How to hire employees in Poland through an Employer of Record (EOR) [2023 Guide]

Hiring employees in Poland? Foreign employers keen on tapping into the country’s skilled workforce can start by hiring Polish contractors and sending international payments. But if you want to expand and hire full-time employees, you’ll need to establish a legal entity or hire through an EOR. 

Registering a legal entity can take months. Once established, it requires knowledge of complex Polish and EU employment laws. Any misstep can incur fines and legal action from Poland’s National Labour Inspectorate, which enforces the Polish labor code. This covers areas like working hours and the working week, remuneration, working conditions, holidays, time off, annual leave, termination, and more.

Alternatively, you can use an “Employer of Record” (EOR), which handles Polish payroll, tax, and compliance considerations.

Here’s a step-by-step guide for hiring through an EOR in Poland.

Step by step: How to hire through an Employer of Record in Poland

Step #1: Decide between a Polish EOR and a legal entity

Should you hire Polish employees through an EOR, or set up your own entity? This depends on your company’s resources, size, and plans to scale. 

• Legal entity in Poland. Setting up a legal entity from scratch usually requires registration with local authorities, opening a local bank account, and consulting with local experts to ensure compliance with Polish tax and labor laws including the Polish Social Insurance Institution. Poland’s National Labour Inspectorate takes all labor complaints seriously. There are many steps in this process and mistakes can result in delays to get up and running. 
• Polish EOR. An EOR is a third-party service that operates as an employer on a company’s behalf—meaning you don’t need to set up your own entity. As well as allowing you to hire full-time Polish employees, a Polish employer of record service can handle all the legal requirements for complying with EU and Polish laws for payroll, term contracts, and benefits. EOR services also include calculating and withholding taxes at the correct tax rate, onboarding and managing employees, and running payroll.

In 2023, there were several amendments to the labor code including areas like remote work, sobriety control, new leave types, and parental privileges. Familiarity with the National Health Fund and the Polish Social Insurance Institution (ZUS) is important as well. ZUS regulates benefits through a number of laws and regulations. It covers many entitlements including sickness and weeks of maternity leave, long-term incapacity for work, old-age pension, work accident coverage, and more.

Step #2: How to choose the best EOR for your business

Before you choose a platform, you should consider the services you will need, and how much you plan to grow your global hiring presence.

• Is the EOR active in the countries in which you need to hire? The first, and perhaps most obvious consideration when choosing an EOR for global expansion.
• Does the EOR own its own entities in the countries it services? If the EOR does not own the entities, it means they are partnering with a local or third-party provider.
• How does the EOR protect your sensitive and confidential information? It is vital that your EOR has the appropriate data protections in place, as well as secure technology that eliminates potential disclosures of private information.
• Does the EOR offer automated solutions? You may want to look for an EOR that automates the busy work like onboarding and benefits enrollment and other common HR and IT tasks.
• What is the EOR’s support model? It’s essential that your EOR has support staff that are both easy to contact and experts in the regulations of the countries in which you are hiring.

Get the full checklist in our guide: What is an EOR?

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Step #3: How to hire and onboard your Polish employees

Once you’ve picked an EOR that works in Poland, you can begin the onboarding process by collecting the following information from your new employees:

• Name (matching the account where you’ll deposit their pay).
• Date of birth and date of hire.
• Contact information, including their mailing address in Poland.
• PESEL personal ID number.
• NIP tax identification number. 
• Bank account information.
• Amount to be paid in Polish złoty (PLN).
• ZUS ZUA: Form used to register for social security benefits. 
• ZUS ZZA: Form for state health care benefits. 
• ZUS ZCNA: Healthcare for family members of workers or self-employed persons. 
• Polish healthcare card (karty ubezpieczenia zdrowotnego or KUZ) information.
• Medical exam.
• Note that EU/EEA citizens don’t require a work permit for Poland.

Next, you need to send out an employment agreement that outlines key working conditions such as type of work, position, location of work, hours, compensation, date work starts, and probation or trial period. The Polish labor code requires employers to inform new hires about the rights and obligations of both parties (the employment relationship), remuneration, probation period, and so on.

