Poland payroll and benefits guide

What global businesses need to know about payroll in Poland

Of all the eastern European countries that abandoned Communism at the end of the Cold War, Poland has been one of the biggest success stories economically. Only around 35 years into its current capitalist era, it ranks just outside the global top 20 for GDP—indeed, since 1992, Poland’s GDP has grown every single year, except for 2020 and the extenuating circumstances of the COVID-19 pandemic.

Poland joined the European Union in 2004 and has since become relied upon as a European industrial powerhouse. More than half its exports go to other EU countries or to the United Kingdom, with particularly large industries in automotive, electric batteries and furniture.

In the past, many global businesses have favored Poland thanks to a well-educated workforce and strong work ethic, available at lower salaries than would be the norm in the West. However, Poland’s success means that it isn’t as ‘cheap’ as it used to be, and average earnings are getting closer and closer to western European standards every year.

Poland’s rapid economic growth has led to a number of changes to its payroll and employment laws. Minimum wage rates are regularly being revised upwards, while there are also adjustments to consider across employer subsidies for disabled workers, a new public holiday, and extra maternity leave entitlements. All this and more can be explored 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 PLN 5,000 (approximately £995; $1,330; €1,170), 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 PLN 100,000 (approx. £19,900; $26,600; €23,400).

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. These subsidies were increased at the end of 2024, but applied retrospectively from July 1^st2024 onwards, meaning that employers can apply for extra government funding if they have had disabled employees during this time.

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. Additionally, 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, or 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

Employees in Poland are typically paid on a monthly basis, and employers should be aware that the minimum wage rate is rising regularly and rapidly. As of the first half of 2025, the rate had increased to PLN 4,666 per month (approx. £930; $1,240; €1,090) and PLN 30.50 per hour (approx. £6.10; $8.10; €7.10). This means the minimum wage rate has nearly doubled in the last five years. Further increases are likely in the future, and they are generally implemented on January 1^st and/or July 1^st each year.

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 PLN 1,000 per month (approx. £200; $265; €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.

Personal Income Tax (PIT) is administered by the Urzad Skarbowy (Tax Office) and is set at three progressive bands, which have remained largely stable for the last few years. The first 30,000 złoty a year (approx. £6,000; $8,000; €7,000) is exempt. Earnings above this up to 120,000 złoty (approx. £23,900; $31,900; €28,100) are taxed at 12%; income above this is taxed at 32%.

The stability in Poland’s tax rate is especially interesting given the rapid increases in average wages. As of the first quarter of 2025, the average annual wage in the private sector was around PLN 105,000 (approx. £20,900; $27,900; €24,600), 63% more than it was five years previously. As earnings continue to rise, more and more Polish workers are finding some of their wages are subject to the higher tax bracket.

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. 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 can be transferred into the first nine months of the following 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, six of which are taken prior to the birth. Additional time is given for multiple births, while pregnant women or those on maternity or parental leave cannot be dismissed by their employer. 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.

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. Two days of paid leave are also given for life events like weddings and funerals.

Payroll in Poland: A summary

Poland’s economic and business landscape has changed dramatically over the last two or three decades, and continues to do so at pace today. Its payroll and employment regulations are regularly being reviewed and adjusted, meaning that from a compliance standpoint, many payroll teams may find they’re aiming at a moving target. A global payroll partner with access to Poland-specific expertise can help you stay on the right side of compliance, and remove practical barriers from a successful expansion into this exciting, growing economy.

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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