Detailed Guide to Employee Benefits and Compensation in Poland

Employee benefits denote the perks employers provide to their employees on top of the salary offered. These benefits help companies bring in new employees, retain a proficient workforce and enhance employee productivity. These benefits and compensation provided to employees are either monetary or non-monetary based on the employees’ requirements and the company’s financial resources.

The employment contracts define certain mandatory benefits to which every employee in Poland is entitled. Such benefits incorporate statutory minimum wage, working hours, overtime payment, annual leave, paid leave, sickness benefits, maternity leave, paternity leave, severance fund, retirement benefit, disability pension, and more.

Compensation Laws in Poland

Various compensation laws in Poland oversee employee benefits in the country. They are discussed below:

1. The Polish Labour Code:

• The Polish labor code ensures that pregnant women are not fired and can’t work at night, overtime, in the shift-type system, or outside the permanent workplace without their prior consent. 
• It specifies that the minimum compensation of at least 25% of the monthly wage must be provided to an employee for nonparticipation in competitive activities after the employment termination. 

2. Polish Labour Law:

• It covers supplementary pension schemes for employees. 
• It also defines Remuneration Rules that specify wages of a specific group of employees, bonuses, remuneration for night shift work, and a reasonable remuneration system suitable for a specified employer.

How to Design an Employee Benefits Program for Employees in Poland?

It is imperative to consider a few vital considerations before designing a compensation package in Poland, which are as follows:

Step 1: Stipulate your business objectives and budget

To make the most of your compensation policy, the first step is to stipulate the objectives you anticipate from the compensation structure in Poland.

Investigate employment contracts or collective bargaining agreements to authenticate employment relationships and employees’ right to benefits. You should also evaluate your company’s financial resources to capitalize on employee benefits. Before designing the benefits policy in Poland, focus on the company’s capability, commercial climate, and the economic segment in which it operates.

Step 2: Deduce employee requirements

You must deduce the employees’ requirements and expectations by organizing interviews or use cases with them or sending questionnaires. This approach inspires the employees to share their opinions assertively.

Thoroughly research the prevailing industry standards and the benefits your competitors offer their employees. The corresponding research outcomes and internal survey can be used to create an all-inclusive compensation and benefits policy in Poland that follows industry principles and market competition.

The internal survey stipulates the areas that need improvements and denotes necessary changes to be covered in the compensation and benefits policy in Poland. You can dismiss certain superfluous benefits and reduce company expenses.

Step 3: Design your benefits plan

After discovering the employees’ needs and expectations, you must employ a gap analysis to assess the prevailing scenario of the benefits plan. Develop a flexible benefits plan that follows the volatile nature of business. Furthermore, the flexible benefits framework lets the employees easily select the obligatory benefits. It also advises the employer to obtain the maximum benefits from it.

You must cover the aspects like employee contributions, the company’s budget, and outsourcing requirements while developing a benefits plan for worker’s compensation in Poland.

Step 4: Inform the stakeholders of the benefits and gain feedback

Inform all the employees and stakeholders about your benefits plan’s advantages. They can send feedback after you convey the plan’s draft. Subsequently, you can employ a worthwhile plan for the workforce and the organization.

If you discern any helpful feedback, you can assimilate them into your compensation policy. On the other hand, if the feedback specifies any benefit as unnecessary, you can amend the employee benefits in Poland.

Step 5: Regularly analyze the plan

Companies in Poland intend to offer the finest benefits to their employees to strengthen their competitive advantage in the market. So, you must regularly study the compensation structure in Poland. It also helps you figure out the benefits plan’s viability and efficiency.

Ensure there are zero errors before implementing the employee compensation policy in Poland. You must carefully assess all the benefit plan’s elements and execute them consequently.

Types of Guaranteed Benefits in Poland

Employers provide various types of employee benefits in Poland to their employees. Many of these benefits are mandatory and are discussed below:

Minimum wage

• The minimum monthly wage in Poland is 3490 PLN per month.

Working hours and overtime

• The standard working hours in Poland are 8 hours daily and 40 hours weekly.
•  The work that surpasses the standard working hours is compensated as overtime. The annual overtime can’t exceed 150 hours. 
• The following table shows the employees’ compensation for their overtime working hours.

Paid leaves

• The employees in Poland are entitled to paid annual leave of 20-26 days (depending on their work experience).
• The following table shows the number of paid leaves provided to employees based on their work experience.

• Employees who begin working under a contract of employment are entitled to 1/12th of the holiday entitlement after finishing each month of employment (in the calendar year in which employment has begun).
• The employees can transfer their unused annual leave days to the following year. However, they must be taken before September 30 of the following year.
• The employees can’t be paid for not taking their leave, except for employment termination.

Public holidays

• The employees in Poland get 13 public holidays per year. 

Sick leaves

• Sick leave is compensated at either 80.00% of the allowance (if the illness happens during pregnancy) or 100.00% of the allowance (if an accident on the path to the workplace caused the illness).
• The following table shows the number of sick leaves provided to employees based on age.

