Social security contributions, which both employers and employees contribute to, are approximately 35% of an employee's salary. While individual caps are in place, the employer portion is between 19.21% and 22.14% of the employee's gross pay.
The employer contribution includes accident insurance, whose amount varies based on employee count and the business sector.
The pension and disability contributions are capped at salaries of 177,660zł (2022). Beyond this amount, the employer does not pay any contributions.
Employees' contributions are withheld and remitted by the employer to the Social Security Authorities (ZUS) alongside their contribution.
|Pensions & disability insurance||16.26% of the total gross salary (up to the cap of 157,770zł in 2021)|
|Accident insurance||1.67% of total gross salary for employers that employ up to nine employees. 0.67% to 3.33% of total gross salary for employers that employ more than nine employees (the precise rate depends on the business sector). Foreign employers pay a flat rate of 1.67%.|
|Labour Fund||2.45% of the total gross salary|
|Employee Guaranteed Benefits Fund||0.10% of the total gross salary|
|Solidarity Fund for Support of Disabled Persons||The product of 40.65% of the average salary and the number of employees corresponding to the difference between the employment ensuring the achievement of an employment indicator for disabled persons of 6% and the actual employment of disabled persons. Entrepreneurs who employ at least 25 people full-time and at the same time do not achieve the minimum 6% employment indicator for disabled people are obliged to pay that contributions.|
PPK is a mandatory employee long-term retirement savings program financed jointly by the employee, the employer and the government and operated by a third party financial institution.
The employer pays a basic contribution of 1.5% of the gross salary to each participating employee. Employers can opt for an additional contribution of up to 2.5% extra. There are no caps.
The employer should also calculate, deduct and submit the employee contribution to the financial institution which operates PPK.
Only employees make health insurance contributions in Poland. However, when the employer runs payroll, they should calculate, deduct and submit the employees' contribution on their behalf.
Residents of Poland are subject to tax on their worldwide income, whereas non-residents are subject only to tax on the income generated within the country. To be considered a resident, an individual must spend more than 183 days a year in Poland and/or base their personal or economic interests in Poland.
|GROSS INCOME||PROGRESSIVE TAX RATE (%)|
|Up to 120,000zł||12% (minus amount decreasing tax)|
Employed individuals under 26 years of age are exempt from tax on income up to 85,528zł per year.
All Polish residents who earn more than 1 million zł are subject to a solidarity tax of 4% on the excess.
Employees pay 13.71% of gross salary for social security.
The employer withholds the employee contributions and remits them alongside their contribution.
|Pensions and disability insurance||14,020|
|Sickness insurance||2.45% of total gross salary|
Employees must make a 9.76% healthcare contribution, partly tax-deductible (and is collected and remitted by the employer).
Up to 7.75% of the contribution can be deducted from tax. The remaining part of the healthcare contribution (1.25% of the assessment basis) is a non-deductible cost, which decreases the after-tax income.
PPK is voluntary for employees. However, if they are between 19 and 54 years of age, they are enrolled in PPK by default, which they can opt-out of. If employees are between 55 and 69 years of age, they must apply to join. Employees over 70 years of age cannot join PPK.
The basic employee contribution is 2% of gross remuneration. The employee may opt for an additional contribution of up to 2% of their gross salary.
For 2022, there is a personal allowance (amount decreasing tax) for all taxpayers whose annual income does not exceed 120,001zł. This allowance is a credit against PIT (not a deduction from the taxable base), and it amounts 3600zł. Tax-free amount in 2022 is 30,000zł.
Furthermore, the annual income tax due for 2021 can be reduced by:
If a child was only partially in the custody of the individual, the allowance is proportionally lowered.
The following employment expenses are tax-exempt:
Individuals can deduct donations from their gross income, subject to many conditions and an a cap of 6% of taxable income.
Disabled taxpayers or taxpayer supporting a disabled individual can deduct expenses for rehabilitation and costs related to facilitating life activities. Examples include adaptation to and equipping of apartments, residential buildings, motor vehicles to meet disability needs; purchasing and repairing personal equipment, appliances, and technical instruments necessary for rehabilitation or facilitating life activities, according to the disability needs. The only exception is household equipment. Taxpayers should document all expenses.
Social security contributions by employees can be deducted up to specified limits.
Under some conditions, it is possible to deduct compulsory social security contributions from taxable income if paid in another EU or European Economic Area (EEA) member state or in Switzerland.
Since 2020, there was a two-fold increase in deductible costs for employees. Monthly deductible expenses increased from 111.25zł to 250zł per month. This is a standard deduction for employees. The annual limit of tax costs cannot exceed 3,000zł. If obtaining income from more than one employment relationship, the upper limit of costs increased to 4,500zł.
The limit of the deduction is 120,000zł per annum.