Hiring and paying employees in Poland involves navigating a well-regulated framework of employment laws, payroll procedures, and statutory benefits. For international businesses, understanding these regulations is crucial for compliance and successful operations. This guide provides a comprehensive overview of the key aspects you need to consider when hiring and paying employees in Poland.
Understanding Polish employment law
Types of employment contracts
Polish labour law recognises several types of employment contracts:
- Permanent employment contracts (Umowa o pracę na czas nieokreślony):
- Most secure and common form of employment.
- Offers full statutory protections, including notice periods and severance pay.
- Fixed-term contracts (Umowa o pracę na czas określony):
- Limited to a maximum duration of 33 months.
- Can be renewed up to three times before becoming permanent.
- Casual or task-based contracts (Umowa o dzieło):
- Used for specific projects or tasks.
- Not subject to social security contributions.
- Civil law contracts (Umowa zlecenia):
- Flexible agreements for freelance or part-time work.
- May have limited statutory protections.
Working hours and overtime
- Standard workweek: 40 hours per week, with a maximum of 8 hours per day.
- Overtime pay:
- 150% of the regular hourly rate on weekdays.
- 200% on Sundays, public holidays, and at night.
Termination of employment
- Notice periods depend on the length of employment:
- Less than 6 months: 2 weeks.
- 6 months to 3 years: 1 month.
- Over 3 years: 3 months.
- Severance pay is mandatory if the termination is due to organisational changes or redundancy.
Payroll regulations in Poland
Key components of payroll
- Gross salary: The agreed-upon salary before taxes and contributions.
- Social security contributions:
- Employer contributions: Approximately 19.48% to 22.14% of gross salary.
- Employee contributions: 13.71% of gross salary.
- Personal income tax:
- Progressive rates: 12% up to PLN 120,000, then 32% on earnings above this threshold.
- Mandatory benefits:
- Health insurance.
- Pension contributions.
- Accident insurance.
Payroll process
- Calculate gross-to-net pay: Deduct employee social security contributions and income tax.
- Submit contributions: Employer must remit social security and health insurance contributions to the Polish Social Insurance Institution (ZUS).
- Tax declarations: File monthly tax returns (PIT-4R) and provide annual tax statements to employees (PIT-11).
Minimum wage
As of 2025, Poland’s minimum wage is PLN 4,242 per month (approx. €920) for full-time employees. Hourly minimum wage is PLN 27.70.
Payroll process in Poland
Managing payroll in Poland involves adhering to a structured process that ensures compliance with local laws and regulations. Below are the key steps to process payroll for employees in Poland:
1. Collect employee information
Gather essential details from employees, including:
- Full name, address, and tax identification number (PESEL or NIP).
- Employment contract terms (type, salary, and benefits).
- Bank account details for salary payments.
2. Register employees with social security (ZUS)
Employers must register new employees with the Polish Social Insurance Institution (ZUS) within 7 days of the start date. This includes:
- Completing the ZUS ZUA form for full social security coverage.
- Providing employee and employer details for contribution purposes.
3. Calculate gross-to-net salary
To determine an employee’s take-home pay, calculate:
- Gross salary (agreed salary in the employment contract).
- Deductions:
- Employee social security contributions (~13.71% of gross salary).
- Personal income tax based on progressive rates.
- Net salary: Gross salary minus deductions.
4. Remit contributions to ZUS
Employers are responsible for remitting both employer and employee social security contributions to ZUS by the 15th of the following month. These include:
- Pension and disability contributions.
- Accident insurance.
- Health insurance.
- Labour Fund (Fundusz Pracy) contributions.
5. Withhold and remit personal income tax (PIT)
Employers must deduct income tax from employees’ salaries and transfer it to the Polish tax office (Urząd Skarbowy) monthly. The filing deadline is typically the 20th of the following month.
6. Generate payslips
Provide employees with detailed payslips each pay period. Payslips should include:
- Gross salary.
- Tax deductions.
- Social security contributions.
- Net salary paid.
7. Submit monthly declarations
Employers must submit the following declarations:
- ZUS DRA: Report detailing social security contributions for all employees.
- PIT-4R: Monthly income tax declaration for the Polish tax office.
8. Distribute net salaries
Transfer net salaries to employees’ bank accounts by the agreed payday, ensuring compliance with the payment schedule in the employment contract.
9. Provide annual tax forms
At the end of each tax year, issue the following forms:
- PIT-11: Summary of income and tax paid for employees (used for personal tax returns).
- PIT-4R: Employer’s annual tax settlement report for the tax office.
10. Maintain payroll records
Polish law requires employers to keep payroll and employee records for at least 10 years. Ensure secure storage of:
- Employment contracts.
- Payslips.
- Tax and social security declarations.
Benefits and statutory entitlements in Poland
Mandatory benefits
- Annual leave:
- Employees with less than 10 years of service: 20 days.
