Poland payroll and benefits guide
What global businesses need to know about payroll in Poland
Did you know that Poland’s national minimum wage is now in the top ten among all the countries in the European Union? And that its average wage (converted from złoty into euro) is now only €500 a month lower than Spain’s, and €600 lower than Italy’s?
The idea of Poland offering a cheap eastern European equivalent to the high salaries and employment costs of established western markets has swiftly been consigned to history. As a result, more and more international businesses are looking at Poland as an attractive destination in its own right, supported by a well-educated, hard-working labor force — instead of as a way to outsource and save money.
Poland’s government is keen to ensure that its population of around 38 million people can benefit from their relative new-found prosperity, especially families. A new radical tax break will lift the majority of parents out of paying any income tax at all, saving them considerable amounts of money that they can put back into the Polish economy.
This change along with other major developments, including the latest minimum wage rate, are all included in this guide to running payroll in Poland.
Getting Started
Business registration in Poland is relatively straightforward. Most companies will set up as one of two business entities: a limited-liability company (known as an Sp. z. o. o.) or a joint-stock company (an S.A.).
The former is preferable for many organizations as the minimum share capital is only 5,000 złoty (approximately £1,020; $1,370; €1,175), and because only one official director and one official shareholder are required. Larger businesses, on the other hand, may choose to run an S.A. that is listed on the stock exchange; the minimum share capital for an S.A. is 100,000 złoty (approx. £20,300; $27,400; €23,500).
Companies should register at the National Court Register (KRS) once a bank account has been opened and the Articles of Incorporation have been notarized. Once this is completed, a KRS number will be issued, and then an application can be made for a tax registration (NIP) number.
Many of these processes can be done online, however, at present, some websites like the Portal of Court Registers are only available in Polish. Some of the paper documents involved in the ‘traditional’ process must also be completed in Polish. This means you may need the help of a native Polish speaker.
It’s also important to register for Płatnik, an online government portal for reporting and payments for tax and national insurance. New employees should be registered on Płatnik within seven days of starting. Departing employees should be de-registered within seven days of leaving.
Employment Considerations in Poland
Non-EU residents are employed on the same terms as EU citizens, provided they have a valid work permit. Poland also has an alternative form of employment called ‘civil law agreements’ (‘umowa-zlecenie’ in Polish), which is similar to freelancing in that people are employed to perform specific tasks. These agreements are free of many of the Polish labor laws applicable to normal employees.
PFRON is a Polish system that offers government subsidies to employers who employ people with disabilities, and the rates are variable depending on the level of disability of each employee concerned. The subsidies range between 575 złoty (approx. £115; $155; €135) and 4,140 złoty a month (approx. £840; $1,130; €975), depending on the severity of the employee’s disability.
In line with many other European countries, standard working hours are eight hours per day and 40 per week. Anything over and above this is considered overtime, and employees should not work more than 48 hours a week inclusive of overtime (in line with the limits set out in the EU Working Time Directive).
Overtime is capped at a maximum of 150 hours per calendar year. It should be paid at 150% of normal rate, or 200% on Sundays, public holidays, between 9:00pm and 7:00am, or on other days when an employee wouldn’t normally work. Overtime can be paid as time off in lieu, subject to mutual agreement.
Employees can be taken on for a probation period of a maximum of three months, before they are taken on a fixed-term, ‘definite’ contract (maximum 33 months in length) or a rolling ‘indefinite’ contract. Notice periods in Poland are two weeks for employees with less than six months’ service, rising to one month after six months’ service, and three months after three years’ service.
Compensation, Bonuses and Severance
In line with Poland’s sustained economic growth, its minimum wage has risen sharply and regularly in recent years. As of 2026, the rate stands at 4,806 złoty per month (approx. £980; $1,320; €1,130), which means it has more than doubled in the space of seven years. Changes generally take place on January 1 each year, but have also been known to happen on July 1 (as was the case in 2023 and 2024), so keep a close eye out for further increases.
Paying bonuses to employees in Poland is common, especially as there are no strict rules around the amounts and forms of them, other than that they are taxed in the same way as normal earnings as part of total employee income. Additionally, employee benefits are regularly offered, with many employees looking for healthcare, phone and car allowances. As remote working has become more popular post-pandemic, home-working and home office set-up allowances have also become more popular. Collectively, these allowances can often add up to as much as 1,000 złoty a month (approx. £205; $275; €235) or sometimes more.
