Hiring in Poland: A comprehensive guide for international businesses

The Polish economy maintains good dynamics, and the growth rate remains higher than analysts’ expectations. A rebound in investment and a gradual return to growth are becoming increasingly evident. After a period of slowdown, companies are increasing activity again, and the economy is finding a balance between caution and growth.

The labour market remains in good shape. Economic growth is translating into a gradual improvement in the labour market and maintaining relatively stable prices, providing a basis for more confident spending and investment planning.

Financial markets remain stable, and investor confidence in the Polish economy remains high. High foreign exchange reserves and capital inflows indicate solid foundations, allowing for a cautious outlook on the coming quarters.

Also, economic growth is translating into a gradual improvement in the labour market and maintaining relatively stable prices, providing a basis for more confident spending and investment planning. In 2026, economic growth should be at least as high as in 2025, with a better growth structure, the main driver will be investment, which economists estimate will increase by approximately 12 percent. This will fuel a further acceleration in GDP.

Poland’s dynamic economy presents significant opportunities for international businesses. The country offers a skilled workforce. Its strategic location in Central Europe is also a key advantage.

However, successfully hiring in Poland requires a deep understanding of local employment regulations. Navigating these rules ensures full compliance. This guide outlines the essential steps and considerations for foreign companies. Polish labour law aims to protect employees. It differs significantly from regulations in many other countries. Foreign employers must therefore understand these unique protections. This helps mitigate potential financial and operational risks.

Understanding Polish employment law essentials

Employment contracts: Key requirements

A written employment contract is mandatory in Poland. It must be in place before work begins. This contract defines the relationship between employer and employee. It must include several critical details.

• Job title and responsibilities: Clearly define the role and duties.
• Salary: Specify the gross remuneration. Include any bonuses or additional benefits.
• Work location: State the primary place of work.
• Working hours: Outline the standard working schedule.
• Termination terms: Detail notice periods and conditions for ending employment.
• Type of contract: Specify if it is an indefinite, fixed-term, or trial period contract.

The Polish Labour Code governs these contract types. It outlines specific rules for each. For instance, fixed-term contracts have limitations on duration and renewals. This prevents indefinite use of temporary agreements. Employers must ensure their contracts align with these provisions.

Probation periods and termination notices

Poland does not use a specific term for a “probation period” as such. It defines this period under a “trial period” contract. This contract typically lasts for three months. A separate employment contract follows the trial period. This new contract can be fixed-term or unlimited. Temporary contracts do not have a trial period.

Notice periods depend on the contract type and employee seniority. For a trial period contract, notice periods are shorter:

• Three working days for contracts under two weeks.
• One week for contracts between two weeks and three months.
• Two weeks for a full three-month trial period.

For fixed and permanent employment contracts, notice periods are:

• Two weeks for less than six months of employment.
• One month for six months to three years of employment.
• Three months for three years or more of employment.

Social security contributions and benefits

The Polish Social Security Authority (ZUS) manages social security contributions. Employer costs range from 19.21% to 22.14% of the employee’s gross salary. These contributions cover a range of benefits:

• Health insurance: Employees pay this contribution. The employer calculates, deducts, and submits it.
• Pension and retirement: Employees are automatically enrolled. Benefits include pension and disability.
• Accident insurance: Employer contribution. The amount varies based on employee count and business sector.
• Labour Fund: Employers contribute 2.45% of the gross salary. This funds unemployment insurance.
• Employee Guaranteed Benefits Fund (FGSP): Employer contributes 0.10% of the gross salary. This secures employee claims in case of employer insolvency.

Additionally, Employee Capital Plans (PPK) are a long-term retirement savings program. Both employees and employers contribute. The employer pays a basic contribution of 1.5% of the gross salary. Employees can opt in. The employer cannot refuse their participation.

Occupational health and safety

Polish law mandates strict occupational health and safety (OHS) standards. Employers must ensure a safe working environment. This includes providing initial health and safety training. It also involves ongoing adherence to safety provisions.

Medical examinations are also compulsory. Employees require initial, periodic, and follow-up checks. The employer covers these costs. Scheduling typically occurs during work hours. Employees cannot start work without a valid medical certificate. This certificate confirms fitness for the specific role.

Working hours and annual leave

The standard working week in Poland is 40 hours. This is typically spread over five days. Daily working hours are usually eight. Weekly working time, including overtime, must not exceed an average of 48 hours. This applies within the assumed settlement period. Overtime is limited to 150 hours per calendar year. Employees are entitled to at least 11 uninterrupted daily rest hours. They also receive a continuous weekly rest of at least 35 hours.

