Hiring in Poland: 10 Must-Know Compliance Facts

Remote work offers countless opportunities, including the ability to hire talent from anywhere in the world. This flexibility means you can tap into a broader talent pool or expand your global presence more quickly with the help of remote hiring solutions.

Poland stands out as a top choice for hiring remote employees for companies seeking to expand to Europe, especially for roles in finance, banking, IT and software engineering, and creative industries. 

The cultural embrace of remote work is already strong there, with 2024 Indeed data revealed that Poland has the highest proportion of remote job ads. They’re also high-proficient English speakers. 

About to hire a remote team member in Poland? No matter what options to hire foreign employees you choose, knowing these compliance facts allows you to enter Poland job market with confidence.

Here’s a comprehensive guide to help you navigate the process of hiring and paying remote workers in Poland.

#1. Working Hours and Salary Expectations in Poland

Working Hours and Overtime

The Labor Code of Poland, or "Kodeks Pracy," is the main framework for employment relationships in the country. Additionally, as part of the EU, Poland's employment laws are shaped by EU directives and regulations, which harmonize labor standards across Europe.

These regulation frameworks determine the standard working hours are set at 8 hours per day and 40 hours per week, typically spread over a 5-day work week. 

Employees must receive at least 11 hours of uninterrupted rest daily and at least 35 hours of uninterrupted rest weekly. 

Overtime work is permissible but limited to 150 hours annually. Overtime pay includes:

• 150% of regular salary for daytime work on regular days and 
• 200% of regular salary for work during nights, Sundays, and public holidays.

There are 13 paid public holidays per year that every employee in Poland is entitled to:

• New Year's Day (January 1)
• Epiphany (January 6)
• Easter Sunday (date varies)
• Easter Monday (date varies)
• Labor Day / May Day (May 1)
• Constitution Day (May 3)
• Pentecost Sunday (date varies, 7 weeks after Easter)
• Corpus Christi (date varies, 60 days after Easter)
• Assumption of the Blessed Virgin Mary (August 15)
• All Saints' Day (November 1)
• National Independence Day (November 11)
• Christmas Day (December 25)
• Second Day of Christmas (December 26)

Salary Expectation

The Polish Zloty (PLN) is the primary currency for salary payments in Poland and the standard currency for all employment-related transactions, including salary payments, social security contributions, and taxes.

However, many remote employees in Poland agree to be paid in Euros or US Dollars.

The minimum wage in Poland was set to increase in 2024 to ensure wages keep pace with inflation and the cost of living. From July, it’s PLN 4,300 gross per month and PLN 28.10 gross per hour. 

Typically, employees in Poland are paid on a monthly basis, aligning with the end of each month. Employers are responsible for deducting and paying the necessary taxes and social security contributions from employees' salaries, ensuring that all legal obligations are met​.

#2. Visa Sponsorship for Remote Employees in Poland

Poland is a member of the European Union, which allows for relatively easy movement and residence for other EU citizens. Hence, there is a chance you will hire remote employees in Poland who are not Polish citizens.

In such cases, you need to verify their work permit and assist with visa sponsorship to legally recruit these skilled talents.

Foreigners legally residing in Poland with a work permit or a residence card allowing “access to the labor market” can work without needing a separate visa.

To work legally in Poland, everyone who is not an EU/EEA or Swiss citizen needs a specific visa. For long-term employment, it’s a Type D visa, also known as a National visa.

This visa is typically valid for stays between 91 days to one year and can be renewed annually.

The company typically initiates the process by applying for a work permit on behalf of the employee. This involves submitting required documents, such as the application form, proof of the company’s legal status, and the employment contract, to the local Voivodeship office in Poland.

Besides, the EU Blue Card is a special permit for highly qualified employment, valid for three months to three years. It requires a higher education diploma or at least five years of relevant work experience.

Visa sponsorship is different by case, and the process ain’t enjoyable as you need to engage with the local government agency. That’s why having a companion partner for global employment is really life-saving. They might handle it easier with their expertise and a legal Polish entity (verified for type A visas).  

Not only legal employment aspects but also the payment and benefits management for remote teams. For example, Deel is a leading EOR vendor, offering all-in-on global HR management, including an owned payroll engine, visa support services, classification guarantee, and more. 

#3. Employment Contracts

Contracts with remote employees in Poland must be written, not just verbal agreements. The contract should spell out all the details: job duties, salary, working hours, and anything else relevant.

