?

Poland is the 6th most populous member state of the EU. The country holds a strong, educated talent pool, as seven out of ten tertiary-educated adults hold a master’s degree. With relatively low severance pay obligations and flexible working arrangements, the country’s employment laws also favor employers.

With government incentives for foreign investment and a rapidly growing economy, Poland has one of the most attractive business climates for foreign investors. If you want to expand your business in Europe, there are limited options compared to Poland. Here’s why:

• Educated workforce

58% of the population holds a tertiary education degree, highlighting that Poland’s workforce is incredibly well-educated. Not only that. They are also motivated, hardworking, and ambitious compared to other Organization for Economic Co-operation and Development (OECD) countries.

Krakow and Warsaw have a deep talent pool, producing 40,000 and  59,000 graduates yearly. You can build strong relations with the universities in Poland during talent acquisition before students graduate.

• Developed economy

With a strategic location in Central Europe, Poland is a natural hub for international businesses that want to expand their regional operations. It is the sixth-largest country in the EU by GDP.

The country has outpaced many other countries as it has achieved steady economic growth in the recent past. All these factors have combined to build a thriving job market with numerous opportunities for foreign and local workers.

The consistent economic growth has paved the way for better working conditions and higher employee salaries. These factors make Poland an attractive destination for top-talented job seekers looking for a better quality of life.

• Diverse ecosystem with great quality of life

The influences from various cultures and traditions make Poland diverse, which helps the country attract talent from different backgrounds. The multicultural experience helps an individual learn about and acknowledge different perspectives.

Apart from the diversity, the quality of life in Poland is amazing. The modern hospitals and clinics offer comprehensive medical care to job seekers. Also, Poland offers astonishing social services like affordable housing and education, among others.

The vibrant social scene offered by the Polish cities with scintillating bars, restaurants, and entertainment options, makes it a great place to work and enjoy life.

Hiring in Poland

Before hiring in Poland, international companies must establish a business entity. The process involves several steps, including registering with the National Court Register, opening a bank account, and more. Once the basics are done, you can hire in Poland through popular Polish job boards like Olx.pl – praca, LinkedIn, and Pracuj.pl. You can also publish advertisements on social media platforms or local newspapers, which can help you attract the right candidate.

However, the country’s labor laws, cultural nuances, and employment practices can challenge those unfamiliar with the Polish employment landscape. You can choose Infotree’s Employer of Record Solutions and work with our team to get detailed information about data protection laws, employees’ rights, working remuneration, timings, conditions, and more.

Poland’s Labor Code

The Labour law in Poland is primarily outlined in the 1974 Labor Code, which covers work hours, pay, overtime, leave, and job termination. Another key law is the Non-working Days Act from 18 January 1951.

Under the Polish Labor Code, a full-time worker’s regular hours shouldn’t exceed 8 hours daily and 40 hours weekly in a typical five-day week. With overtime, the total weekly hours shouldn’t surpass 48 hours.

The Polish labor law will have a significant change in 2024. In 2024, the minimum wage will see two adjustments. The first rate will apply from January to June, and a revised rate will be in place from July through December. These are the set wage rates for 2024.

	January – June	July – December
Gross Monthly Rate	4,242 PLN (approx EUR 978)	4,300 PLN (approx EUR 992)
Gross Hourly Rate	27.70 PLN (approx EUR 6.39)	28.10 PLN (approx EUR 6.48)

Overtime Compensation: – Employees must be paid their regular wage for each hour of overtime work. Also:

• They receive an extra 50% for overtime on regular workdays, including “working” Sundays and holidays.
• If the overtime falls under night-time work, the additional remuneration rate increases to 100%.

Overtime Limitations: – Overtime cannot exceed 150 hours in a calendar year. However, certain agreements like collective bargaining agreements or employer work regulations might have specific provisions.

Night-time Overtime: – Employees who work overtime during night hours are entitled to 100% additional remuneration for every hour worked.

Raising the minimum wage impacts not just the base pay, but also other job-related benefits. This includes

• Night shift bonuses,
• Pay during idle periods,
• Maximum severance pay when let go for reasons beyond the employee’s control,
• Payouts for workplace discrimination or harassment
• Calculation basis for sickness and maternity benefits, and
• Deduction-free portion of an employee’s pay.

In 2024, the expected average monthly salary in the national economy will be around PLN 7,940 by the end of 2024, this translates to approximately EUR 1,495 (source: Trade Economics).

