Non-Residential Payroll (NRP) in Poland
At Parakar, we understand that expanding your business into a new country involves navigating complex local regulations and employment laws. Poland is a fast-growing market with a skilled workforce and a strategic location in Europe, making it an attractive destination for many businesses. However, setting up a local legal entity in Poland can be time-consuming and costly, particularly if you only plan to hire a small number of employees.
In certain scenarios, the commonly used Employer of Record (EOR) model may not fully suit your business needs. Additionally, some employees prefer being directly employed by their ultimate employer rather than through a third-party labour leasing company. In this blog, we explore how Non-Residential Payroll (NRP) in Poland can offer a strategic solution for your business.
The strategic approach to Non-Residential Payroll (NRP)
Non-Residential Payroll (NRP) enables foreign employers without a Polish entity to register directly with Polish authorities and employ workers in Poland while remaining compliant with Polish tax and social security regulations.
Through an NRP arrangement, employers register with:
- ZUS (Zakład Ubezpieczeń Społecznych) for social security contributions
- Urząd Skarbowy (Polish Tax Office) for income tax (PIT) withholding and reporting
This allows you to pay Polish employees and fulfil statutory obligations without establishing a Polish company. NRP is particularly useful for businesses that want to test the Polish market or hire key individuals without committing to the full administrative and financial responsibilities of a local subsidiary.
The advantages of an NRP
- Streamlined registration process: Registering as a non-resident employer in Poland is generally faster than setting up a Polish company. You can typically complete the registration with ZUS and the Tax Office within a few weeks, allowing you to start employing staff sooner.
- Cost-efficiency: Setting up a local legal entity in Poland involves significant legal, accounting, and administrative costs, as well as ongoing compliance obligations. If you plan to employ only a few workers, NRP offers a cost-effective alternative that minimizes your financial exposure.
- Direct employment: With NRP, your parent company directly employs the workers in Poland. This arrangement provides greater transparency and builds stronger relationships between you and your employees, which can also make job offers more appealing to local talent.
The limitations of an NRP
- Polish bank account requirements: To process payroll and pay taxes and social security contributions, a Polish bank account may be required. Opening an account as a foreign employer can be complex, but Parakar can assist you throughout the process and manage payroll on your behalf.
- Compliance with Polish labour and tax rules: Even under NRP, employers must comply with Polish employment law, including rules on:
- Working hours and overtime
- Minimum wage (updated annually)
- Social security contributions and health insurance
- Tax deductions and PIT (Personal Income Tax) obligations
- Risk of permanent establishment: Employing people in Poland does not automatically create a permanent establishment (PE) for corporate tax purposes. However, if employees are authorised to negotiate or conclude contracts on behalf of your company, there is a potential risk of being classified as having a PE in Poland, which could lead to additional corporate tax obligations.
Why consider NRP in Poland?
Non-Residential Payroll (NRP) provides a practical and flexible way to manage payroll and employ staff in Poland without setting up a local entity. It enables you to:
- Hire top talent directly in Poland
- Remain fully compliant with Polish tax and employment laws
- Minimise the costs and complexities of establishing a subsidiary
- Test the Polish market before committing to a larger presence
At Parakar, we guide you through every step of the NRP process in Poland, from employer registration and payroll management to ensuring full compliance with ZUS and tax authorities. With our local expertise, you can focus on growing your business while we handle the complexities of operating in Poland.
Contact us today to learn how Non-Residential Payroll in Poland can support your business and employees.
Get in touch
