Your guide to payroll in Poland

Understanding payroll in Poland is a crucial pillar to staying compliant with local legal and financial requirements. Employers are responsible for calculating salaries, withholding taxes, making social security contributions, and managing payroll-related documentation. 

Like every other country, Poland has defined labor laws that govern payment timelines, minimum wages, deductions, and tax requirements.

In this blog, you’ll find a comprehensive overview of how payroll works, how to adhere to tax regulations, and how Payoneer Workforce Management can facilitate and streamline the payroll process.

Poland payroll: Wages and other payments

Labor laws in Poland specify several protocols and terms related to remuneration under payroll. In addition to basic wages, employees are also entitled to various components, including bonuses, prizes, commissions, and allowances. 

Payroll cycle in Poland

According to Polish employment laws, base remuneration must be paid at least once a month on a fixed date, as outlined in the employment contract. However, it can be calculated on a monthly, weekly, hourly, result-driven, or commission-driven basis. Here are some mandatory terms of payroll cycles.

• As an employer, you are required to pay remuneration at the place, date, and time specified in the work regulations or other provisions of the labor law or as stated in the notice. 
• If the payment structure is set for more than a month, it must be paid within the deadlines established by Polish labor laws. Also, you’ll need to pay interest in the case of missed deadlines.

Minimum wages

Employers in Poland are required to adhere to the national minimum wage requirements, regardless of the employee’s qualifications or job profile. This payroll requirement in Poland applies across all regions, industries, sectors, and skill levels. The standard amount cannot vary based on location or other factors.

The minimum wage in Poland has been set to 4666 PLN since January 1, 2025, which means any amount lower than this amount is not permissible by law. 

Overtime pay

All employees are entitled to standard pay for each extra working hour. Overtime can be compensated either through payment or equivalent time off. Poland’s payroll laws have standardized the overtime pay structure.

100% overtime allowance	Employees are entitled to overtime pay, paid in full, for working at night, on Sundays, and other public holidays that are not workdays specified in the contract. Also, this applies to employees working over 40 hours a week.
50% overtime allowance	Employees receive 50% extra pay for overtime on regular workdays, rest days, or compensatory days off. Night overtime earns 100%. If overtime exceeds daily and weekly limits, only one overtime allowance is granted, not both.
Free time requested by employees	Upon a written request, employees may receive time off equal to the number of overtime hours worked. This time off can be taken even outside the reference period in which the overtime occurred.
Free time without the employee’s request	An employer can grant free time without a written request, but it must be 1.5 times the extra hours they are compensating for. However, this cannot be used after the reference period ends.
Lump sum for overtime work	Employees who regularly work outside the employer’s premises are entitled to both standard and additional overtime compensation as a lump sum payment.

Sick pay

Employees in Poland are entitled to paid sick leave. The payment applies for a period of:

• Up to 33 days per calendar year, this is paid by the employer, while the social insurance (ZUS) covers the remainder.

The standardized amount of sick pay is 80% of the remuneration and 100% in the case of:

• Accident on the way to or from work,
• Illness during the pregnancy period for women
• Undergoing medical examinations for donors of cells, tissues, and organs.

Moreover, sick leave can extend to 182 days, or 270 days for pregnancy or tuberculosis.

Maternity pay

Female employees in Poland are entitled to a fixed period of maternity leave. The duration of paid time-off varies according to the following:

20 weeks	Birth of one child
31 weeks	Birth of two children
33 weeks	Birth of three children
35 weeks	Birth of four children
37 weeks	Birth of five or more children

Also, after childbirth, the mother is entitled to at least 14 weeks of paid leave applicable from the day the child is born. 

Paternity pay

Male employees can request paternity leave in writing to their employers, for which they shall be paid in full. But the duration of the paid leave cannot exceed 2 weeks. 

Severance pay

In the event of contract termination due to a redundancy from the employer’s end, severance pay is required as follows:

Employment Duration	Severance Pay
Less than 2 years of service	1 month’s salary
2 years to less than 8 years	2 months’ salary
8 years or more	3 months’ salary

The severance amount in Poland is capped at 15 times the statutory minimum salary.

Payroll in Poland: Contributions and deductions

Employers are also responsible for withholding taxes and contributions as defined by the Polish government. These deductions are considered part of employee benefits, and the contributions vary depending on the cause.

