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Employer of Record (EOR) in Poland

Employer Of Record In Poland

Skuad's Poland EOR (Employer of Record) solution helps you to expand your business in Poland without requiring you to establish a local entity. Poland is currently Europe's leading outsourcing hub because of low personnel costs. It is the only country in Europe that successfully avoided recession during the 2008-2009 global financial crisis.
The workforce in Poland has all the essential ingredients to make good employees. The people are ambitious, hard-working, loyal, and are eager to learn with an entrepreneurial mindset. But before hiring in Poland, it is important to be well acquainted with the employment laws in Poland, which are stringent. Skuad's Poland EOR solution can easily manage your employment contracts, payroll, recruitment, advisory, taxation, and compliances at considerable pricing, in accordance with Poland labor laws. Connect with Skuad to know more.

Employment In Poland

The legal framework of Poland includes the Constitution of the Republic of Poland (a part of which deals with general principles of freedom to work and social rights), international agreements on labor laws issues, Poland Labour Code, acts and legislations defining employees and employers rights and obligations and more. 

Polish labor law is categorized into common law and autonomous labor law. The common law deals with the acts of Parliament and decrees. It includes the Polish labor code that deals with relations between employers and employees. Autonomous labor law consists of all acts formed by social partners that are recognized by the State as legal acts. For example, collective labor agreements and external collective labor agreements.

In January 2021, the Polish Government made certain changes in the wage structure, such as increasing the minimum wages from 2600 Polish Zloty to 2800 Polish Zloty per month. In terms of overtime, every employer has to pay compensation which has to be more than the employee’s gross earnings and salary for working beyond the working hours.

Foreigners from other European member states and from states within the European Economic Area (EEA) and their family members also have access to employment in Poland. Foreigners from other countries need to obtain a work permit and entry visa if they want to take a job in Poland.

Skuad's EOR solution lets you build, pay, and manage a globally distributed HR team by staying compliant with the laws without setting up another entity. Skuad’s unified employment platform enables organizations to hire the best talent in Poland while adhering to the Poland Labour Code in detail.

Tax Explanation

Statutory Working Hours

  • 40 hours across 5 days in a week.
  • Overtime allowed in emergencies and when employers have special work requirements, 150 hours per year.

Overtime Eligibility

  • Employees are entitled to 50% extra of the standard wages for every hour worked overtime and 100% extra on Sundays and holidays.
  • If employees work between 21:00 and 6:00, then they are eligible for an additional 20% payment.

Weekly Rest Period

Between 7 workdays, a rest period on Sunday is given.

Paid Public Holidays

  • New Year’s Day (January 01)
  • Epiphany (January 06)
  • Easter Sunday (April 04)
  • Easter Monday (April 05)
  • Labour Day/May Day (May 01)
  • Constitution Day (May 03)
  • Whit Sunday (May 23)
  • Corpus Christi (June 03)
  • Assumption of Mary (August 15)
  • All Saint’s Day ( November 01)
  • Independence Day (November 11)
  • Christmas Day (December 25)
  • Second day of Christmas (December 26)

Maternity & Paternity Leave

  • 20 weeks of maternity leave for female employees upon the delivery of one child, with social security benefits.
  • 31 weeks if she has delivered twins and up to 37 weeks for five or more children.
  • Paternity leave can be availed up to 2 weeks before the child’s birth.
  • When maternity leave ends, both parents are entitled to 32 weeks of parental leave or 34 weeks for multiple births. It can be availed at the end of the year when the child turns six years old and up to four segments, each lasting for a minimum of eight weeks and will receive 60% of their basic allowance.
  • Employees who adopt a child are also entitled to the same number of leaves.

Annual Leave Accrual Entitlement

All employees in Poland are entitled to annual paid vacation depending upon the number of days worked:

  • 20 days of paid leave if the employee has worked for less than 10 years.
  • 26 days paid leave if the employee has been working for 10 years or more, (provided that the person who has been employed for the first time gathers 1/12th of their annual leave time for each month that they have worked).