Contractors Vs. Full-time Employees In Poland

You can hire qualified employees through a state-paid university system renowned for producing specialized and innovative workers. Knowledge of Poland’s labor code and type of employment contract makes hiring and managing employment relationships easy.

Here’s a table explaining the difference between contractors and full-time employees:

	Contractors	Full-time Employees
Employment Relationship	Short-term or project-based contracts	Long-term relationship with ongoing duties
Payment Structure	Typically paid per project or hourly rate.	Regular monthly salary with potential bonuses and raises
Benefits	Usually do not receive company benefits like health insurance or paid leave.	Entitled to benefits like health insurance, paid leave, and retirement contributions.
Tax Responsibilities	4Responsible for their own tax filings and payments.	4Employers handle tax withholdings and contributions to social security.
Job Security	Less job security; contracts can end once the project is completed.	Greater job security with protections against unfair dismissal.

Understand both types of employment to ensure you assemble a team that aligns perfectly with your organizational needs.

Employee Benefits in Poland

When hiring in Poland, it’s essential to understand the various benefits employees are entitled to, as these play a crucial role in attracting and retaining top talent.

1. Annual Leave: – In Poland, annual leave is deeply rooted in the country’s labor laws. The number of days an employee is entitled to depend on their service years. Newer employees start with 20 days of annual leave. However, as they gain more experience and tenure, this can increase to 26 days. The system is designed to reward employees for their loyalty and commitment to their workplace.

2. Maternity and Paternity Leave: – Maternity and paternity leave in Poland are structured to support families during the crucial early days of a child’s life. Mothers are given 20 weeks of maternity leave for a single birth. This duration increases if multiple births, such as twins or triplets, ensure mothers have ample time to care for their newborns. On the other hand, fathers are entitled to 2 weeks of paternity leave, allowing them to support their partners and bond with their children during this period.

3. Bonuses: – Bonuses have become integral to the compensation package. While not legally mandated, many companies in Poland offer annual bonuses to their employees. These bonuses reward solid yearly performance and can significantly boost an employee’s earnings. The distribution and amount of these bonuses are typically at the employer’s discretion. Some companies have a structured bonus system based on performance metrics, while others might offer discretionary bonuses based on the company’s overall profitability or other criteria.

4. Sick Leave: – Sickness can be unpredictable, and Poland’s labor laws account for this by providing provisions for sick leave. Employees are required to present a medical certificate to avail of this benefit. The compensation structure during sick leave is unique. The employer is responsible for the compensation for the initial period, which is 33 days for employees under 50 and 14 days for those 50 and above. After this period, the responsibility shifts to the Social Insurance Institution, ensuring employees are not financially burdened during prolonged illnesses.

5. Public Holidays: – Public holidays are a time for rest and reflection. In Poland, employees are entitled to 13 public holidays annually. These holidays encompass significant national and religious observances, ensuring employees get time off to celebrate and observe these important days with their families.

6. Healthcare: – Healthcare is a fundamental right; in Poland, this is ensured through the National Health Fund. This fund ensures that all employees have access to essential medical services. It is a comprehensive system funded through contributions from both employers and employees, providing a range of healthcare services, from basic consultations to specialized treatments.

7. Retirement Benefits: – Planning for retirement is crucial, and Poland has a robust system to ensure its citizens are well taken care of in their golden years. The country’s pension system is divided into three pillars. The first pillar is mandatory and involves contributions to the Social Insurance Institution. The second mandatory pillar directs contributions toward private pension funds managed by financial institutions. The third pillar is voluntary and allows individuals to invest in private pension products, potentially earning higher returns.

8. Health Insurance: – Healthcare is a fundamental right for citizens in Poland. While the government provides basic healthcare services through the National Health Fund, many employers offer supplemental health insurance as an added benefit. This private health insurance can cover services that might not be included in the public healthcare system, such as certain specialist treatments, dental care, or optical services. By offering private health insurance, employers can ensure their employees can access a broader range of medical services without incurring out-of-pocket expenses.

Probation & Termination

In Poland, there isn’t a distinct “probation” term. Instead, it’s a “trial period” lasting up to 3 months. A special employment contract is drafted for this duration. Post this period, a new employment contract, either fixed-term or unlimited-term, is executed as per the Poland labor code.

Notice Period: – The notice period refers to the duration between when an intention to end employment is declared and the actual termination date.

