Navigating the legal landscape while outsourcing IT specialists in Poland - and anywhere, really - can be daunting. If you're resonating with this, we've got you covered. Over time, our international clients has raised similar concerns, sparking the idea for this concise guide.
This isn't a sales pitch urging you to exclusively partner with Develocraft, or a blind endorsement of IT outsourcing.
It's a comprehensive manual on why and how to outsource IT specialists in Poland, answering common questions with data-driven insights and expert opinions.
The largest economy in Central East Europe with the highest growth rate in OECD over last 30 years, which makes it quite resilient for any economic fluctuations
Poland, with over 50 000 ICT companies on the market, was ranked 2nd in Emerging Europe IT Competitiveness Index
Around 450 000 tech workers on the market with over 30 000 graduating every year
Ratings remain high despite the turbulent Times Moody’s: A2, S&P: A-, Fitch: A-, as of the first half of 2022
All the players are here: tech giants such as Google, Amazon, Microsoft, among many others, announced their further large investments in Poland
Polish workers fluently communicate in English (ranked 9th in English Proficiency Index), and other language skills, such as German, Swedish or French are also manageable to be found on the market
Very liberal tax law when it comes self-employment, thus Polish IT workers often aim to choose working on a B2B contract than typical CoE, which means cost and liability decrease for the employer
IT specialists in Poland still expect up to 25% less on their salaries than their London counterparts.
Permanent recruitment is a type of IT outsourcing solution which an organization hires an IT professional on a full-time, permanent basis. The employee is a direct employee of the organization and typically receives benefits such as health insurance, retirement plans, paid time off etc.
The outsourcing company actively helps you in the recruitment process itself. Matching the right specialist is a complex process which will benefit from participation of experts in the subject. After the recruitment process - they are all yours. ;)
Perm recruitment Pros
Full-time IT specialist at your disposal
Stability and continuity in operations
Consistent and dedicated personnel
Perm recruitment Cons
High personnel costs
Less willingness of a potential employee to work in this model
Higher taxes for both employer and employee
Less flexibility to scale down workforce
Body leasing, also known as staff augmentation, is a type of IT staffing solution in which an organization hires an IT specialist on a temporary or contract basis. Still, they are employed by an external agency, which is responsible for their employment (such as payroll and taxes) and benefits.
Body leasing / outstaffing Pros
Almost instant availability of skilled IT professionals
External agency handles employment (payroll, taxes, etc.) and benefits
Potential employees prefer this model of cooperation
Possibility of short contract work, depending on the needs
Reduced costs
The employer pays only for the hours worked
Agency handles HR, payroll, taxes, etc.
Scalability made easy
Body leasing / outstaffing Cons
Employee is external, potentially limiting loyalty or integration
Less control over individual team members
Potential lack of long-term commitment
Salary trends
Salaries for IT professionals in Poland are generally lower than in Western Europe or North America, making it an attractive destination for companies looking to outsource IT services.
However, those salaries have been increasing in recent years, reflecting the demand for skilled talent and the growing recognition of the value of the IT sector.
Junior:
~2.000 USD (8,000 PLN)
Mid:
~4.400 USD (18,000 PLN)
Senior:
~6.100 USD (25,000 PLN)
Junior:
~3.300 USD (3,000 EUR)
Mid:
~5.500 USD (5,000 EUR)
Senior:
~7.700 USD (7,000 EUR)
Junior:
~3.100 USD (2,500 GBP)
Mid:
~5.700 USD (4,500 GBP)
Senior:
~7.600 USD (6,000 GBP)
Junior:
4.000 USD
Mid:
6.000 USD
Senior:
8.000 USD
*please note that individual wages are averaged and may vary based on the specific technology utilized.
Sources:
Salary trends
The short answer is yes - while there are lower-cost countries than Poland,
they often fall short in:
Providing staff that is both skilled and proficient in English
Offering a broad spectrum of specialized talent
Presenting a favorable legal framework
1.500 EUR
Bulgaria
2.500 EUR
Greece
3.200 EUR
Poland
3.500 EUR
Italy
4.000 EUR
UK
4.000 EUR
Netherlands
4.200 EUR
Austria
4.300 EUR
France
5.000 EUR
Germany
7.000 EUR
Switzerland
When exploring the Polish IT industry, it's essential to note that it caters to a diverse range of preferences.
Variable staff numbers, depending on the projects
High autonomy, project-focused cooperation style
High innovation focus
on newest technologies
Stability depends on
the project continuity
Highly attractive for programmers due to the autonomy and innovative projects
Larger teams due to a broader service range
Structured cooperation style,
with project diversity
Balance between innovation
and established tech
Stable with a steady
project flow
Moderately attractive due to the project diversity and structure
Largest teams, spanning multiple services and products
Highly structured
cooperation style, systematic
Focus on large systems,
slower tech adoption
Highly stable due to the size and diverse product range
Highly attractive for programmers due to the stability, development opportunities and benefits
Introduction
Poland has a progressive tax system, which means that individuals and businesses with higher incomes pay a higher rate of tax. It is in force in 2023, after which changes may be made.
For individuals: income tax is levied on a personal income and ranges from 18% to 32% for regular employees and from 19% to 45% for self-employed individuals.
For companies in the IT industry: the standard corporate tax rate is 19%, which is lower than in many other countries. Additionally, companies can take advantage of various tax incentives, such as tax exemptions for research and development activities and investment in new equipment.
For contractors working in the IT industry (more on them later) the tax system in Poland is slightly different. Tech contractors can use a very convincing 12% flat rate. In exchange, they have to register with the tax office as self-employed and are responsible for paying their own taxes and social security contributions.