An EOR can automatically localize and distribute employment agreements. Every Polish hire will have a legally compliant contract offering statutory requirements for probationary periods, working hours, minimum wage, benefits, and termination policies like severance pay and notice periods. 

You can onboard new hires anywhere, end to end, with Rippling. Request a demo today.

Step #4: Run payroll

For the A-to-Z on global employment and payroll, read our comprehensive guide to running international payroll for employees in Poland.

Once you’ve collected a new hire’s information and both parties have signed employment agreements, an EOR will pay your Polish employees in złoty (PLN), while withholding legally required taxes from salaries. This includes contributions to:

• Social security and retirement plans.
• Health insurance.
• Accident insurance.
• Other voluntary entitlements (company pension plan).

In Poland, it is customary to issue employees with a monthly payslip, which may be either in paper format or digital.

Frequently asked questions about hiring through an EOR in Poland

How much does an EOR cost?

EORs typically use one of two pricing structures:

• Fixed monthly fee per employee
• Percentage of payroll plus applicable taxes

Both methods can also come with various administrative fees, onboarding charges, and other costs for supplemental features. 

Keep in mind that you don’t need to use an EOR for your entire workforce. If you want to segment its use, you’ll only be charged for the employees you employ through the EOR.

What is the difference between an EOR and PEO?

A Professional Employer Organization (PEO) co-employs a company’s workforce and provides administrative services like paying employees, handling compliance, and filing payroll taxes. The company and PEO are jointly responsible for the workforce. PEO services do not, however, allow you to hire in other countries where you haven’t set up a local entity. 

An EOR, on the other hand, is the sole employer of the portion of your workforce you use it for, assuming all the associated liabilities. An EOR allows companies to work with employees in other countries without setting up a legal entity.

Does an EOR protect your sensitive and confidential information?

While outsourcing your payroll management to an EOR can spare you time and compliance risk, sharing your data with companies who use third-party vendors leaves you exposed to data breaches from manual uploads. In Poland, data protection is covered by European Union law, the General Data Protection Regulation (GDPR). The Polish Personal Data Protection Office (UODO) investigates complaints and has fined a number of companies. In 2022, UODO issued a fine of EUR 1,000,000 (USD 1,098,950) for a data breach. Penalties can be as high as EUR 20,000,000 (USD 21,979,300).

You should seek out EORs that prioritize data protection, including:

• Compliance with industry-standard privacy regulations in different countries.
• Secure infrastructure with around-the-clock maintenance.
• Carefully vetted personnel.

You can also establish a Data Processing Agreement (DPA) with a payroll service that mandates sound privacy practices and provides legal protection. 

Thinking of setting up your own business entity? According to the World Bank, it takes an average of 37 days to do so in Poland.

Does an EOR help with Polish tax filings?

An EOR can automatically calculate and file your employer taxes in Poland. It can also provide employees with official records of their net and gross income, tax deducted, benefits, and other contributions. For businesses, an EOR can submit documentation covering: 

• Employment income.
• Taxable benefits.
• Income tax deducted.
• Other required deductions from gross income. 

What are the mandatory benefits for Polish employees?

Mandatory employee benefits in Poland are:

• Pension insurance.
• Disability insurance.
• Work accident insurance.
• Employment Capital Plan (PKK) retirement savings plan.
• Occupational health and safety training and medical examinations.
• Sick leave.
• Holiday entitlements.
• Statutory or public holidays (Christmas, New Year’s Day, Constitution Day, Independence Day, etc).
• Parental leave (including paternity leave and maternity leave).

For more information on mandatory benefits in Poland, read our complete guide.

What are the employer costs for full-time employees in Poland?

In addition to taxes, employers are responsible for deducting the following from their full-time employees’ paychecks. These are the employer contributions (but bear in mind though that deductions may change in accordance with new Polish labor laws):

Employers also pay employees for statutory holidays (there are 13) and annual leave. 

Rippling helps you hire, pay, and manage people worldwide. Request a demo today.

Rippling and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.