Severance pay works on a sliding scale, starting at one month’s pay for those with less than two years of service. This rises to two months’ pay after two years, and three months’ pay after eight years. This only applies to businesses with a headcount over 20. There is also a maximum cap on severance pay, which is 15 times the national minimum wage in place at the time.
Tax and Withholding Considerations in Poland
All employers who have a physical presence in Poland are required to withhold tax and social insurance contributions from salaries. Despite this, employees must still fill out an annual tax return for administrative reasons.
The Polish government has recently introduced a radical new income tax break for families. As of the 2026 tax year (for which filings and payments will be made in 2027), each parent with annual earnings of less than 140,000 złoty a year (approx. £28,500; $38,300; €32,900), and who has at least two children under 18, will be exempt from paying income tax altogether.
The tax break also applies to foster and adoptive parents, and has been estimated to save the typical Polish family around 1,000 złoty a month (approx. £205; $275; €235). Given that the average wage in Poland at the end of 2025 was around 110,000 złoty a year (approx. £22,400; $30,100; €25,900), it’s likely that the majority of parents will be able to take advantage of this new rule.
For employees who don’t qualify for this tax break, the usual three bands — which have remained stable in recent years — are applied. The first 30,000 złoty a year (approx. £6,100; $8,200; €7,050) is exempt. Earnings above this up to 120,000 złoty (approx. £24,400; $32,900; €28,200) are taxed at 12%; income above this is taxed at 32%.
The standard corporate tax rate is 19%, and the main VAT rate is 23%.
Employers and employees also have to make a variety of different social security contributions, including:
- Retirement and pension: 9.76% employer and employee
- Disability fund: 6.5% employer, 1.5% employee
- Accident fund: 0.67%-3.33% employer
- Labor fund: 2.45% employer
- Guaranteed employee benefits: 0.1% employer
- Sickness fund: 2.45% employee
- Health insurance: 9% employee
Holiday and Leave Considerations
Poland’s tally of public holidays each year has been increased from 13 days to 14 as of 2025; Christmas Eve has been added to the roster. Days off in lieu must be given if any fall at the weekend.
Outside of these, employees in Poland are entitled to 20 days’ paid leave each year, rising to 26 days once they have worked for ten years in total (unusually, this does not have to be with the same employer). An extra ten days are given to employees with disabilities. There is also an additional two days leave per year, paid by employers, for parents who have at least one child under the age of 14.
Generally speaking, leave is taken as one big block in the summer, however, it can be split into two as long as one of the blocks is at least 14 leave days in duration. Any unused leave should be automatically transferred into the following year, but should then be used by the end of September of that year.
Paid sick leave entitlement is covered at 80% of salary by employers initially, and by social security after a defined threshold. That threshold depends on the age of the employee: social security kicks in after 33 days for employees under 50, but after only 14 days for employees 50 or over. The sick pay rate rises to 100% if the illness or injury occurs during pregnancy, or while traveling to or from work.
Maternity leave entitlement in Poland is set at 20 weeks, starting six weeks before the due date. Additional time is given for multiple births (to as much as 37 weeks in cases of quintuplets or more), while pregnant women or those on maternity or parental leave cannot be dismissed by their employer. Mothers can return to work six weeks early if, by written agreement, the father takes over the maternity leave to take care of the child instead.
In March 2025, an additional maternity leave entitlement was introduced for mothers whose babies are born prematurely or require a long hospital stay. In these situations, an extra eight or 15 weeks is added onto the end of the standard maternity leave period. Paternity leave is two blocks of one week each, taken within the first two years of the child’s birth. Both maternity and paternity leave pay are 100% of normal salary, and are covered by social security.
Parental leave is 41-43 weeks depending on the number of births. Each parent has the exclusive right to nine weeks, while the remainder is flexible between parents. Normally, parental leave is paid by social security at 100% of salary for the first six weeks and 60% thereafter. However, this can be changed to 80% for the full period if it’s requested within three weeks of the child’s birth.
Two days of paid leave are also given for life events like weddings and funerals.
Payroll in Poland: A summary
Poland’s employment and payroll landscape has changed faster than just about any other European country over the last few years. Unique reforms like the parental income tax exemption bring some different challenges from a payroll perspective, and consistent increases to the minimum wage can also have an impact. If you feel you’re aiming at something of a moving target in terms of payroll compliance, working with a global payroll partner can help keep you on the right track, whatever changes arise in Poland in the future.
This article is for informational purposes only and not intended to convey or constitute legal or any other advice. It is not a substitute for advice from a qualified professional.
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