Poland

The peculiarities of the Polish labour market

Each labor market has some peculiarities. Foreigners may find it difficult to fully comprehend payment methods, taxes, and other benefits. TalentUp is starting a series of different blog articles, one for each country. This article analyzes the Polish labor market.

Even if the national currency is the Polish Złoty (PLN), the whole article is in EUR to compare easily across countries and exchange rates.

General data about the Polish labour market

Social Security contributions in Poland

Once contributions are paid, employees need to pay an income tax that varies depending on their gross salaries.

DG contracts

Without being employees of them, DG contract workers collaborated with businesses.  DG contracts have some differences with contracts of employment:

1. They are not entitled to leave pay in cases of illness.
2. They are less retired.
3. They are not subject to the Labor Code; they are just covered by the contract.

DG contracts earn higher salaries each month but have fewer other benefits.

In other countries, the DG countries are the ones related to self-employees, but in this country, it is a more extended practice. The tax rate for all self-employed people in Poland is flat, at 19%.

These contracts pay different contingencies:

Example of net salary in Poland

As a reference, we use the average salary of a software engineer. In Poland, on average, software engineers earn annually 40,000€. We will see the process from gross to net salaries, whether the software engineer has an employment contract or a DG contract.

In employment contracts, the employer contributes 7,791.96 to 8,856€ to social security and the employee 9,084€. In DG contracts, the employee contributes 1,581.84€ to social security.

After paying the income tax, the employee has a net salary of 27,391.53€ in employment contracts and of 31,118.71€ in DG contracts, coming from a gross salary of 40,000€.

Unemployment regulation in Poland

There is a probationary period, but it lasts no longer than 3 months.

There are several ways to end employment:

• Mutual agreement
• A ‘statement of will’ of one of the parties with a period of notice 
• Expiry of the contract term.

Severance payments are given by employers who have at least 20 employees, and the dismissal of the employee is the fault of the employer.

Different kinds of leaves in Poland

In Poland, there are 13 public holidays.

Employees are entitled to 20 days of paid leave a year if they have been employed for

less than 10 years and 26 days if they have been employed for 10 years or more.

Sick leave is paid at 80% of the allowance. If the illness strikes while pregnant or if it resulted from an accident on the way to or from work, it is, however, paid at 100% of the allowance.

• For employees 50 years of age or less: up to 33 days in a calendar year are paid by the employer. The Social Security Office (ZUS) begins to pay sick leave after the 34th day.
• For employees 50 years of age or older: up to 14 days in a calendar year paid by the employer. The ZUS begins to pay sick leave after the 15th day.

ZUS pays for sick days taken as a result of an accident at work, a sick child, or another sick relative.

Other leaves include:

• Child-leave from 16 hours to 2 days to take care of a child that is 14 years old or younger.
• 2-days leave for weddings, the employee’s child’s birth, and the death of a spouse, child, or parent.
• 1-day leave for the employee’s child’s wedding or the death of a sister, brother, or in-law.

Paid parental leave

Mothers are entitled to 20 weeks of maternity leave, which can take up to 6 weeks prior to giving birth. This leave does not depend on the length of service with the current employer.

Fathers are granted 2 weeks’ leave, which can be used in its entirety or divided into two parts (7 days each). Paternity leave can be used until the child reaches the age of two. The ZUS is responsible for paying 100%.

In addition, parents are entitled to 32 weeks of parental leave that can be granted to any of the parents. The leaves are paid at a rate of 100% for the first 26 weeks and a 60% rate for the remaining weeks by the Social Security Institution (ZUS). 

Employees that use both maternity leave and parental leave will receive an 80% allowance for the entire leave.

Parents are entitled to 36 months of unpaid leave until the child reaches the age of 6.

Expected benefits offered by Polish companies

How to employ a Polish worker

There are two different types of contracts for when there is no company or branch of the employer established in Poland. In either case, retirement and health insurance are withheld.

• Commission Contract → Under this contract, your social security and health insurance are not paid on your behalf.
• Contract of Mandate → This contract stipulates one obligation and the rules associated with the obligation. 

You are required to pay taxes if you are a Polish tax resident (you live in Poland or stay in Poland for more than 183 days).