It’s worth noting that while a three-month probation period is common practice in the US, in Poland, it is mandated by law and cannot be exceeded.

Before your new employee signs the contract, they must undergo a pre-employment medical examination. This step confirms they are fit to perform their job duties. 

As the employer, you are responsible for arranging and covering the costs of this examination. It’s a small price to pay to ensure your remote team is ready to hit the ground running.

#4. Non-Compete Agreements

Planning to include a non-compete clause? It’s helpful and, indeed, necessary to safeguard your company's confidential information, trade secrets, and overall business interests. 

To be legally enforceable in Poland, non-compete clauses must include compensation for the employee. 

If the non-compete period extends beyond their tenure, Polish law mandates that you pay at least 25% of their last salary. This is how the country ensures fair compensation for its citizens for limiting their ability to seek other employment.

#5. Employment Termination

The regulations for employment termination in Poland are defined in the Polish Labor Code. 

When terminating an employee, the reason must be clear, specific, and legitimate. Whether the termination is due to performance issues, redundancy, or organizational changes, you must provide a written justification. 

The notice periods vary based on the employee’s length of service:

• For less than six months: notice two weeks in advance
• For more than six months: notice three months in advance

You also need to provide severance pay for terminated employees:

• For less than two years of service: one month’s salary
• For two to eight years of service: two month’s salary
• For more than eight years of service: three month’s salary

Note that severance pay is capped at 15 times the national minimum monthly salary​ (PLN 64,500 as of July 2024).

#6. Layoff Rules

If you’re considering collective dismissals, which apply to companies with at least 20 employees, specific procedures must be followed. These include consulting with trade unions or employee representatives. 

Collective dismissals are defined by thresholds: 

• 10 employees for companies with fewer than 100 employees,
• 10% of the workforce for companies with 100-300 employees,
• 30 employees for those with more than 300 employees​.

And employees have the right to challenge dismissals they deem unfair!

They can appeal to labor courts, where they might be awarded compensation or even reinstatement. 

This legal recourse underscores the importance of ensuring that all terminations are well-justified and documented​.

#7. PTO and Leave Benefits in Poland

Poland has robust PTO policies for the citizens with rich benefits for illness or family leave, reflecting the broader social safety nets prevalent in many European countries.

Annual Leave

In Poland, the amount of paid annual leave is determined by the length of an employee's service:

• Less than 10 years: 20 days of paid leave
• 10 years or more: 26 days of paid leave

Time spent in education can also count towards this total. For instance, having a higher education degree can add up to eight years of service. 

Unused vacation days can be carried over to the following year but must be used by September 30 of that year​.

Sick Leave

Employees are entitled to up to 182 days of paid sick leave per year. 

For the first 33 days, the employer pays 80% of the salary. If the illness occurs during pregnancy or due to a work-related accident, the pay is 100%. 

After 33 days, the Social Security Institute (ZUS) takes over payments at the same rate. For employees over 50, the employer pays for the first 14 days, with ZUS covering the remainder.

Maternity Leave

Female employees are entitled to maternity leave based on the number of children:

• One child: 20 weeks
• Two children: 31 weeks
• Three children: 33 weeks
• Four children: 35 weeks
• Five or more children: 37 weeks

ZUS pays 100% of the salary for this leave. 

Maternity leave can start up to six weeks before the expected birth date and must include a minimum of 14 weeks post-birth​​.

Paternity Leave

Fathers are entitled to two weeks of paid paternity leave within the first 24 months after the child's birth or adoption. 

This leave can be taken in two installments and is paid at 100% of the salary​.

Parental Leave

Parents can take up to 41 weeks (43 for multiple births) of parental leave, starting after maternity leave. 

The first six weeks are paid 100%, and the remaining period is covered by the ZUS at 60%. 

If requested within 21 days of childbirth, the entire period can be paid at 80%​.

Childcare Leave

Employees raising at least one child under 14 are entitled to two paid days off per year. 

Additionally, employees with at least six months of service can take up to three years of unpaid childcare leave until the child is five years old (18 if disabled). 

During this leave, employees can work part-time if requested and approved​.

#8. Taxes and Social Contributions in Poland

Moving to the head-spinning part!!! 

When hiring remote employees in Poland, you must register with the Polish tax authorities and ZUS to properly handle mandatory payroll deductions, which include income tax, social security contributions, health insurance, labor fund, and employee guaranteed benefits fund. 

