Poland payroll and tax overview.

Foreign Direct Investment in Poland

Polish law is rather favourable to foreign entrepreneurs. The government offers investors various forms of state aid, such as CIT Tax at the level of 19% and 9 % in case of so-called ‘small taxpayers’ whose income doesn’t exceed EUR 1.200.000. Euro and investment incentives in 14 Special Economic Zones (among others: income tax exemption, real estate tax exemption, competitive land prices), several industrial and technology parks, the possibility to benefit from the EU structural funds, brownfield and greenfield locations. According to the National Bank of Poland (NBP) the level of FDI inflow into Poland in 2006 amounted to €13.9 billion.

Registering A Company And Establishing an Entity in Poland

Foreign employers who have no presence in Poland must obtain a NIP (Taxpayer Identification Number) by contacting the tax office to pay social security contributions. If the employer is already registered in Poland as an EU VAT taxpayer, the VAT identification NIP number can be used by removing the PL symbol. Once a NIP has been obtained, employers must register as a contribution payer by completing a ZUS ZPA form and submitting it to the Social Security Institution (ZUS).

Business Banking in Poland

An in-country bank account is mandatory to process payroll in Poland. It is possible to open either a Polish currency or foreign currency bank account in Poland. To open an account in Poland, the foreign national will normally be required to show their passport and evidence of residence in Poland. Some banks require a minimum deposit.

Normal banking hours are from 9:00 to 17:00, Monday to Friday. Banks are closed on Saturdays and Sundays.

Working Week in Poland

In Poland, the average working hours are 40 hours a week (8 hours a day - 5 days a week). Working hours are usually from 8:00 to 16:00.

Basic Facts about Poland

Official Name: Republic of Poland

Population: 39.9 million (Central Statistical Office, 2023)

Capital: Warsaw

Main Language: Polish

Major Religion: Christianity

Monetary Unit: Złoty (PLN)

Main Industry: Machine Building, Iron and Steel, Mining Coal, Chemicals, Ship Building and Food Processing

GNI per Capita: $36,060 (Central Statistical Office, 2021)

Internet Domain: .pl

International Dialing Code: +48

The tax year runs from 1st January to 31st December.

Income Tax in Poland

Employees are taxed on any income earned if they have lived in the country for at least 183 consecutive days during the tax year.

All employees start the tax year on the 12% tax rate and only move to 32% when the annual threshold is exceeded. Tax returns should be submitted between 15 February and 30 April every year.

Social Security in Poland

Social security contributions are categorized into:

• Old-age pension
• Disability pension
• Sickness insurance
• Work accident insurance

Each social security contribution must be calculated and listed separately on employee payslips.

From 2023, employees are automatically enrolled in the pension provision scheme, Pracowniczy Plan Kapitalowy (PPK), who are aged between 18 and 55. Employee contributions are taken from net pay and aren’t tax deductible or deemed as income. Employer contributions must be considered a benefit in kind and must be added to monthly tax calculations.

New Employees in Poland

Employers aren’t required to follow a formal registration process for new employees with the tax office.

Leavers in Poland

Employers aren’t required to follow a formal resignation process for leavers with the tax office but must issue leavers with a work certificate. A work certificate must include the following:

• Period of employment.
• Position held.
• The number of holidays taken in the current calendar year.
• The number of sick days taken in the calendar year.
• The number of days and dates of maternity and parental leave taken.