Salary tax in Poland 

Poland uses a progressive personal income tax (PIT) system with two main tax brackets:

Annual Taxable Income (PLN)	Tax Rate
Up to 120,000	12% of taxable income
Over 120,000	32% of the amount exceeding PLN 120,000

• The tax-free amount is set at PLN 30,000. This means that individuals earning PLN 30,000 or less per year are exempt from PIT.
• For income up to PLN 120,000, the 12% tax is reduced by PLN 3,600 (which corresponds to 12% of the tax-free amount).
• For income exceeding PLN 120,000, the tax is calculated as PLN 10,800 (i.e., 12% of 120,000 minus PLN 3,600) plus 32% of the portion above PLN 120,000. The PLN 3,600 tax credit is already factored into this calculation.

Other employee benefits

Remote Work Benefits (Mandatory under Remote Work Regulations)

Poland Remote Work Reimbursements and Allowances

• Employers in Poland have specific obligations regarding remote work, which include:
• Providing, insuring, and offering training for all remote-work equipment.
• Covering the expenses for installation, service, operation, and maintenance of the equipment.
• Reimbursing employees for remote-work costs such as utilities, internet, and phone.

Tax-Free Lump Sum Allowances 

All cash equivalents, reimbursements, and lump sums provided are tax-free.

The compensation for remote work in Poland, provided as a lump sum (PLN/month), varies based on whether the devices are employer-provided or employee-owned, and the work arrangement (Full Remote or Hybrid):

• Employer-Provided Devices:
  • Full Remote: 50 PLN
  • Hybrid: 25 PLN
• Employee Using Own Devices:
  • Full Remote: 100 PLN (Breakdown: 75 PLN for materials & tools + 25 PLN for maintenance)
  • Hybrid (Option 1): 100 PLN (Breakdown: 75 PLN for materials & tools + 25 PLN for maintenance)
  • Hybrid (Option 2): 50 PLN (Breakdown: 37 PLN for materials & tools + 13 PLN for maintenance)

Poland payroll compliance best practices

When hiring internationally, especially in Poland, managing payroll requires careful attention to detail. Key considerations include:

• Continuously monitor changes to Polish tax laws, labor laws, and statutory requirements.
• Conduct regular payroll audits to maintain up-to-date processes and guarantee accurate results.
• Provide ongoing payroll training for staff, covering processes specific to Poland and any other international locations where you hire.

Your options for payroll services in Poland

There are three ways you can hire and pay employees in Poland:

• Set up a local entity: Setting up a local entity is the most robust (but also the most expensive and time-consuming) choice, allowing you to hire employees directly and operate as a normal business in Portugal. This isn’t the best option for smaller businesses or companies that want to hire across many different countries.
• Hire independent contractors: Hiring independent contractors can be a good option for project-based work, but you have to be careful not to treat contractors as employees. Misclassifying employees may lead to penalties and fines. 
• Work with Payoneer Workforce Management: Payoneer Workforce Management helps streamline onboarding, employment contracts, payroll, benefits, taxes, leave policies, and more.

Managing Poland’s payroll for each employee across multiple roles can be especially challenging.

To simplify operations, consider partnering with Payoneer Workforce Management. With in-country expertise, Payoneer Workforce Management helps streamline payroll processing while helping reduce administrative risks.

Book a demo today.

FAQs

1) What are the payroll rules in Poland?
The Labor Code governs payroll in Poland and includes strict rules for salary calculation, tax withholdings, and social contributions. Employers must withhold personal income tax and employee insurance, while also contributing to pension, disability, accident insurance, and labor funds. Most companies choose payroll services in Poland to manage these obligations efficiently and stay aligned with legal requirements.

2) How is salary paid in Poland?
Salaries are typically paid monthly via bank transfer in Polish złoty (PLN). Employers must provide employees with a payslip that outlines their gross pay, deductions, and net earnings. Payroll processing in Poland must also include timely registration with the Social Insurance Institution (ZUS) and tax authorities for accurate withholding and reporting.
3) How much should I pay as an employer in Poland?
It depends on the industry, region, role, and required qualifications. However, beyond the employee’s gross salary, employers are responsible for additional costs that cover payroll tax in Poland and mandatory contributions.