Medical Leave

  • Employees are entitled to 33 days of paid sick leave with a payment of 80% of their standard pay.
  • If an employee requires more than 33 days’ leave, the employee is entitled to payment from social security for up to 180 days.
  • Employees who are aged 50 or above are entitled to the first 14 days of illness from their employer. After that, the employee’s payments are received from social security.

Other Leaves

  • 2 days for an employee's wedding or his/her child’s birth, death, or funeral.
  • 1 day for an employee's child’s wedding or death, and 1 day for the funeral of the employee's relative.

Employment Security & Anti Discrimination Rights

Employment contracts must be in writing and signed when an employee begins work and must be translated into a language the employee understands. Employers are obliged to act against discrimination in employment, and employees can claim damages in Polish court proceedings.

Confidentiality of Personal Information

Data protection is governed by the General Data Protection Regulation (GDPR), which is implemented under the Act of 10 May 2018 on the Protection of Personal Data, and:

  • It applies to the protection of the processing of personal data.
  • It applies to national regulations on various types of secrecy.


Contractors Vs. Full-time Employees

In Poland, qualified employees are easy to find through a state-paid university system, which produces highly specialized and innovative workers, especially in the IT and engineering fields.

While hiring employees in Poland, every employer needs to know how employment relationships are governed and performed, along with detailed knowledge of Poland's labor code. There are three types of contracts: trial period, fixed-term, and unlimited term. These contracts should mention the parties, such as employer and employee, the date, conditions of work, remuneration, venue of work, and other necessary details as per the type of work.

Trial Period

The trial period may not exceed three months, and employees can be employed with the same employer under such a contract only once.

Fixed Term

An employer can conclude consecutive fixed-term employment contracts with the same employee. There can be a total of 3 contracts within the period of thirty-three months.

The exceptions to this rule are as follows:

  1. Employee replacement if the employee is not regular in their work.
  2. Occasional or seasonal work performance.
  3. Work performance for a specific term.
  4. Indication of objective reasons by the employer.

The above-mentioned exceptions must be sent to the district labor inspector in writing.

Unlimited Term

If the employment contract does not satisfy the conditions of fixed-term employment, then the employee is hired under a contract of employment for an indefinite term.

Therefore, while choosing the type of employment, it is important to consider the above three categories to hire a good team according to your work. With Skuad’s global HR platform, you can easily handle compliances and payroll management of employees.

Hiring In Poland

Hiring in Poland can be done through popular Polish jobs portals which have many users, and through some professional portals like LinkedIn. You can also post job ads in Polish newspapers. Many international employers conduct interviews virtually in case of remote hiring through online communication channels; for this purpose, one should keep in mind the timing difference.

Also, stick to the background check laws, as conducting background checks during the hiring process is strictly prohibited in Poland. Working with Skuad's EOR team will help you to know the detailed data protection laws along with employees’ rights, working conditions, remuneration, timings, and more. Our team will manage everything from the hiring to the retirement cycle of your employees in Poland. Connect with Skuad to learn more about the details of the hiring procedure.

Probation & Termination

There is no specific term for a probation period in Poland, but it is defined under a trial period that lasts for 3 months, and a special employment contract is concluded for this. After that, a new employment contract is executed in the form of the fixed-term and unlimited term according to the Poland labor code.

Termination of service

Topics Explanation

Notice for Termination of Employment

The notice period is determined according to the employment contract and the duration of their employment as explained below:

Type of Employment Duration of Employment Notice Period
Trial period
  • Less than 2 week
  • 2 week to < 3 months
  • 3 months
  • 3 days
  • 7 days
  • 14 days
Fixed-term and Unlimited term
  • Less than 6 months
  • 6 months to < 3 years
  • At least 3 years
  • 14 days
  • 1 month
  • 3 months

EOR Solution

Poland Employer of Record (Poland EoR) solution makes it easier and faster to expand your business in Poland, minus the complexities and expenses that may occur while establishing an entity in Poland without a feasibility study. 

