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. €40,000 per year, and between 3 and 7% on income above this level. Employee contributions are approx. 14% of income up to the cap, and 2.5% thereafter. In addition, there is a 9% employee health insurance charge, with no cap.
A new ‘Employee Capital Plan’ has been introduced, which is a mandatory log term retirement savings programme. Employers pay a basic contribution of 1.5% of total earnings for each employee.
Treaties
Poland has social security agreements with all European Economic Area countries and 8 non EEA countries, including the US and Canada. These agreements determine which country has the right the levy social security contributions, has the obligation to provide benefits, and prevent social security being levied twice on the same income. Most inbounds 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.
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.
Social security insights are intended to provide quick and straightforward insights into social security regimes. Always seek professional advice based on actual circumstances before acting.
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