Here’s a breakdown of the key elements:

Personal Income Tax (PIT)

PIT in Poland is based on residency status. Polish tax residents are taxed on their worldwide income, while non-residents are taxed only on Polish-sourced income.

The tax system uses a progressive scale with two main brackets:

• For taxable income up to PLN 120,000: 12% - PLN 3,600 
• For income above PLN 120,000: 32% + PLN 10,800 
• 4% surcharge for income over PLN 1 million.

Individuals with less than PLN 30,000 annual income are exempted from the income tax requirement.

Social Security Contributions 

Social Security Contributions cover pension, disability, sickness, and accident insurance for the employees. 

The employer pays 16.26% while the employee contributes 11.26%, both up to a cap of PLN 234,720 (as of 2024). The employer withholds the employee's portion and remits both parts to ZUS.

Health Insurance

This funds the national healthcare system. 

The rate is 9% of the assessment base, which is the gross salary minus social security contributions. 

Although paid entirely by the employee, it's the employer's responsibility to withhold and remit this amount.

Labor Fund

This contribution supports employment programs and unemployment benefits. 

The rate is 2.45% of the gross salary and is paid entirely by the employer. 

It's calculated on top of the employee's gross salary.

Employee Guaranteed Benefits Fund

This protects employee claims in case of employer insolvency. 

The rate is 0.10% of the gross salary, also paid entirely by the employer and calculated on top of the gross salary.

Accident Insurance

This provides coverage for work-related accidents. 

The rate is 1.67% for employers with up to 9 employees and between 0.67% to 3.33% for larger employers, depending on the business sector (1.67% for foreign employers).

This is paid entirely by the employer.

#9. Retirement Plan in Poland

In Poland, the retirement savings system is structured differently compared to the United States, and there isn't a direct equivalent to the 401(k) plan. 

However, Poles do have some retirement savings options, and preferences can vary:

• Social Security System (ZUS): the primary retirement system of most Poles, which is mandatory and funded through payroll taxes as I discussed above.
• Employee Pension Programs (PPE): can be compared to employer-sponsored retirement plans as 401(k).
• Individual Retirement Accounts (IKE and IKZE): voluntary, private savings accounts by employees with tax advantages
• Employee Capital Plans (PPK): This system was introduced more recently and appears to be a preferable choice. The PPK is a voluntary retirement savings system that combines contributions from employees, employers, and the government. Employees are automatically enrolled but have the option to opt-out. Companies will have to pay 1.5% of the employee's salary, and employees have the option to contribute an additional 2.5%. 

This means that, in addition to the mandatory ZUS taxes, you must prepare PPK for your employees by default unless both agree on an alternative plan.

#10. Reimbursement for Remote Work

Poland rolled out updated guidelines for remote work that went into effect on April 7, 2023. This means that some additional remote work benefits that were previously job perks are now officially mandated by law.

Tools and Equipment: As an employer, you are required to provide all necessary equipment for your remote employees. This includes laptops, office supplies, and internet access. If your employees use their own equipment, you must reimburse them for it.

Running Costs: You need to cover the additional costs your employees incur while working from home. This typically includes internet and electricity bills. Reimbursement can be done in two ways:

• Exact Costs: Based on actual bills submitted by the employee.
• Lump Sum: A pre-agreed amount that’s reasonable and reflects average usage. On average, the cost could be around PLN 62 (approximately $15) per month for full-time remote work.

Final Thoughts

Hiring remote workers in Poland offers numerous benefits, including cost-effective labor (than the U.S.), a highly skilled workforce, and a favorable business environment.

Understanding payment methods, currency and taxation, salary components, payroll deductions, labor laws, and employee benefits in Poland is crucial for businesses to effectively navigate the complexities of hiring. And I hope this roundup of 10 facts gives you a better glimpse into these aspects!

Remember, you don’t have to do this all alone. 

If you’re not ready to set up a subsidiary in the Poland and handle employment-related administrative tasks on your own, partnering with an Employer of Record is the simplest way to hire international employees and manage compliance aspects there. For example, Deel provides a comprehensive solution for global hiring, payroll, and compliance that is trusted by many remote-first companies like Coinbase, Dropbox, and Shopify. (See our detailed review of Deel here.)

Check out my curated list of the Best Employer of Record Services in 2024 and guide to choose the right EOR partner. 

Disclaimer: This article is here to provide some helpful information, but it is not a substitute for professional tax, accounting, or legal advice. Be sure to consult with your tax, accounting, and legal advisors before engaging in any related activities or transactions.