An Employer of Record (EOR) in Poland acts as the legal employer for workers, handling payroll, benefits, and other employment tasks on behalf of the actual employer. Also known as a Global PEO, it simplifies hiring without the need for entity setup.
Discover the key considerations and essential details you should be aware of before you hire your remote team in Poland.
On this page: Employment Contracts | Working Conditions / Employment Laws | Employees vs Independent Contractors | Social Security | Personal Income Tax
Employment Contracts in Poland
In Poland, employment matters fall under the jurisdiction of the Ministry of Family, Labour, and Social Policy, with regulations outlined in the Polish Labor Code of 1974. The primary employment structure is the formal employment relationship, offering employees specific rights and protections while placing certain limitations on employers.
For clarity and protection, it's crucial to have employment contracts in writing. If a contract isn't written, the employer must give the employee written confirmation detailing the contract type and its terms before work begins. Although oral agreements are valid, putting them in writing is advisable.
Key features of employment contracts include employees being answerable to employers, adherence to set work schedules and locations, monthly pay requirements, direct personal work performance under employer supervision, potential changes to job duties, and coverage by mandatory social insurance. These elements ensure clarity and safeguard the interests of both employees and employers in the Polish employment landscape.
Types of Employment Contracts in Poland
Apprenticeship Contract
An apprenticeship contract serves a dual purpose: it allows the employer to assess the employee's contribution to the company and provides the employee an opportunity to evaluate the working conditions. This contract has a maximum duration of 3 months. However, there are restrictions on immediately entering a second apprenticeship contract for the same position with the same employee. Another apprenticeship contract is permissible if the employee takes on a different role or if there's a break in continuous employment with the same employer.
Ending an apprenticeship contract requires different notice periods:
- Three days (three working days) for a trial period under two weeks.
- One week if the trial period surpasses two weeks.
- Two weeks for a trial period of three months.
Employment Contract for a Specified Task
An employment contract for a specified task is commonly used for seasonal work. Its defining feature is the predetermined termination date, linked to the completion of specific tasks. Once the assigned work concludes, the contract ends. Subsequent contracts of a similar nature can be initiated without legal hindrance. The employment relationship arising from this contract ceases when the employee completes all activities intended to yield a specific result, even if the result isn't achieved. In such cases, the employee retains the right to remuneration based on the quantity and quality of the work performed, regardless of the outcome.
Fixed-Term Employment Contract
A fixed-term employment contract, a prevalent form of limited-duration agreement, specifies the contract duration, conditions for termination, or an event triggering the relationship's end. Parties have flexibility in choosing the contract period, but it's crucial to avoid exploiting this for indefinite employment. Per Article 25 of the Labour Code, a third consecutive fixed-term contract with the same employee becomes indefinite if the breaks between contracts are less than a month. This rule doesn't apply to other limited contracts like replacement employment or a specified task. Notice termination is possible for fixed-term contracts over six months with a relevant provision. Contracts under six months or lacking such a provision end only with the contract's expiration.
Replacement Employment Contract
A replacement employment contract is a specific limited-duration agreement crafted for situations where an employee needs temporary replacement during an excused absence. The contract's duration can be specified by providing a precise date or indicating a future event, like the end of maternity leave. The replaced employee's absence must be justified according to the Labour Code. Notably, the replacement contract pertains to the same type of work as defined in the original employee's contract. However, the law doesn't mandate identical remuneration or working hours, allowing flexibility for part-time work or different pay, irrespective of the replaced employee's terms.
Employment Contract for an Indefinite Period
An employment contract for an indefinite period is the most favorable form of employment for employees, offering stability and protection from abrupt termination. It's equally advantageous for employers, fostering enduring relationships with valuable staff. This type of contract allows termination with notice, with the notice period varying based on the employee's tenure:
- Two weeks for employment duration less than six months.
- One month for employment lasting six months or more.
- Three months for employees with three years or more of service with the employer.
Working Conditions / Employment Laws in Poland
As businesses explore opportunities to extend their operations to Poland, a comprehensive understanding of the country's working conditions becomes crucial. In the pursuit of hiring remote talent or establishing a physical presence, factors such as standard working hours, minimum wages, overtime compensation, probationary periods, holiday observances, and leave entitlements play pivotal roles. This nuanced understanding ensures a smooth integration into the Polish work culture, fostering a positive and compliant environment for both employers and employees.
