Benefits of using an Polish PEO & Employer of Record
Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR) in Poland, is a fast and often more effective option to start up in a new country PEOs/EORs provide you with a great solution for hiring employees, testing markets, and responding to growing business needs in Poland. Other benefits include:
- Expand without an entity
- Flexible and cost-effective solution to outsource payroll and HR functions for international expansion
- In compliance with foreign local laws & regulations
- Minimizes employment liabilities and risks
- Reduced risk, as the risks of being an employer fall almost completely on the employer of record
- Let's you focus on your core business
- You manage your employees
- EoR takes care of registration and contact with local authorities
Employment Contracts Poland
What are the main types of employment contracts in Poland? An unlimited-term contract is the most common employment contract in Poland. The main reasons to give an employee an unlimited contract is to give trust, stabilization and simulate loyalty. Recently, however, due to the uncertain pandemic circumstances, there is a trend to start with an fixed-term contracts.
Important note to fixed-term contract in Poland: The period of employment under a fixed-term contract, as well as the total period of employment under fixed-term contracts, may not exceed 33 months, and the total number of the contracts may not exceed three.
Employment contracts regulate the main aspects of the working relationship between employer and employee including type of contract, type of work, place of performing the work, the remuneration, length of working time and date of commencing work.
Polish PEO and EOR service providers will/can support you with the set-up of a Polish employment contract.
Employment Termination Poland - Notice Period Poland
In Poland, an employment contract can be terminated by:
- Mutual agreement
- a ‘statement of will’ of one of the parties with a period of notice (termination of a contract of employment with notice)
- expiry of the contract term.
The reason for termination or dismissal must be provided. The reason must be real and specific. Examples of reasons to terminate with notice may be attributable to the employee: non-performance or improper performance of duties. Termination without notice (summary dismissal) may be justified for a number of reasons, but is only permitted when certain statutory conditions are met.
What is the notice period in Poland? Notice for temporary or permanent employment:
- 2 weeks if the employee was employed for less than 6 months;
- 1 month if the employee was employed more than 6 months and less than 3 years
- 3 months if the employee was employed for 3 years or more.
If an employer employs more than 20 employees, and terminates a contract for non-employee related reasons (e.g reduction of workforce), the employer must pay a severance payment.
- 1-month severance pay if employee has less than 2 years of employment.
- 2 months’ severance pay if employee has between 2 and 8 years of employment
- 3 months’ severance pay if employee has over 8 years of employment
severance pay is capped by statute at 15 times the national minimum monthly salary: $ 10.441,62 (39,000 PLN).As the PEO and Employer Of Record service provider in Poland is the formal employer of your employees in Poland, they are also responsible for terminating the contract while applying the applicable Polish terms.
Social Security Tax & Employer Payroll Tax in Poland
In Poland, both the employer and employee have to contribute to the Polish social security system. Details of the social security contribution calculation in Poland are shown in the table below. The pension and disability insurance for employers are capped at a total gross salary of $ 42.221,62
|Accident Insurance||0.67 %- 3.33% (dependent on business sector - 1.67% for foreign employers)|
|Employee Guaranteed Benefits Fund||0.10%|
|Total||19.48% - 22.14%|
Click here to have an overview of the social security tax rates for employers in Europe in 2021. On average, the social security tax rate for employers in Europe in 2021 is 20%. This is a lot higher than North American employers are used to.
Average Salary Poland & Average Employer Costs Poland
The current minimum wage in Poland is $ 765 (2.800 PLN). What are the costs of employing employees in Poland? In 2019, the average annual wage in Poland was $ 31.969,57. This is lower than the average annual wage in the United States: $65.835,58. As a foreign employer, the actual employer costs are at least 20.48% higher than the gross annual salary (social security taxes). Based on a $31.969,57 annual salary, the employment costs would be $38.516,94.
To learn more about the average salaries in Europe and the actual employment costs in Europe, we invite you to read this article on Costs of hiring European employees.
Working hours Poland
Full time employment in Poland is considered 8 hours per day and 40 hours per week. Weekly working hours including overtime cannot exceed 48 hours. Annual overtime cannot exceed 150 hours. Instead of paying for overtime employers may grant the employee time off work.
Paid vacation leave Poland
In Poland Employees are entitled to 20 days if the employee has been employed for less than 10 years. Employees who have been employed for more than 10 years receive 26 days. For more information on paid vacation days in Europe, please feel free to read our blog on paid vacation days in Europe 2021.
Public Holidays Poland
In Poland, there are 12 public holidays.
- New Year's Day - 1 January
- Epiphany - 6 January
- Easter Monday - 18 April
- Labor Day - 1 May
- Constitution Day - 3 May
- Pentecost - 5 June
- Corpus Christi - 16 June
- Assumption Day - 15 August
- All Saint's Day - 1 November
- Independence Day - 11 November
- Christmas Day - 25 December
- 2nd Day of Christmas (St. Stephen's Day) - 26 December
Maternity and Paternity Leave Poland
In Poland mothers are entitled to as much as 52 weeks of leave in connection with maternity, consisting of three parts:
- twenty weeks of maternity leave;
- six weeks of additional maternity leave;
- twenty-six weeks of parental leave.
The additional maternity leave (6 weeks) and the parental leave (26 weeks) are provided only if an employee requests them. In this last period, the employee is entitled to 60% to 80% of her salary. More information about maternity leave in Europe can be found in this blog.
Paternity leave may be used only by a father who is an employee until the child reaches the age of 2. Paternity leave in Poland lasts 2 weeks and may be split into two parts lasting 1 week or used at one time.
Why do you need a PEO or EOR in Poland?
- Polish law and regulations are complicated, save yourself time and money by partnering up with a PEO or Employer of Record in Poland
- Reduce the risks of non-compliance payroll
- Let's you focus on your core business
- As PEO we take responsibility for all employment tasks and compliant payslips, including taxes and other contributions
- As experienced PEO, we’re able to help you out get work permits, visas and onboardings really fast
Learn more about PEO and EOR in Europe:
Get in contact or request a quote
Learn more about PEO and EOR in other European countries:
Monique Ramondt Sanders
Executive Vice President | HR Outsourcing