Annual leave entitlements depend on an employee’s employment record:

• 20 days: For those with less than ten years of service.
• 26 days: For those with at least ten years of service.

Navigating payroll and taxes in Poland

Understanding payroll and taxes Poland employer responsibilities is crucial. It ensures legal compliance and accurate compensation. Poland has a comprehensive system of deductions and contributions.

Mandatory contributions

As mentioned, employers make significant contributions to social security (ZUS). These range from 19.21% to 22.14% of the gross salary. They cover pension, disability, accident insurance, the Labour Fund, and FGSP. While employees pay health insurance, the employer processes these deductions. Employers also contribute to PPK for participating employees. The employee’s net salary then reflects these and other deductions. These include income tax calculated on the gross salary less social security contributions.

Tax registration for employers

Foreign employers must register with the Polish tax authorities. This is necessary if they establish a local entity. The registration process ensures proper handling of employee income tax. It also covers other relevant taxes. Employers are responsible for calculating, deducting, and remitting employee taxes. This includes personal income tax and social security contributions. Correct registration and ongoing reporting are essential. They prevent penalties and ensure legal operations.

Strategic options for hiring in Poland

International businesses have different avenues for hiring in Poland. The choice depends on their long-term strategy and risk appetite. Options range from establishing a local presence to leveraging third-party solutions.

Hire employees in Poland without entity: The NRP solution

This solution is extremely beneficial for foreign business owners, as the registration process and obtaining the required authorizations are extremely efficient. Registering as a foreign contribution payer (NRP – non-resident payer) in Poland, without establishing a company, is a solution often used by companies that want to legally employ employees in Poland but not conduct full business operations here. Here are the main advantages:

1. No need to establish a company in Poland: the biggest advantage is that you don’t need to establish a Polish entity (e.g., a limited liability company).

   This saves your time (no registration with the National Court Register) and reduces administrative and accounting costs. Furthermore, you are not required to maintain full accounting records in Poland (unless a taxable permanent establishment is established).

2. Legal employment of employees in Poland: you can hire employees in accordance with Polish labor law under an employment contract or a civil law contract.
3. Reduced tax liability in Poland: this means that in many cases, there is no obligation to pay CIT in Poland (unless a so-called “establishment” is established), taxation remains in the country of registration, and you only assume the obligations of paying contributions and PIT advances.
4. Operational simplicity: compared to running a company, NRP means significantly fewer ongoing formalities, no corporate obligations (management board, meetings, financial statements in Poland), and easier closure of a business in Poland.
5. Business flexibility: NRP is an excellent solution when you are testing the Polish market, employing a small team (e.g., IT, sales, support), and operating remotely without a physical presence (office).
6. No share capital requirement, which means you do not have to contribute capital as with a company (e.g., PLN 5,000 for a limited liability company).

Quick start: registering as a ZUS payer is usually faster than setting up a company:

• Shorter time to hire
• quick start of employment

Parakar can, of course, support you at every stage of this process – we can take care of everything remotely!

Hire employees in Poland without entity: The EOR solution

Many foreign companies prefer to hire employees in Poland without entity. An Employer of Record (EOR) provides an effective solution. An EOR legally employs staff on behalf of another company. It handles all HR, payroll, and compliance responsibilities. This includes adherence to Poland employment laws. It also manages social security contributions, tax withholdings, and employment contracts. The client company retains full control over daily management and tasks. It therefore avoids the complexities and costs of setting up a local entity.

Establishing a local entity

One traditional approach is to set up a local legal entity in Poland. This could be a limited liability company (Sp. z o.o.). It is particularly beneficial for higher incomes (over PLN 120,000-150,000 per year), when personal assets need to be protected from business risk, or when planning investments and hiring employees. It allows for optimization of social security contributions, offers a 9% corporate income tax rate for small businesses, and provides greater credibility. This option provides full control over operations. However, it involves significant administrative burdens. It requires registering with various authorities. These include the National Court Register (KRS) and tax offices. It also means managing local accounting, legal, and HR functions.

Hiring in Poland with Parakar

Successfully expanding into Poland requires careful planning and execution. Understanding the local legal framework is key. It ensures compliance and avoids potential pitfalls. Whether establishing a local entity or utilizing an EOR, informed decisions are key. Parakar stands as your trusted partner. We offer expert guidance and services. We simplify international HR and payroll complexities. We enable your seamless growth in Poland.