Working Hours in Poland
In Poland, standard working hours are eight per day, totaling forty per week, with flexibility for makeup time in case of absences, while ensuring adherence to rest period regulations.
Payroll Cycle in Poland
Remuneration is paid monthly at a predetermined time, primarily in monetary form, with the minimum wage currently set at PLN 4,242.00 per month in 2023, ensuring consistency and fair compensation for employees.
Overtime in Poland
In Poland, the law strictly regulates working hours, disallowing employers from obligating employees to work beyond stipulated limits. Overtime, exceeding daily and weekly rest periods, is permissible only with the employer's explicit order or with the employee's knowledge and consent.
While employees can decline overtime, refusal may impact their relationship with the employer. In addition to standard remuneration, overtime merits extra pay, including 100% for night shifts, Sundays, and holidays, and 50% for other overtime worked on non-specified days. This practice ensures fair compensation and aligns with work schedule norms.
Trial Period in Poland
In Poland, an employment contract for a trial period allows both parties to assess working conditions before committing to a long-term relationship. Its duration varies based on the intended length of future employment: 1 month for contracts under 6 months, 2 months for contracts of 6-12 months, and 3 months for contracts exceeding 12 months or indefinite terms.
Extensions, limited to one month, can occur once and must align with the job's nature. While the trial period can't exceed 3 months, an agreement may extend it by holiday leave or other excused absences.
Post-trial, parties can't enter another trial contract unless for a different job role. Typically, an employee can undergo a trial period with the same employer only once.
Notice Periods in Poland:
In Poland, including a notice period in an employment contract is permissible as per labor laws. The notice period varies based on the type of employment contract:
Trial Period Contracts in Poland:
During the trial period in Poland, notice periods vary based on the duration of the contract:
- Less than 2 Weeks: 3 working days.
- 2 Weeks to 3 Months: 1 week.
- More than 3 Months: 2 weeks.
Post Trial Period - Notice Periods Based on Length of Service:
After the trial period, the notice period for fixed or unlimited-term contracts depends on the employee's length of service:
- Less than 6 Months: Notice period of 2 weeks.
- 6 Months to Less Than 3 Years: Notice period of 1 month.
- 3 Years or More: Notice period of 3 months.
These notice periods facilitate a structured and equitable process for ending employment contracts in Poland.
Normative agreements can extend notice periods beyond legal requirements. However, these agreements must not provide less favorable conditions than those mandated by labor laws. In certain situations, longer notice periods might be considered disadvantageous and might not be enforced.
Severance Pay
For employers in Poland, understanding severance pay is crucial when dealing with employee terminations. While severance pay becomes mandatory in specific situations like company closure, redundancy, or an employee reaching retirement age, it may not apply if termination is due to reasons like misconduct or the end of a probation period.
Two key factors influence the amount of severance pay an employer might need to provide: the employee's length of service and their salary. The longer the employment and the higher the salary, the higher the potential severance pay.
Here's a simplified breakdown:
- Identify the employee's total years of service.
- Determine the minimum severance pay based on their service:
- Less than 2 years: 1 month's salary
- 2 to 8 years: 2 months' salary
- Over 8 years: 3 months' salary
This straightforward guide helps employers anticipate and navigate severance pay obligations in Poland based on different employment scenarios.
13th Month Salary
There is no legal requirement for employers in Poland to pay a 13th month salary
Hiring Options in Poland
Employees
When it comes to employment options in Poland, employees have several choices available to them:
- Open-Ended Employment Contract: Employees can enter into an open-ended employment contract, which provides long-term job security and stability. This type of contract does not have a specified end date and continues until either party decides to terminate the employment relationship.
- Fixed-Term Employment Contract: Employees can also opt for a fixed-term employment contract, which has a predetermined duration. This type of contract is suitable for temporary or project-based work and comes to an end upon the completion of the specified term. It's important to note that after two consecutive fixed-term contracts, the employee may be entitled to an indefinite-term contract.
- Employment Contract for a Probationary Period: Employers may offer employees an employment contract with a probationary period. This allows both parties to assess the suitability of the employment relationship before making a long-term commitment. During the probationary period, either party can terminate the contract with shorter notice.
