Employees in Poland
After setting up a business in Poland you will probabely – sooner or later – look for employees in Poland. The first question while engaging your new stuff is pretty obvious: how much does it cost?
The system of taxes and social insurance in Poland in such a way that public contributions are paid both by the employer and by the employee. That is why you have to differentiate three different figures while talking about salary of your future employees in Poland.
This is exactly the amount that your employee will get on his or her bank account at the end of the month. It is also obviously the most important figure for his financial assessment of the work conditions offered to him by your company. Other benefits, even if more and more common and appreciated on the labor market in Poland, have still relatively little impact on the way Polish employees estimates their job offers. The net salary amount, however, doesn’t convey much information to you as the employer. You have to concentrate on the two other values.
The amount put into the contract of employment is gross salary. Again, it is not the cost of employment (although many employees misunderstand it in this way) that your company will have to deal with. It contains:
- the employee’s net salary
- all contributions for social insurance paid by the employee as well as
- income tax on the salary (PIT = personal income tax)
This figure is mostly used in statistics, official papers, public discussions as well as (usually) in negotiations between the employer and the employees in Poland. No wonder, it stands halfway between the employee-oriented “net salary” and the employer-oriented “salary cost”.
Most important for each manager that plans to increase his team is the salary cost. It consists of the gross salary (mentioned above) plus the social insurance contributions that are to be paid by the company itself. This “employer’s ZUS” is some 20% of the gross salary, so you can calculate the salary cost for the company by rule of thumb as 120% of the gross salary put into the employment contract.
Here are the gross salary and the salary cost calculated for four different net salaries, so that you can get the picture:
- Net salary: 1355,69 pln, gross salary: 1850,00 pln (this is the minimum wage in Poland in 2016), salary cost: 2231,29 pln
- Net salary: 2000,00 pln, gross salary: 2774,96 pln, salary cost: 3346,88 pln
- Net salary: 3500,00 pln, gross salary: 4928,46 pln, salary cost: 5944,21 pln
- Net salary: 5000,00 pln, gross salary: 7080,65 pln, salary cost: 8539,97 pln