Employer of Record in Poland
Comprehensive Guide to Employer of Record (EOR) in Poland
What is an Employer of Record (EOR)?
An Employer of Record (EOR) in Poland is a third-party service provider that acts as the legal employer for a company’s workforce in Poland. The EOR manages employment responsibilities such as payroll, taxes, compliance, and employee benefits, while the client company handles day-to-day work operations.
This model is ideal for businesses looking to hire employees in Poland without establishing a legal entity.
Essential Functions of an EOR in Poland
- Legal Employer: The EOR is the official employer for the workforce and ensures compliance with Polish labor laws.
- Payroll Management:
- Processes employee salaries in compliance with Polish tax laws.
- Handles income tax deductions and social contributions.
- Tax Compliance:
- Ensures accurate filing of taxes, including income tax and VAT (if applicable).
- Avoids penalties for non-compliance.
- Social Security Contributions:
- Manages contributions for health, pension, and unemployment insurance.
- Registers employees with the Social Insurance Institution (ZUS).
- Work Permits and Visas:
- Assists in securing work permits and visas for foreign employees.
- Ensures compliance with Polish immigration laws.
- Benefits Administration:
- Manages mandatory and supplementary benefits, such as health insurance, pensions, and paid leave.
- Termination Support:
- Ensures lawful terminations, including notice periods and severance payments.
Benefits of Using an EOR in Poland
- Market Entry Without a Local Entity:
- Simplifies hiring employees without establishing a legal subsidiary.
- Compliance Assurance:
- Adheres to Poland’s complex labor and tax regulations.
- Cost Efficiency:
- Avoids administrative costs associated with creating a legal entity.
- Quick Scalability:
- Flexibly expands or contracts the workforce.
- Administrative Relief:
- Offloads HR, payroll, and compliance responsibilities to the EOR.
- Risk Mitigation:
- Reduces legal and financial risks associated with non-compliance.
Labor and Employment Laws in Poland
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Employment Contracts:
- Must be in writing and include:
- Job title and responsibilities.
- Salary details.
- Working hours.
- Termination clauses.
- Types of contracts:
- Permanent Contracts: For indefinite employment.
- Fixed-Term Contracts: Limited duration, renewable up to 33 months.
- Probation Contracts: Up to 3 months.
- Must be in writing and include:
-
Working Hours:
- Standard: 40 hours per week (8 hours/day).
- Maximum Overtime: 48 hours per week, including overtime.
- Overtime Pay:
- 150% of regular pay for weekdays.
- 200% of regular pay for work on weekends and public holidays.
-
Leave Policies:
- Annual Leave:
- Minimum of 20 days for employees with less than 10 years of experience.
- 26 days for employees with more than 10 years of experience.
- Sick Leave:
- Paid at 80% of salary for up to 33 days (covered by the employer).
- Beyond 33 days, social insurance covers sick leave.
- Public Holidays: 13 paid public holidays per year.
- Annual Leave:
-
Maternity and Paternity Leave:
- Maternity Leave:
- 20 weeks, fully paid by social insurance.
- Up to 32 weeks for multiple births.
- Paternity Leave:
- 14 days, fully paid.
- Maternity Leave:
-
Termination:
- Notice Periods:
- 2 weeks for employment under 6 months.
- 1 month for employment between 6 months and 3 years.
- 3 months for employment over 3 years.
- Severance Pay:
- Required for collective redundancies or dismissal due to company closure.
- Equivalent to 1–3 months’ salary based on tenure.
- Notice Periods:
Payroll Management in Poland
-
Salary Payments:
- Employees are typically paid monthly, by the last day of the month.
- Payment must be in Polish zloty (PLN).
-
Income Tax Rates:
- Up to PLN 120,000: 12%.
- Above PLN 120,000: 32%.
-
Social Security Contributions:
- Employer:
- Pension Insurance: 9.76%.
- Disability Insurance: 6.5%.
- Accident Insurance: 0.67–3.33% (industry-dependent).
- Labor Fund: 2.45%.
- Employee Benefits Fund: 0.1%.
- Employee:
- Pension Insurance: 9.76%.
- Disability Insurance: 1.5%.
- Health Insurance: 9%.
- Employer:
-
Payroll Compliance:
- Monthly payroll filings to ZUS and tax authorities.
- Detailed payslips must be provided to employees.
Employee Benefits in Poland
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Mandatory Benefits:
- Health insurance via National Health Fund (NFZ).
- Pension contributions to ZUS.
- Paid leave (annual, maternity, paternity, sick leave).
-
Supplementary Benefits (Common in competitive sectors):
- Private health insurance.
- Meal allowances or vouchers.
- Transportation stipends.
- Gym memberships and wellness programs.
- Professional development and training.
Work Permits and Visas in Poland
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Types of Work Permits:
- Type A: For employment under a Polish employer.
- Type B: For board members residing in Poland.
- Type C: For foreign employees working for a foreign employer, stationed in Poland.
- Type D: For employees conducting seasonal work.
- Type E: For employees working temporarily in Poland for extended periods.
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Visa Types:
- Type D Visa: National visa for long-term stays (valid for up to 1 year).
- Schengen Visa: For short-term stays (up to 90 days).
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Application Process:
- Employer applies for the work permit on behalf of the employee.
- Required Documents:
- Employment contract.
- Proof of qualifications.
- Copy of the passport.
- Residence Permit:
- Issued alongside the work permit for long-term stays.
-
Processing Times:
- Work Permit: 1–2 months.
- Visa: 15–30 days.
-
Costs:
- Work Permit: PLN 50–200, depending on the permit type.
- Visa: €80–100.
Industries Utilizing EOR Services in Poland
- IT and Technology: Poland is a major hub for IT talent and outsourcing.
- Manufacturing: The automotive and electronics sectors rely on foreign investment.
- Finance and BPO: Poland hosts numerous shared services and BPO centers.
- Healthcare: Growing demand for skilled medical professionals.
