Hire Contractors in Poland

Poland, a country renowned for its rapid economic growth, has become an attractive destination for businesses looking to expand their global reach. 

By January 2024, the nation's workforce had surged to over 15 million employed individuals, reflecting a thriving job market. The unemployment rate declined, reaching 5% in May 2024, down from 5.1% in December 2023.

This vibrant economy has caught the eye of companies worldwide, especially those seeking skilled contractors. Imagine collaborating with professionals who bring fresh ideas and expertise to your projects. 

Many businesses are discovering the advantages of hiring Polish contractors, whether through direct hires, contractor management software, or Employer-of-Record services.

In this article, we’ll guide you through hiring contractors in Poland and how you can navigate the challenges the process poses.

How to Hire Contractors in Poland

You can hire contractors in Poland by following either of these methods,

• You can directly hire an independent contractor in Poland without seeking the services of contractor management software.
• You can partner with an AOR like Skuad to ensure fast and seamless hiring.

When hiring directly, you need to ensure that you have predefined hiring objectives, then you can move to discovering suitable talent and negotiating payments. 

Once the hiring is over, you need to take care of managing contractors and handling all financial transactions independently. 

To avoid such hassle, you can opt for AOR platforms like Skuad. 

Hiring Contractors Through Skuad AOR

• With Skuad as your AOR, you can simplify the onboarding process, all while ensuring compliance with Poland's labor laws.
• From invoicing and expense approvals to reimbursements, locally compliant contracts, and more, Skuad handles everything on your behalf.
• Additionally, Skuad runs a global payroll in over 100+ currencies so that you can always guarantee that your Poland contractors are paid on time and accurately.
• When your business evolves, you can seamlessly transition contractors to employees with Skuad AOR. We maintain their employment history and records intact so you can grow your business further. 

How To Pay Contractors in Poland

To pay contractors in Poland, you can follow any one of the following methods:

• Paying directly: The traditional method involves paying Poland contractors directly through platforms such as PayPal, Worldpay, or Wise. While this provides greater control over the payment process, it typically entails significant administrative challenges, like handling payroll for multiple countries, comprehending currency conversion rates, and other things.

• Paying with Skuad AOR: Partnering with Skuad allows you to automate payroll quickly and easily, handle invoicing, and guarantee compliance. Its unified platform runs payroll in over 100+ currencies and simplifies everything on your behalf, including pay, taxes, and social benefits.

Challenges of Hiring Contractors in Poland

Look at the challenges you will likely encounter when you decide to hire contractors in Poland.

1. Understanding the Rigid Civil Code

Hiring contractors in Poland presents unique challenges that can catch many businesses off guard. 

The legal landscape is defined by the Civil Code, which lays out various types of agreements, such as the contract of mandate, the contract of agency, and the contract for a specific task. Each of these agreements has its own set of rules and flexibility.

The contract of mandate is characterized by

• The freedom to determine and shape the contents of the contract
• Lack of obligation to set daily and weekly working time limits
• Flexibility in determining the date and place of work performance. 

Furthermore, the contract of mandate may be dissolved by any side at any time, unlike an employment contract.

When hiring contractors in Poland, you need to be aware of all these nuances and ensure compliance is followed to minimize the chance of worker misclassification. 

It can be quite difficult to stay up to date with Poland's many labor rules if you lack the legal expertise or dependable contractor management software.

2. Tax Requirements

When employing contractors in Poland, you must adhere to the subsequent tax laws:

• No matter the civil law contract, the employer must pay income tax.
• The contractor's compensation determines whether the employer will pay a flat-rate tax or an income tax advance.
• Additionally, individuals entering into the contract of mandate are liable for health insurance, disability pension insurance, and retirement pension insurance. 

But these are just a few of the numerous measures that Poland's labor and income tax laws have established. 

A robust payroll system is required to handle these responsibilities. However, it typically demands a large investment of time and resources, which can be difficult to manage, especially for businesses with budgetary constraints.

Hiring Contractors Directly vs Hiring Contractors via Skuad

Let’s take a look at this detailed comparison between the two main ways of hiring contractors in Poland.

Cost of Hiring Contractors in Poland

The average pay for an independent contractor in Poland is currently PLN 215,583 per year and PLN 104 per hour. Apart from this, as an employer, you need to take care of the onboarding cost, training cost and other compensation as per the contract. 

Please be aware, though, that this number could change based on the type of work being done, the industry, or the contractors' experience level. An individual with many years of experience will likely charge you more than a contractor who has just started their career. 

How to Convert a Contractor into an Employee in Poland

To convert a contractor from a 1099 to a W2 is the equivalent of turning them into employees. Even though the procedure is fairly simple, if you don't follow the instructions listed below, it can get rather complicated.

• Gain a thorough understanding of Poland's employment regulations and their differences. For instance, the Civil Code is The main law governing contractors' obligations and roles of contractors in Poland. The Polish Labor Code, on the other hand, enumerates the requirements for the employment relationship.
• While making sure all legal criteria are met, negotiate with the contractor the working hours, pay requirements, and perks. For instance, workers in Poland are permitted to put in up to 40 hours a week.
• Draft the necessary employment contract, highlighting all the details.
• Get employee data and run a comprehensive background check as soon as the contract is signed.
• Sync your new hire with your time and attendance software and payroll system.

Hire Contractors in Poland with Skuad

Skuad simplifies the hiring process by consolidating all tasks related to contractor management onto a single platform. This includes contractor onboarding, compliance, payments, invoicing, and more. 

The platform supports payroll in over 100 currencies, integrates IP protection, and automates contractor payments, providing a comprehensive solution for global employment.

Additionally, Skuad’s internal legal team ensures that all contracts comply with local laws, significantly reducing the risk of employee misclassification. 

This level of legal support is crucial for businesses operating in multiple jurisdictions.

So, book a demo today and experience the difference for yourself.

FAQs

Q1:  What is the difference between an employee and a contractor in Poland?

Ans: One of the main distinctions between an employee and a contractor is that the former works directly under the employer's supervision at the location and time designated by the latter. A contractor, on the other hand, does not remain at the disposal of the employer. They have much more freedom during the work performance.

Q2: What is the tax rate for contractors in Poland?

Ans: Depending on income, an independent contractor's tax rate in Poland presently varies from 12% to 32%.

Q3: Is it better to hire employees or independent contractors?

Ans: Employers who hire contractors rather than employees for their company typically have more business flexibility. The main reason for this is that companies typically do not withhold taxes from contractors. Rather, it is the individual's responsibility to pay taxes related to self-employment. Furthermore, contractors are not covered by the same employment and labor laws as workers. 

Q4: How does Skuad help with contractor management?

Ans: You can oversee every step of the contractor onboarding procedure with Skuad's unified platform. Strong features include:

• Automatically invoicing and paying contractors.
• Creating contracts that are compliant with local laws and approved by legal professionals.
• Making accurate and timely payments without any hassles. 

Q5: Why do companies use contractors instead of employees?

Ans: The array of advantages that Polish contractors offer organizations makes them a popular choice over workers. It is less expensive and more flexible, competitive, and liability-free.