Foreign companies are getting more interested in employing workers in Poland without having/creating a permanent establishment (PE) in Poland. This option is possible however each time the scope of work of a given employee shall be analyzed as even one employee may lead to creation of a permanent establishment in Poland.
Assuming there is no PE in Poland, when a foreign EU company employs an employee working in Poland, in accordance with that general rule, the employee’s social security contributions must be paid to the Polish insurance institution ZUS.
According to the general rule arising from Art. 11 section 1 of Regulation No. 883/2004 of the European Parliament, EU citizens are subject to the legislation of only one Member State. Additionally, Art. 11 section 3 of the Regulation states that the employee is subject to the legislation of the country in which the work is performed.
The foreign company does not always have to open a branch or a company in Poland to be the employer, however it has several important obligations in Poland when they want to employe anyone e.g.
- apply for a tax number in Poland
- register company as payer of social security contributions in ZUS;
- conclude a contract of employment – no later than the first day of work (the employment contract should be prepared in Polish language or bilingual e.g., Polish and English)
- issue a referral for a medical examination for the employee, based on which the employee goes to an occupational medicine doctor to obtain a medical opinion
- conduct occupational health and safety training for the employee
- prepare health and safety documentation (e.g. risk assessment, etc.);
- provide the employee within 7 days of the conclusion of the contract with information on the terms and conditions of employment
- register the employee with Social Insurance Institution (ZUS) within 7 days of starting employment
- conclude an agreement on the management of the PPK (regardless of whether employees want to participate or opt out of the PPK);
- conclude an agreement on the operation of the PPK (if the employee does not resign or would like to join PPK)
- keep records of working time
- set up and keep employee files containing all documentation related to employment
- calculate and pay monthly salaries
- send monthly ZUS reports
- prepare annual tax and ZUS reports.
Read more about our Payroll Services