For contracts with a probationary duration, the notice period is based on the length of that probation. Specifically:

• For probation periods of up to 2 weeks, the notice is 3 business days.
• For probation durations exceeding 2 weeks but less than 3 months, it’s 1 week.
• For 3-month probation, the notice extends to 2 weeks.

The Labour law in Poland is primarily outlined in the 1974 Labor Code, which covers work hours, pay, overtime, leave, and job termination. Another key law is the Non-working Days Act from 18 January 1951.

For indefinite or fixed-term contracts, the notice period is influenced by the total time an employee has served with the specific employer:

• Employees with less than 6 months of service have a 2-week notice.
• Those with a tenure of 6 months or more but less than 3 years get a 1-month notice.
• If an employee has served for 3 years or more, the notice period is 3 months.

An employer can request that employees refrain from working during their notice period. In such cases, the employee’s salary must still be paid in full.

If an employer decides to terminate an employee and provides a notice period of two weeks or more, the employee has the right to take time off to look for another job. The employer must continue paying the employee’s regular wages during this time.

Should the employer wish, they can ask the employee to utilize their accrued statutory leave during the notice period. If the leave remains unused, the employer must compensate the employee.

If the notice period is given in terms of months, the termination becomes effective at the month’s end. If specified in weeks, the termination date falls on a Saturday.

Severance: Based on the duration of their service, employees are eligible for severance pay:

• Employees with less than two years of service receive a month’s salary.
• Those with service durations between two and eight years get two months’ wages.
• Employees with over eight years of service are entitled to three months’ salary.

Severance is mandatory for businesses with a workforce of over 20 individuals, especially if the company initiates the termination process.

Payroll and Taxes in Poland

Poland has a comprehensive taxation system that both central and local governments oversee. As of 2017, the tax revenue constituted 33.9% of the country’s GDP. The primary pillars of the Polish tax system include income tax, Social Security, corporate tax, and the value-added tax (VAT).

All these taxes are applied at the national level. Income earned in Poland is subject to a progressive income tax system, and there are also specific value-added tax rates for various goods and services. Employees and employers contribute to social security, covering pensions, disability, sickness, and accident insurance.

Employer Taxation

Both employers and employees are responsible for making social security payments, typically around 35% of an employee’s wages. While there are set limits, the employer’s share ranges from 19.21% to 22.14% of the employee’s total earnings.

A portion of the employer’s contribution is allocated towards accident insurance. The exact amount is determined by the number of employees and the industry in which the business operates.

For 2023, contributions towards pension and disability are limited to earnings up to 208,050zł. Salaries exceeding this threshold are exempt from further contributions by the employer.

It’s the employer’s responsibility to deduct the employees’ contribution and forward it, along with their own, to the Social Security Authorities, known as ZUS.

Employee Taxation

Individuals living in Poland are taxed on their global earnings, while those not residing there are taxed only on the income they earn within its borders. To qualify as a resident, one must stay in Poland for over 183 days annually or have their primary personal or economic activities centered there.

GROSS INCOME	TAX RATE (%)	TAX
Up to 30,000	0%	NIL
30,000 to 120,000	12%	12% of income minus a tax allowance of PLN 3,600
Over 120,000	32%	PLN 10,800 + 32% of income exceeding PLN 120,000 (including the calculated tax allowance)

Workers who are 26 years old or younger can enjoy a tax exemption on earnings up to 85,528zł annually.

Benefits of Using an EOR in Poland

Working with an employer of record in Poland helps you escape the hassles of setting up your local entity. With a trustworthy EOR, you can expect:

• Recruitment and onboarding of potential team members
• Establishment and management of a compliant payroll system in line with local regulations
• Handling of tax filings and insurance documentation
• Monitoring updates in local employment regulations
• Ensuring your operations align with local labor standards.

If you want your EOR to handle your hiring process, they can help you with:

• Properly categorizing your employees
• Drafting appropriate employment agreements based on worker classification
• Ensuring the employment agreement adheres to local labor regulations

Using Infotree Global’s Employer of Record Poland solutions can remove the complexities of hiring, paying, and onboarding employees in Poland because we will do the heavy lifting for you.

Visa and Work Permits in Poland

As a member of the European Union (EU), Poland allows citizens from other EU countries to work without a permit. However, most non-EU individuals will require both a visa for residency and a work permit for employment.