- Employees with 10+ years of service: 26 days.
- Sick leave:
- Paid at 80% of the salary, funded by the employer for the first 33 days (or 14 days for employees over 50 years old).
- ZUS covers payments thereafter.
- Parental leave:
- Maternity leave: 20 weeks (fully paid).
- Paternity leave: 2 weeks (fully paid).
- Parental leave: Up to 32 weeks shared between parents, paid at 60% of salary.
- Public holidays: Poland observes 13 public holidays annually, on which employees are entitled to paid leave.
Voluntary benefits
Employers often offer additional perks to attract and retain talent:
- Private health insurance.
- Meal vouchers.
- Transport allowances.
- Professional training and development opportunities.
Steps to hiring an employee in Poland
- Register your business:
- Foreign entities must establish a legal presence in Poland, such as a branch or subsidiary.
- Register with ZUS:
- Obtain an employer identification number and enrol for social security contributions.
- Draft a compliant employment contract:
- Clearly specify terms, including job title, salary, working hours, and termination clauses.
- Onboard employees:
- Provide necessary documentation (e.g., work permit for non-EU employees).
- Conduct health and safety training.
Tax considerations for foreign employers
- Corporate tax registration: Foreign companies hiring in Poland must register with the Polish tax authorities for corporate tax purposes.
- Withholding obligations: Employers must withhold and remit income tax and social security contributions on behalf of employees.
- Double taxation agreements: Poland has treaties with many countries to prevent double taxation, which is particularly relevant for expatriates.
Tips for navigating Polish payroll and employment
- Engage a local payroll provider:
- Working with a Polish payroll service ensures compliance with tax and labour laws.
- Leverage technology:
- Use cloud-based HR and payroll software to streamline processes and maintain records.
- Stay updated on legal changes:
- Polish labour laws are subject to periodic amendments. Regularly review changes to statutory benefits, tax rates, and minimum wages.
Conclusion
Poland offers a robust legal framework for employers, ensuring the protection of employee rights while promoting economic growth.
By understanding Polish employment laws, payroll regulations, and benefits, international businesses can effectively manage their workforce in the country.
Leveraging local expertise, such as payroll providers and legal advisors, can further enhance compliance and operational efficiency.
FAQ
Yes, to directly hire employees in Poland, foreign companies typically need to establish a local legal entity, such as a branch or subsidiary. Alternatively, businesses can partner with an employer of record (EOR) or use a payroll provider to handle employment without setting up a local entity.
Yes, you can engage independent contractors through civil law contracts (Umowa zlecenia or Umowa o dzieło). However, ensure the working relationship aligns with the contractor model, as misclassification can lead to penalties and reclassification as employment.
Yes, non-EU citizens need a work permit and residence permit to work in Poland. EU, EEA, and Swiss citizens can work freely but must register their residence if staying longer than three months. Employers must ensure compliance with immigration and labour laws for foreign workers.
Bonuses and incentives are treated as part of the employee’s taxable income. They are subject to the same income tax rates and social security contributions as regular salaries.
In addition to the gross salary, employers must account for employer-side social security contributions, which typically range from 19.48% to 22.14% of the gross salary. Additional costs may include benefits such as private health insurance, training, and recruitment expenses.
Yes, employers can include a probation period in the employment contract. The maximum duration is:
1 month for casual or simple roles.
2 months for mid-level roles.
3 months for managerial or highly specialised roles.
Polish labour law allows flexible working arrangements, such as part-time work, shift work, or compressed hours. However, deviations from standard working hours must be clearly defined in the employment contract and adhere to the labour code’s limits on maximum daily and weekly working hours.
Severance pay is required if an employee is terminated due to organisational changes or redundancy. The amount depends on the employee’s length of service:
Up to 2 years: 1 month’s salary.
2–8 years: 2 months’ salary.
Over 8 years: 3 months’ salary.
Employers bear the cost of sick pay for the first 33 days of an employee’s illness (14 days for employees aged 50+). After this period, the Polish Social Insurance Institution (ZUS) reimburses the sick pay.
Yes, Polish labour law provides strong protections for employees. Employers must justify dismissals with valid reasons and follow proper procedures, including notice periods. Certain groups, such as pregnant women, employees on maternity leave, and trade union members, have additional protections against termination.
If payroll errors occur, employers are required to rectify them immediately and compensate employees for any underpayment. In cases of overpayment, employers can usually recover the funds, but only with the employee’s consent or legal action.
No, salaries in Poland must be paid in Polish złoty (PLN) unless the employee is working abroad or there is an explicit agreement for payment in a different currency.
Senior-level employees often receive additional benefits such as:
Company cars.
Stock options or performance-based bonuses.
Enhanced health and life insurance plans.
Executive training and professional development allowances.