Maternity leaves

• The following table shows the number of maternity leaves female employees receive based on the number of children (born/ adopted):

The Social Security Institute handles all maternity pay at 100% of the employee’s standard salary rate.

Paternity leaves

• Two weeks of paid paternity leave is provided to fathers in Poland.
• It is offered within 24 months after the child’s birth or from the date of adoption. The child’s age should be less than seven years.
• Employees can take the leave in up to two installments (one week each).
• Social Security pays the paternity leave at 100.00% of the employee’s standard salary rate.

Parental leave

• Employees can get up to 32 weeks of parental leave in Poland.
• It is offered to both female and male employees and adoptive parents after finishing maternity leave. 
• The employer pays 100.00% of the employee’s standard salary rate for the first six weeks.
• Social Security pays at 60.00% of the employee’s standard salary rate after that.

Severance pay

• The employees in Poland get severance pay as follows:

Disability leave

• An employee facing a moderate or severe degree of disability is entitled to an extra 10 days of annual leave.

Disability pension

• The state insurance pays for short-term disability, which covers up to 180 days a year.

Employee capital plans (PPK)

• The employer compensates a primary contribution of 1.5% of the employee’s gross pay.

Special event leave

• Employees get two days of paid leave for attending a close family member’s life events like a child’s birth, wedding, or funeral.

Childcare leave

• An employee raising a minimum of one child (aged up to 14 years) can get two paid days off per year.

Employee Benefits for Expatriates

Foreign employees in Poland are eligible for the same benefits as local employees. Throughout their employment in Poland, the ex-pats are entitled to benefits like health care insurance, family allowance, child home care allowance, dental care, meal allowance, travel allowance, and unemployment benefits for their employment.

Expats recurrently move abroad to accomplish their short-term projects. Hence, businesses implement a straightforward, economical alternative to recruiting and compensating ex-pats via local subsidiaries.

In Poland, the work permits for ex-pats are provided by the province governor (voivode or wojewoda). They apply to the employer’s registered office.

How are Employee Benefits Taxed in Poland?

In Poland, employees must pay income tax from 0% to 32% (based on income). The tax residents should pay for their worldwide income. The non-residents only pay for their income acquired from Poland. Moreover, self-employed individuals should pay contributions for pension, disability, and general sickness.

All employees and employers in Poland should make the below contributions from their monthly salary: 

Restrictions for Poland Benefits and Compensation

Most benefits provided to employees in Poland are taxable. Hence, you must be acquainted with the benefits’ financial value to compute the tax amount payable by the employer precisely. Moreover, an employer must ensure that all tax payments are timely cleared and conveyed to the corresponding authorities.

Ensure your business is incorporated in Poland and legitimately operates before designing employee benefits plans. The companies must also pay the minimum remunerations to the employees depending on their sectors. Besides, the benefits and compensation package in Poland must abide by all the labor laws controlled by the government.

No nationality restrictions are imposed for company directors and managers under Polish law. Foreign nationals willing to work legally in Poland must obtain a work permit. But the citizens of the EU and certain other countries like Switzerland, Ireland, Norway, and Lichtenstein are exempted from this obligation.

The parties involved in an employment contract can sign a non-competition agreement. In this agreement, the employee can agree not to conduct competitive activities during employment or for a decided period after termination. An employee can move into another employment relationship during service, except for the employment contract that states otherwise. Any restrictions on an employee’s future employment are unacceptable.

Supplemental Benefits for Employees in Poland

Here are some additional benefits provided to employees in Poland.

• Supplementary group life insurance: Under the “voluntary” scheme of group life insurance, the employer covers the employees’ insurance, which is deducted from their salary.
• Supplementary private medical insurance: Most companies in Poland provide this benefit to facilitate decent quality medical facilities with a small waiting period.
• Business travel insurance: Most companies in Poland provide business travel insurance. As per Polish law, the companies who delegate employees abroad have to cover the medical treatment cost (including costs of transportation and medicines) that occur abroad.
• Cost-effective benefits packages: They include employer-sponsored gym memberships, more paid time off, meal vouchers, travel expenses, and stock options/profit-sharing. It also includes training, education, health cash benefits, social assistance benefits, surviving spouse benefit, surviving children benefit, orphan benefit, dependent parent benefit, etc. 

How Multiplier Can Help with Benefits Management in Poland

Establishing a business abroad and job hiring a skilled workforce can be time-consuming and challenging. The employer must abide by the local laws and regulations before formulating employment contracts and finalizing employee benefits. You can systematize this process by contacting a global PEO platform like Multiplier.

Multiplier streamlines compliance with Poland’s labor rules. Also, we assist you with hiring proficient employees. Our skillful staff can support you in effectively handling the workforce without establishing a subsidiary in the country. Therefore, you can minimize your employment expenses and study new markets.