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EMPLOYMENT COST IN POLAND


Introduction

A person employed on the basis of an employment contract (Polish: Umowa o pracę), is automatically covered by a national insurance system (called in Poland: ZUS); his/her employer, who pays the salary or wages, is obliged to calculate and pay National Insurance premium. However, a part of the premium is paid by an employee; the amount of this part is also calculated by the employer then deducted from the salary/wages and paid to the N.I. bank account.

Premium (dues) paid by employees, up to 22,71% of the salary/wages
- Obligatory retirement insurance 9.76%
- Obligatory disability insurance 1.5%
- Obligatory sickness fund 2.45%
- Obligatory medical insurance 9%

Premium (dues) paid by employers, up to 20,61% of the salary/wages
- Obligatory retirement insurance 9.76%
- Obligatory disability insurance 6.5%
- Obligatory accident insurance 1.80% (the percentage depends on the type of activity)
- Work Fund  2.45%
- Work Benefit Fund 0.1%

Total percentage of the National Insurance premium (paid by both employer and employee) does amount to 43.32% of employee's salary/wages.

Average remuneration paid to employees in November 2015:
Currency (PLN):          Net: 3,048.82         Gross: 4,280.00
(EUR):                        Net: 715.43            Gross: 1,004.34

(according to average rate of exchange of the National Bank of Poland)

The lowest monthly remuneration for work on the basis of a full-time employment contract is PLN 1,850.00 in the year 2016.

Example of monthly salary/wages and N.I. deductions from the average gross pay (PLN 4,280.00):
Gross pay:        PLN 4,280.00

N.I. premium paid by employer (20.61%):                    PLN     882.11
Total amount paid by employer:

(Salary/wages + N.I. premium)                                    PLN   5,162.11
Dues paid by employee:
N.I. Premium 13.71%                                                PLN   -586.79
Medical insurance premium 9%                                    PLN   -332.39
Tax (Under-threshold,18%)                                        PLN   -598.43
Net salary/wages paid to employee:                       PLN   3,048.82

Individual income tax scale in Poland in the year 2016
All revenues and other-type income are taken into account for calculation of due taxes. There are two tax groups in Poland. An annual income of an employee mens a sum (total amount) of his/here gross salary or wages earned during the calendar year decreased by National Insurance and medical dues; if he/she earns also money for other jobs (contracts other then an employment one), this remuneration is added to his/her salary/wages for calculation of a tax amount.

The tax threshold is PLN 85,528.00 per annum.

The tax amount to be paid in case of revenues up to the tax threshold is 18% of all revenues less PLN 556.02.
The tax amount to be paid in case of revenues exceeding the tax threshold is:
PLN 14,839.02 (which is the tax amount of the under-threshold income: 18% less 536.02) + 32% of a surplus above the tax threshold (PLN 85,528).

Example calculation of an annual income tax:
Annual income of an employee: PLN 100,000.00

1. Under-threshold tax base: PLN 85,528.00
Tax due is PLN 14,839.00

(18% less 556.02)
2.  Above-threshold tax base:
PLN 100,000.00 – 85,528.00 = 14,472.00
Tax due is 4,631.04

(32% of the above-threshold tax base)
3.  Total tax due:
PLN 14,839.00 + 4.631,04 = 19,470.04

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