Connect with Skuad to expand your business internationally with our technology-driven automated and unified platform.

General Employer of Record service terms

Taxes that apply to the invoice

The standard VAT rate in Poland is 23%.

Minimum duration of service

3 months

Currency Accepted

Polish Zloty (PLN)

Required Details and Documents

For Polish Citizens: ID proof, place of residence, CV, bank details, education details.

For Expatriates: Job details, educational qualifications, technical qualifications, CV, copy of passport, copy of ID, bank details, photographs, work permit.

Types of Visas In Poland

There are three categories of visas required in the Republic of Poland.

Visa Category Explanation

A-Type Visa

An A-type airport transit visa is issued only to the citizens of the countries listed below for transiting through the international areas of transport:

Afghanistan, Bangladesh, the Democratic Republic of the Congo, Eritrea, Ethiopia, Ghana, Iran, Iraq, Nigeria, Pakistan, Sudan, and Sri Lanka.

C-Type Visa

C-type visa, also known as the Uniform Schengen Visa, permits its holder to remain in the territory of all the Schengen area member countries for a maximum of 90 days during 180 days.

D-Type Visa

D-type national visa permits an individual to enter the territory of the Republic of Poland and to stay continuously or for several successive times for a total duration of more than 90 days during the validity of the visa but not longer than one year.

Work Permits

Skuad's EOR solution can help you to seamlessly acquire work permits in Poland, thanks to its robust network in the country. Foreign nationals require a work permit, but the following categories of foreign nationals are exempted from obtaining a work permit:

  • Citizens of the EU, European Economic Area (EEA), and Switzerland, and members of their families.
  • Foreign nationals with a settlement permit.
  • Foreign nationals who have long-term EU resident status in Poland.
  • Individuals who were granted temporary protection. refugees, and people granted ‘tolerated stay’ status.
  • Other foreign nationals are not obligated to obtain a work permit under specific regulations.
Work Permits Explanation

Can Skuad Sponsor a work permit in Poland

Yes

Processing Time

2 weeks

Work Permit Process

It is issued by the province governor relevant to the employer’s registered office.

Work Permit Validity

Fixed-term of not more than 3 years, and 5 years in case of management board members.

Work Permit Restrictions

  • The foreign national’s remuneration cannot be lower than the remuneration paid to a Polish employee in a similar position.
  • The district governor confirms that the vacancy cannot be filled by a person registered as unemployed or seeking employment

Time frame

1-2 months to obtain a work permit.

Exceptions to the restrictions

  • A work permit is issued on the employer’s request and is the basis on which a work visa is obtained by a foreign national by the embassy in their place.
  • Foreign nationals must legalize their residence in Poland by obtaining a temporary residence permit if their stay in Poland exceeds three months.

Payroll & Taxes In Poland

In Poland, every employer should be well aware of basic employee information such as name, date of birth, address, contact number, qualification, and bank account details to which the salary will be transferred. Skuad’s Employer of Record solution has complete knowledge about the valid tax registrations compliances like KRS (National Court Register), Central Register, and Information on Economic Activity (CEIDG) that keeps the records in a business register with information on entrepreneurs running their own business as sole traders in Poland. 

Skuad ensures proper employment while complying with all the rules and regulations of the host country. Poland is among those nations that have adopted technology with innovative digital payment structures. Every company is required to comply with the Polish laws on income tax, direct or withholding tax, sales tax, etc. The payroll in Poland is classified into simple payroll, local payroll, external or outsourced payroll, and internal payroll. Skuad provides world-class facilities to employ and manage the payroll of competent staff in Poland.

