Summary

Poland has a comprehensive social security system that provides cover for pension, disability, work accidents, unemployment and sickness, as well as family and maternity benefits. The Health insurance system sits outside the social security system but participation is mandatory for those in employment.

Details

Contributions

Employers contribute between 19% and 23% on income up to approx. $76,000 per year, and between 3 and 7% on income above this level. Employee contributions are approx. 14% of income up to the cap (ie contributions of $10,400), and a 2.45% sickness insurance charge (on total income) thereafter. In addition, there is a 9% employee health insurance charge, with no cap.

Under the ‘Employee Capital Plan’ (PKK) , a mandatory long term and retirement savings programme, most employers are obliged to pay a basic contribution of 1.5% of total earnings for each employee. Employee contributions are 2% for most individuals.

Treaties

Poland has social security agreements with all European Economic Area countries and 8 non-EEA countries, including the UK, US, Australia and Canada. These agreements determine which country must levy social security contributions, provide benefits, and prevent social security being levied twice on the same income. Most inbound expatriates to Poland therefore continue to pay home country social security rather than Polish contributions.

Given the comparatively high cost of Polish social security, there is little incentive for employers to seek ways to pay Polish contributions rather than continue to pay home country contributions under an A1 certificate or a certificate of coverage. Most social security agreement provide for up to five years of home country coverage, although in the case of the UK, this is limited to two years. Special rules apply to individuals working in Poland and other EEA countries (plus the UK) on a regular basis.

For individuals moving to Poland from non-agreement countries, there is the possibility of a double social security charge.

Exemptions

Along with personal allowances reducing the amount of income subject to social security, child deductions are available and there is a reasonably broad range of deductible employment and personal expenses.

Administration

Various different state bodies oversee the different branches of social security in Poland, and its legislative framework is complicated. Full payroll filings, including for social security, are required every month.

Benefits

Contributing to the Polish social security system confers a full range of benefit and healthcare rights. Retirement benefits are available from 65 for men and 60 for women, with at least either 25 or 20 years of contributions.

Other

 The social security element of individual contributions (14%) are tax deductible.

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