Running Payroll in Poland

Poland’s payroll framework is often perceived as relatively simple due to its two-tier income tax system and standardized social security contribution rates. However, recent legislative reforms—most notably the Polish Deal (Polski Ład), introduced in January 2022—have significantly increased the complexity of payroll compliance.

These changes have impacted key areas such as health insurance contributions, tax deductions, and income calculation methods, requiring employers to stay up to date with evolving rules and ensure accurate implementation in payroll systems.

Employers must navigate a broad range of reporting and filing obligations across multiple authorities, including the Social Insurance Institution (ZUS) and the tax administration. In this context, a precise understanding of current legislation and procedural requirements is essential for maintaining compliance and avoiding costly errors.

Foreign employers are not legally required to establish a local legal entity to employ staff in Poland. However, prior to processing payroll, they must register with the Polish tax authorities to obtain a Tax Identification Number (NIP), followed by registration with the Social Insurance Institution (ZUS).

Registration with ZUS is completed using the ZUS ZPA form and must be filed within seven days of hiring the first employee, in accordance with the Act of 13 October 1998 on the Social Security System. This process can be handled by a legal representative or a local payroll provider.

Employee registration must also be completed within seven days from the start date stated in the employment contract. Employers must submit a ZUS ZUA (or ZZA, depending on the insurance scope) form via the government’s Platnik software. Platnik is a free, mandatory system for ongoing social security filings and must be used for all registration and monthly reporting activities.

If a company employs 25 or more full-time workers, it must register and contribute to the PFRON (State Fund for the Rehabilitation of Disabled Persons). Registration is completed by submitting forms DEK-Z and ZAP1 in hard copy, signed by an authorized representative listed in the company’s National Court Register (KRS). Employers that maintain a workforce of at least 6% disabled employees are exempt from these contributions.

Companies choosing to incorporate in Poland are registered with the KRS, and as part of that process, they are automatically registered with the tax authorities—no separate payroll tax registration is required.

Both employers and employees in Poland are required to make social security contributions. Employers must also manage a range of withholding and reporting obligations related to income tax and social security. These responsibilities involve multiple authorities and come with varying deadlines.

Tax Considerations

Poland’s personal income tax system is structured around two progressive tax rates. As of 2025, the base rate is 12%, applicable to annual income up to PLN 120,000, while income exceeding this threshold is taxed at 32%. Additionally, a solidarity surcharge of 4% applies to annual income exceeding PLN 1,000,000.

A tax-free allowance of PLN 30,000 per year remains in effect, reducing the effective tax burden for most employees. Several additional deductions and tax credits may apply depending on individual circumstances, such as deductions for children or the standard employment income relief.

Benefits in kind are generally considered taxable income. Social security contributions are deductible from taxable income, with the exception of healthcare contributions, which—following the tax reforms under the Polish Deal—are no longer deductible.

Tax residency in Poland is determined either by spending more than 183 days in a calendar year in the country or by having one’s center of personal or economic interests located in Poland. Residents are subject to taxation on their worldwide income, while non-residents are taxed only on income sourced within Poland. There are no additional municipal or regional income taxes in Poland.

Tax Withholding and Reporting

Employers in Poland are responsible for calculating and withholding income tax from their employees' salaries on a monthly basis. These withheld amounts are remitted to the tax authorities as advance payments towards the employees' annual tax liabilities.​

Each employee has an individual tax micro-account, identified by their PESEL number (or NIP for non-residents), to which the employer must transfer the withheld tax. Payments should be made by the 20th day of the month following the month in which the salary was paid.​

Employers are not required to submit monthly tax returns for PIT. Instead, they must file an annual summary return, known as PIT-4R, by January 31 of the year following the tax year. Additionally, employers must provide each employee with an individual annual tax statement, PIT-11, by the same deadline. This statement must also be submitted to the tax authorities.

The tax year in Poland aligns with the calendar year, running from January 1 to December 31.

Social Security Contributions

Social security contributions in Poland are shared between the employer and the employee, with the employer covering the larger portion. The system is administered by the Social Insurance Institution (ZUS) and funds several branches of the national insurance system, including retirement, disability, sickness, and work accident insurance.

As of 2025, employers contribute between 19.21% and 22.41% of an employee’s gross salary, depending on their work accident insurance rate. Employees contribute 13.71%, not including health insurance. Pension and disability insurance contributions are subject to an annual income cap set at 30 times the projected national average salary, which for 2025 is PLN 260,190.

The work accident insurance rate depends on the size of the business and its risk category. Employers with fewer than nine employees (including foreign entities without a permanent establishment) pay a flat rate of 1.67%, while those with nine or more employees contribute at a rate ranging from 0.67% to 3.33%, based on their industry classification.

In addition to the standard social insurance contributions, employees must contribute 9% of their gross salary toward health insurance, which is not tax-deductible. This contribution is withheld by the employer and paid to ZUS. Employers are also required to contribute to the Labour Fund and the Guaranteed Employee Benefits Fund, which provide unemployment protection and wage guarantees in cases of insolvency.

Furthermore, under the Employee Capital Plans (Pracownicze Plany Kapitałowe, PPK) scheme, most employers must offer an additional retirement savings plan. Employers contribute 1.5% of the employee’s gross salary (with the option to increase up to 4%), while employees contribute 2%, unless they choose to opt out.

It is the employer’s responsibility to calculate and withhold the employee's share of social security contributions and remit the full amount—including their own share—to ZUS by the 15th of the month following the pay period.

Employers must also submit a monthly social security report (ZUS DRA) summarizing the contributions due. Additionally, businesses meeting specific criteria—such as those employing more than 9 people—must file an annual accident insurance declaration (ZUS IWA) by 31 January of the following year. All submissions must be made electronically using the official Platnik software.

Companies employing 25 or more employees are also required to make monthly contributions to the State Fund for the Rehabilitation of Disabled Persons (PFRON). Contribution rates vary and are reviewed quarterly. Employers must file a monthly declaration via a dedicated electronic system, with payments due by the 20th of the following month. The annual PFRON declaration is due by 20 January of the following year.

Employees in Poland are entitled to various statutory benefits. These include:

• Annual leave and public holidays: minimum 20 days (increasing to 26 days after 10 years of service), plus 13 public holidays

• Maternity leave: 20 weeks (extendable to up to 37 weeks in case of multiple births)

• Paternity leave: 2 weeks 

• Parental leave: up to 32 weeks for both parents on statutory parental leave allowance

• Sick leave: 33 days within one calendar year (14 days for employee over 50) paid by the employer, afterwards employees receive statutory sickness benefits

For more information on employee benefits and other employment requirements in Poland (including severance pay and termination procedures), check out our Global Hiring Guide.

​As of January 1, 2025, Poland's national minimum wage is set at PLN 4,666 per month and PLN 30.50 per hour. Overtime compensation varies: employees receive an additional 100% of their regular pay for overtime work performed at night, on Sundays, or public holidays, and 50% extra for overtime on regular workdays. There is no legal requirement for employers in Poland to provide a 13th-month salary.

In Poland, employers are legally required to process payroll at least once a month. Employee remuneration must be disbursed no later than the 10th day of the month following the payroll period. Wages and salaries can be paid in any agreed currency.

There is no statutory obligation for employers in Poland to provide employees with monthly payslips. However, it is common practice to furnish employees with detailed salary statements, either in paper form or electronically, outlining the components of their remuneration and deductions.