Hire employees in Poland

In recent years, Poland has turned into a popular outsourcing destination for international companies. Especially when it comes to hiring remote software developers and IT specialists, the country ranks among the top destinations in Europe.

This is not only due to the high standards of provided services but also to the fact that costs are significantly lower than in other European countries which counts for wages as well as for social security contributions.

Polish labour law generally distinguishes between indefinite, fixed-term (extendable up to 33 months) and probation contracts (maximum three months). In order to be legally binding, employment contracts should be in writing and contain at least the following information:

• Identification of both parties

• Type of contract

• Date of its conclusion

• Date of commencement (and employment duration for temporary contracts)

• Workplace

• Type of work

• Base salary as well as other compensation or benefits

• Working hours and annual leave

When concluding an employment contract in Poland, employees and employers can decide to place the employment relationship under a foreign legislation. However, this does not mean that Polish labour law regulations do not have to be observed, especially in cases where the foreign law adopted for the employment contract is less beneficial for the employee.

Probation Period

In Poland, the probation period for new employees is limited to three months.

Working Hours and Breaks

Standard working time in Poland is fixed at eight hours per day and 40 hours per week. After having worked for six consecutive hours, the employee must take a break of at least 15 minutes.

An employee’s daily rest period should be at least eleven hours. Furthermore, employees have the right to a consecutive rest period of at least 35 hours per week.

Overtime

Generally, any work performed after standard working hours is considered overtime and must be remunerated at higher rates. Currently, compensation rates for overtime work are set as follows:

• 150% of normal wages for overtime required on standard working days (at daytime)

• 200% of normal wages for overtime required exceptionally on a Sunday – or public holiday or usual rest day – or at nighttime

Labour law in Poland limits the maximum amount of overtime work an employee is allowed to carry out over the course of one calendar year to 150 hours. Weekly working time is restricted to 48 hours – including overtime.

Employees in Poland must be paid at least once a month.

Minimum Wage

On January 1, 2023 the national minimum wage rose to PLN 3,490 gross. The minimum hourly rate is PLN 22.80. In July, the minimum wage will increase to PLN 3,600 per month and to PLN 23.50 per hour.

Sick Pay

Employees who are unable to perform their work due to illness or injury are entitled to sick pay equaling 80% of their usual wages. During the first 33 days of sickness-related absence from work, it is the employer’s obligation to cover sick pay – limited to 14 days in case the employee is aged 50 or older.

Long-term sickness, i.e. sickness exceeding 33 days, is covered by Polish social security at the same rate but is limited to a maximum of 182 days per year. For every absence from work due to sickness or injury, the employee has to provide the employer with a medical certificate.

Bonuses

There is no law in Poland which requires the payment of an annual bonus.

Employees and employers in Poland are subject to the following tax and social security contribution rates (last review February 2023):

Taxes

Employers

19%

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• 19% corporate tax rate

• 23% VAT (standard rate)

• no payroll tax

Employees

up to 32%

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• up to PLN 120,000: 12%

• over PLN 120,000: 32%

4% solidarity surcharge on income over PLN 1,000,000

Social security

Employers

around 21%

---

• 9.76% for national pension scheme

• 6.5% disability fund

• 2.45% Labour Fund

• 1.67% accident insurance (for companies employing less than nine people, otherwise between 0.67% and 3.6%)

• 0.1% Guaranteed Employee Benefit Fund

The calculation basis for pension and disability contributions is capped at PLN 208,050.

Employees

around 23%

---

• 9.76% for national pension scheme

• 9% health insurance

• 2.45% sickness insurance

• 1.5% disability fund

The calculation basis for pension and disability contributions is capped at PLN 208,050.

Please note that the social security contributions indicated above do not necessarily reflect the actual employment costs. These may differ depending on the employment contract and due to other factors (e.g. 13th and 14th salary, health insurance allowances, accrual for severance pay, etc.).

Annual Leave

Annual leave entitlements depend on the employee’s entire employment history. Employees who have completed up to ten years of employment – including any kind of previous employment – are generally entitled to a minimum of 20 days of paid annual leave. For employees with an employment history exceeding ten years, the number of paid vacation days rises to 26 days.

The 12 public holidays observed in the country are also non-working days. If a public holiday falls on a Sunday, the employee must receive an additional day off to compensate for it.

Maternity Leave and Paternity Leave

Basic maternity leave in Poland is 20 weeks and usually starts no earlier than six weeks before the expected due date. In case of multiple births, maternity leave can be extended to up to 37 weeks. During the first 26 weeks of maternity leave, the employee receives maternity benefits from social security amounting to 100% of her regular wages. For any additional week, maternity benefits drop to 60%.

After the first 14 weeks, the mother can decide to transfer the remaining six weeks of maternity leave to the child’s father. Statutory paternity leave is generally limited to 14 days and must be taken within the first year after birth. During this leave, employees receive their full salary paid by Polish social security.

Parental Leave

Mothers and fathers are legally entitled to take parental leave in order to look after their children. Parental leave must be taken immediately after the end of maternity leave and is limited to a total of 32 weeks which can be shared between both parents. Remuneration during this time is paid by social security at rates of 60% or 80% of the parents’ normal wages, depending on the regulations that applied during maternity leave.

An additional 36 months of unpaid parental leave can be granted to employees with children under six years and whose length of service exceeds six months.

An amendment to the current parental leave law is expected to enter into effect in the first half of 2023. Under the new rules, parents would have an independent right to 9 weeks of parental leave which would hence not be transferable to the partner. Furthermore, the parental benefits paid during this time would be equal to 81.5% of the employee's usual earnings if the application is submitted timely.

Additional Leave and Benefits

• 6 days of training leave for employees who have to sit an exam as part of a workplace training

• 2 days leave on occasions such as the employee’s wedding or funeral of a close relative or partner

• 5 days of unpaid childcare leave per calendar year

• 2 days of leave paid at a rate of 50% for urgent family matters

Please note that the last two leave entitlements have yet to enter into effect.

In addition to employment termination by default – i.e. in case of a fixed-term contract – resignation and mutual agreement, Polish labour law provides for the following reasons for employee dismissal:

Reasons for termination without prior notice (non-exhaustive):

• criminal offence

• gross misconduct

• loss of job-related qualification

• long-term illness

Reasons for termination requiring prior notice (non-exhaustive):

• collective redundancies

• business-related reasons

• permanent underperformance

In cases where prior notice must be given, the notice period – including employee dismissal during their probation period – is calculated as follows:

Only those employees who are made redundant are entitled to severance pay which ranges from one month’s to three months’ wages. However, Polish law limits the maximum redundancy pay to fifteen times the national minimum wage.