Both part-time and full-time employment options are available in Poland. It is important to note that discrimination against employees based on their employment status, whether part-time or fixed-term, is unlawful and prohibited.
Independent Contractor
In Poland, individuals engaged under a civil law agreement, such as contracts for specific work (umowa o dzieło), are not considered employees under labor law. However, it is important to understand that a contractor may be deemed an employee, regardless of the contract's formal name, if the individual works under the supervision and control of the other party regarding the place of work, working hours, and the manner of performance.
Contracts for specific work (umowa o dzieło) must be registered with the Social Insurance Institution (ZUS) within seven days of their conclusion. This registration requirement applies to contracts entered into by entities that are not in an employer-employee relationship. The newly established register maintained by ZUS serves as a repository for these registered contracts.
Agency Worker
Temporary work is commonly used in Poland to cover short periods of employment, such as filling in for absent permanent employees or performing seasonal work. Within a period of 36 consecutive months, a single employer can engage an individual through a work agency for a maximum total period of 18 months.
It's important for both employers and employees to be aware of these employment options and their specific rights and obligations under the applicable laws and regulations in Poland. Seeking legal advice and understanding the contractual terms and conditions are crucial steps to ensure a smooth employment relationship.
Personal Income Tax in Poland
In Poland, the personal income tax system operates on a progressive scale, where the tax rate increases as individuals earn more. As of 2024, there are two key brackets. Income up to PLN 120,000 is taxed at a 12% rate, with a deduction of PLN 3,600, effectively creating a tax-free threshold of PLN 30,000. Beyond this threshold, any income exceeding PLN 120,000 faces a higher tax rate of 32%. This structure is essential for both individuals and employers to comprehend, as it influences financial planning and adherence to tax regulations.
| Income Range (PLN) | Tax Rate | Notes |
|---|---|---|
| Up to 30,000 | 0% | Effectively tax-free due to deductions. |
| 30,001 - 120,000 | 12% - 3,600 | Taxed at 12% with a decreasing tax amount (max reduction of PLN 3,600). |
| Above 120,000 | 32% | Taxed at a flat rate of 32%. |
| Overview | |
| Continent | Europe |
| Country | Poland |
| Capital | Warsaw |
| Language | Polish |
| Time zone | UTC+01:00 (CET) |
| Total Time zones | 1 |
| Working hours per week | 40 |
| Working week | Monday–Friday |
| Typical hours worked | 8 |
| Personal Tax filing deadline | 30th Apr |
| Financial Year | 1st January to 31st December |
| Date format | yyyy-mm-dd |
| Currency | Polish złoty (PLN) |
| VAT | the standard rate is 23% |
In Poland, engaging the services of an Employer of Record (EOR) holds significant importance for companies navigating the local employment landscape. The EOR assumes responsibility for navigating complex compliance issues, managing intricate payroll processes, and handling administrative intricacies. This strategic collaboration allows businesses to concentrate on their core objectives without being entangled in regulatory complexities. By aligning employment contracts with Poland's labor laws and practices, an EOR facilitates a seamless onboarding process for employees. In a dynamic business environment like Poland, the role of an EOR becomes increasingly crucial, providing companies with an efficient entry and growth strategy while ensuring compliance and fostering a favorable work environment.
Eastern Europe: EOR Czech Republic | EOR Hungary | EOR Poland | EOR Slovakia
Social Security in Poland
Employer Payroll Contributions in Poland
In Poland, employers have various payroll contribution obligations to support different aspects of employee benefits and social security. These contributions play a crucial role in ensuring the financial well-being and protection of employees. Here are some key employer payroll contributions in Poland:
These employer payroll contributions demonstrate the commitment to employee welfare and social security in Poland. By fulfilling these obligations, employers contribute to the overall well-being and protection of their workforce.
Employee Payroll Contributions in Poland
In Poland, employees also have certain payroll contribution obligations, which are deducted from their gross salary. These contributions are intended to support various benefits and social security programs. Here are the key employee payroll contributions in Poland:
In total, the employee's payroll contributions amount to 22.71% of their gross salary. It is important to note that these contributions are deducted from the employee's salary before it is received, representing the portion of their income allocated to support these benefits and social security programs.
By making these employee payroll contributions, individuals contribute to their own future financial security, as well as to the overall welfare of the Polish society by ensuring the availability of pension benefits, disability support, sickness coverage, and healthcare services.