Due to the very low tax rates, and a possibility to receive many tax returns and reliefs, this employment model in IT became very popular in Poland and is often preferred by polish workers.
This is just an introduction to tax system in Poland.
Want to know more about it? Check out the links below:
In short
Navigating different types of cooperation contracts in Poland's IT sector can be a bit tricky. In the table below, you can find three common contract types: Contract of Employment, Contract of Mandate or Specific-Task Contract, and B2B Contract. Each has its own unique advantages and considerations. For a deeper dive into the specifics of each contract type, keep reading further. ;)
Legal agreement that sets terms of employment relationship.
Suits best:
Long-term, full-time employment
CoE Pros
Stable and safe for both parties
Is a subject to the provisions of labor law and personal data protection
CoE Cons
Expensive
Less flexibility, complex termination procedures
The need for absolute compliance with labor law in a given country
Project-based contract without a long-term employment relationship.
Suits best:
Part-time, project-based tasks
CoM / Task Pros
Not subject to most Labor Law regulations
Flexible
Cost-effective
CoM / Task Contract Cons
Only for part-time
Project-based relationships
Flexible and economically viable for both parties, popular in Poland.
Suits best:
Contractors seeking flexibility
B2B Contract Pros
Tax benefits
Flexibility in negotiating terms
Lower costs
Simplified administration
Cost predictability
B2B Contract Cons
Both parties must understand legal requirements to ensure compliance
Salary trends
Market Research
Know the rates for similar positions in the industry and location
Candidate's Qualifications
Understand the candidate's experience, education, and skills to determine appropriate salary range.
Benefit Highlight
Emphasize offered benefits like healthcare, retirement plans, vacation time, and annual bonuses
Openness to Negotiation
Be ready to discuss salary expectations and consider factors like performance-based bonuses or equity.
Follow-Up
Address any concerns or questions the candidate may have post-offer.
Documentation
Put all agreed terms in writing to prevent future confusion.
Flexibility
The possibility of choosing working hours that best suit them
Remote work
An increasingly popular trend following the COVID-19 pandemic
Health Insurance
The need for access to quality medical care when needed
Wellness programs
Including mental health support
Onsite fitness facilities
To reduce commute time
Work lunches options
Free or subsidized
Vacation time
Importance placed on generous vacation allowances
Retirement plans
Preference for employers offering future-saving schemes like 401(k) plans or pensions
Onsite fitness facilities
To reduce commute time
Extra days off
For expectant mothers
Parental leaves
Valuing of parental leave, regardless of gender.Additional paternity leave
Pet care
An 100% pet-friendly workplace policies - also offering pet care options
100% paid sick leave
Regardless of the form of employment (in Poland, in the case of an employment contract, the sick leave period is paid in 80% - in the case of B2B, however, the paid sick leave depends on individual arrangements)
Birthday Leave
An additional day off on employee's birthday
Extended special leave
For various occasions - both weddings as well as tragic life events (f.e. funerals, miscarriages)
Onsite fitness facilities
To reduce commute time
Radek
Recruitment Expert
1
Customer inquiry (details to clarify)
2
Meeting with the hiring manager
3
Searching for the right candidate
4
Phone Screening
5
Recommendations of the candidate to the client
6
Interview (live coding, question)
7
The decision to hire
Employment Registration
Register the foreigner's employment with the Polish Social Insurance Institution (ZUS). Obtain a PESEL number for them and handle their social security contributions.
Skip the Work Permit
EU citizens don't need a work permit for Poland. If they're staying for more than three months, they should register with the local voivode office.
Employment Contract
Develop a contract that complies with Polish labor laws. This should be in Polish and include details like salary, working hours, and benefits.
Taxes and Social Security
As the employer, you'll pay taxes and social security contributions for your employee. Make sure you register with the correct authorities.
Same Social Benefits
Foreign employees get the same social benefits as Polish employees, like healthcare and retirement plans. Ensure these benefits are part of the employment package.
Marta
Senior IT Recruitment Specialist
Non-EU citizens need a work permit to work in Poland
You'll need to apply for a work permit on behalf of the employee, and the application process can take several months. The work permit is issued for a specific job and is tied to a specific employer.
Visa Categories
Depending on where you hire from, some countries fall under the PBH (Poland. Business Harbour) visa. Program covers the following countries: Armenia, Belarus, Georgia, Moldova, Russia and Ukraine.
Residency Status
In Poland, foreigners may hold various types of residency cards, including Blue Card, UE resident, PBH, and others – each type has its unique conditions and provisions. Find more information here.
Special Circumstances
Foreign individuals who studied in Poland, have a Polish spouse, or have gained citizenship are treated as Polish nationals during the hiring process.
Business Opportunities
Foreigners with, for example, a PBH visa can set up a business in Poland, allowing employers to hire them under B2B contracts or standard employment agreements.
When considering cooperation with Polish IT professionals, it's essential to understand public holidays in their country. These are mandatory days off, observed as cultural and historical celebrations, religious events, and significant milestones in Poland's history. This applies to all employees, including those on contract or B2B agreements.
January 1
Easter
January 6
Epiphany
No fixed date
(March 22 - April 25)
Easter
May 1
Labor Day
May 3
Constitution Day
No fixed date
(May 21 - June 24)
Corpus Christi
Last Friday of June to 1 week of September
Summer Break
August 15
Assumption of Mary
November 1
All Saints' Day
November 11
National Independence Day
December 24
Christmas Eve
December 25-26
Christmas
Develocraft is a People & Software Company from Poland, specialized in delivering well-qualified IT teams for those who need it.
Schedule a quick discovery call with our business development manager to talk about you.