Non-EU citizens looking to work in Poland, such as:

• Work Permit (Type A): For those employed by a Polish company.
• Work Permit (Type C or E): For individuals transferred within a company to work in Poland.
• Business visa (Schengen Visa C or D)
• Self-employed/entrepreneur visa

Each work permit category has specific criteria. It’s essential to note that workers must have both a valid visa or residence authorization and a work permit.

Employer of Record Solutions By Infotree Global

Let Infotree Global streamline your growth journey. From recruitment to payroll to expense management, we’ve got you covered. Collaborate with us and launch your international business stress-free.

Utilizing our Employer of Record Poland is a strategic move for swift entry into unfamiliar markets. Through our EOR services, you can employ Polish professionals seamlessly. You can get immediate access to the Polish market and alleviate concerns about payroll and HR.

Navigating Poland’s regulatory landscape is crucial for businesses. You can hire locals or foreigners with our Employer of Record (EOR) services. EORs handle intricate aspects like income tax, social security, expense handling, withholding fees, and business taxes, ensuring full adherence to local rules.

So, are you ready to elevate your global business strategy?

Take the next step in your international business journey. Book a Demo with us or Contact Us today to learn how Infotree Global can be your strategic partner in global expansion.

Frequently Asked Questions:

How does an employer of record work in Poland?

An Employer of Record (EOR) in Poland acts as a third-party entity that hires employees on behalf of a foreign company. It allows the foreign company to employ staff in Poland without establishing a local entity. The EOR takes on the legal responsibilities of employment, including payroll, tax compliance, and adherence to local labor laws. The EOR becomes the official employer for tax and legal purposes, while the employee works for the foreign company.

How to choose an EOR in Poland?

Choosing an EOR in Poland requires careful consideration of several factors. Ensure the EOR has a strong local presence and a deep understanding of Polish employment laws. Look for an EOR with a proven track record and positive client testimonials. It’s also essential to evaluate their service offerings, such as payroll processing, tax compliance, and HR support. Also, consider the EOR’s adaptability to changing regulations and its ability to offer guidance on best employment practices in Poland.

How can an EOR help me comply with Polish employment laws?

Poland Employer of Record can be invaluable in ensuring compliance with Polish employment laws. They have expertise in local labor regulations, tax requirements, and other legal obligations. By partnering with an EOR, you can be assured that your employment practices align with local standards, from drafting employment contracts to handling terminations. The EOR will also manage payroll, ensuring all tax and social security contributions are accurately calculated and paid on time.

What are the options for hiring a worker in Poland?

There are several ways to employ people in Poland. You can employ and payroll them directly through your company’s HQ entity, hire them as independent contractors, set up as a local employer, or partner with an Employer of Record in Poland. Each method has pros and cons; the best choice depends on your needs and circumstances.

How long does it take to set up a company in Poland?

Setting up a company in Poland can be a comprehensive process. While the initial registration might take a few weeks, the overall setup, including obtaining necessary permits and licenses, can extend the timeline. Ongoing monthly activities such as payroll, tax filings, and ensuring adherence to ever-evolving regulations can add to the complexity. It’s essential to be well-prepared and possibly seek local expertise to navigate the process efficiently.

Can I employ individuals as independent contractors in Poland?

Yes, it’s possible to hire individuals as independent contractors in Poland. However, this approach comes with its challenges. If an individual works predominantly or exclusively for your company, there’s a risk they could be viewed as an employee under Polish law, even if labeled as a contractor. Misclassifying an employee as a contractor can lead to legal repercussions, including fines. It’s crucial to clearly define the nature of the relationship and ensure that it aligns with Polish regulations.

What does HR compliance mean in Poland, and why is it important?

HR compliance in Poland ensures that your company’s HR practices and policies align with local employment laws and regulations. It encompasses many areas, from hiring practices and employment contracts to working hours and termination procedures. Ensuring HR compliance is vital to protect the rights of employees and provide them with a safe and fair working environment. Non-compliance can lead to legal disputes, fines, and damage to a company’s reputation.

Can an employer of record run payroll in Poland?

Yes, an Employer of Record Poland can manage payroll in Poland on behalf of a foreign company. They ensure that employees are paid accurately and on time, handle tax withholdings, and manage contributions to social security. By handling these responsibilities, an EOR ensures compliance with Polish payroll regulations and reduces the administrative burden on the foreign company.