Tax Explanation

Income Tax Rates

Taxable Income Rate

Up to PLN 85,528

17%

Over PLN 85,528

14,539.76 plus 32 % of excess over 85,528

Taxable Income (PLN) Tax Credit (PLN)

0-8000 PLN

1360

8,000-13,000 PLN

1360 - [834.88 X (taxable base - 8000)/5000]

13,000- 85,528 PLN

525,12

85,528 - 1,27,000 PLN

525.12 - [525.2 X (taxable base - 85,28)/ 41,472]

1,27,000 - no limit

0

Tax Year end

31st December

Filing & Payment

30th April, and in case of payment from a Polish bank account, the tax payment due is transferred to the Treasury Office bank account on the same day.

In case the payment is made from foreign bank accounts, payments made within the EU are usually booked within 2 days and payments from other countries within 3 or more days.

Withholding Tax (For non-residents)

Dividends: 19%

Interest & Royalties: 20%

For consulting services: 20%

Sales Tax

23%

Payroll Tax

No specific payroll taxes.

Social Security Contributions

Employer (%) Employee (%)
Pension 9.76 9.76
Disability 4.5 1.5
Accident 0.67 to 3.3 -
Sickness - 2.45

Employers must pay a contribution of 2.45% to the Labor Fund and 0.1% to the employee’s guaranteed benefits fund.

Health Insurance

An obligatory contribution of 9% to health insurance, although health insurance contributions are deductible from the employee's tax up to 7.75%

Public Pension

The pension age is 65 years for men and 60 years for women.


Incorporation

To incorporate a Limited Liability Company (LLC) in Poland, you should be aware of the taxation and compliance structure of subsidiaries. Several steps are required for the incorporation to engage in any commercial activities; therefore, it is necessary to prepare all the documents for the smooth functioning of the process. The list of documents are as follows:

  1. Articles of Association.
  2. Contract or statute with a certified translation in Polish.
  3. Power of attorney for company registration.
  4. Founders: The company has a single shareholder, and there are no restrictions on the total number or the nationality of the founders.
  5. Capital Contribution: 5000 PLN must be paid up in cash or kind before the business is registered.
  6. Management: At least one person on the management board, and when the company has more than 25 shareholders, or when the capital exceeds the amount of 500,000 PLN, then the company must have a supervisory board with at least three individuals.
  7. A REGON number and tax identification number are assigned for the LLC.
  8. Registration for VAT purposes is also required.

With Skuad’s presence in Poland, you can easily register an LLC in Poland to commence your business activities and directly start hiring employees. Also, it is important to stay compliant with the taxation structure in Poland. The LLC is taxed on its income produced in the country at a fixed rate of 19%. In addition, companies must comply with the annual reporting and audit requirements. Connect with Skuad’s team of experts to handle your business compliances on your behalf. Book a demo here.

Professional Employer Organization (PEO)

The most critical difference between a PEO and an EOR is that while the former acts as your co-employer, the latter acts as the legal employer of your employees. If you opt for PEO services, you will still have to take key decisions on the outsourced activities, whereas an EOR requires no such hand-holding. Once you partner with Skuad’s EOR, Skuad can manage complete HR responsibilities while you focus on other core areas of your business.

Skuad’s EOR solution helps your business expand in Poland with ease according to your business’s requirements. Moreover, Skuad’s experts will also guide you at every stage during the business expansion. Book a demo to learn more.

Conclusion

The most crucial aspect of business expansion and setting up a remote team in Poland is to have a thorough understanding of the local laws and the employment process. However, several factors ranging from the employment types and specific state laws to understanding the prevailing taxation laws can hold back and prolong the business expansion process.

Instead of setting up a new commercial entity and getting immersed in understanding the nuances of the prevailing laws, it is wise to partner with an EOR that will take care of your HR needs. The EOR can ensure the HR practices align with the local legal system and leaves no room for lapses or deviations.

Skuad’s globally distributed teams can make hiring exceptional talent in Poland an easy and straightforward process. Skuad can also help manage your payroll and help your company remain compliant with the prevailing laws and taxation on a single unified employment platform. Contact us today to give shape to your ideas for business expansion in Poland.

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