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Taxation system in Poland? My company is cutting 38%!?


hakuchha 3 | 27
11 Nov 2011 #1
Hello folks

I am new here in Poland and working for a Polish institution. i have no idea about taxation system in Poland. My company is cutting ~38% percent on salary which i think is bit high. When i ask, they are not showing my tax breakdown in detail and saying that its because of tax+social security ( pension)+ medical insurance. I am not an EU citizen therefore i want to opt out from social security as i will be living here for only 3 yrs. Is that possible ? could any of you elaborate on taxation breakdown ? any help would be highly appreciated !

thanks
Tlum 10 | 150
12 Nov 2011 #2
Most folks would like to opt out of social security.. but it's not possible, I guess.
OP hakuchha 3 | 27
13 Nov 2011 #3
@Tlum, thanks for your response.

could anyone shed light on taxation system in detail ! I thought many expats working in poland know these things inside out and was expecting a generous answers!
Wroclaw 44 | 5,387
13 Nov 2011 #4
it's a long weekend. u may have to wait a while.
teflcat 5 | 1,032
13 Nov 2011 #5
I thought many expats working in poland know these things inside out and was expecting a generous answers!

The two people who would be most helpful to you have been suspended. Wait a few days and try again.
If I were you, I'd demand a breakdown of your deductions. 38% sounds steep.
Wroclaw_666 1 | 47
13 Nov 2011 #6
could anyone shed light on taxation system in detail ! I thought many expats working in poland know these things inside out and was expecting a generous answers!

I think they are right. I don't know exact details of PL taxation system, but I know there are few taxes included: the income tax (depending on the amount 18 or 32% - 18% is to some income level, above this level the country takes 32%), the second is so called - ZUS (Zaklad Ubezpieczen Spolecznych or Zaklad Utylizacji Szmalu :) ) - they take 3 different taxes (insurances :) ), one is for the retirement pension, one for the medical treatment and one for something like a social insurance (I don't know exactly). If you have a legal employment contract then you can't avoid these taxes... sad but true, the cost of employment in PL is very high.
OP hakuchha 3 | 27
14 Nov 2011 #7
ok, so if i pay social security stuffs now, can i get it back when i will leave poland ?
jwojcie 2 | 763
15 Nov 2011 #8
^^
it all depends what kind of work agreement you have. Just to see and compare what typical tax look like for a Polish person on typical work agreement try this:

money.pl/podatki/kalkulatory/plac/

just leave deafult settings, put your salaries gross into box after "brutto", click "Dodaj do miesięcy" button (it will fill monthly boxes automatically), finally click "Oblicz" and there you will see how it is to be a typical Kowalski with your salary. Taxes/pension funds/insurance is mostly everything except "brutto" and "netto" (this is what Kowalski gets).

I don't know how it works with foreigner, and if it works with every kind of agreement, but typically employer has a duty to give employee his monthly taxation breakdown. It is called RMUA. Just ask: where is my RMUA people?
raunak166
4 May 2014 #9
Merged: Taxation structure in Warsaw/Poland for non residents?

Hi,

I'm currently considering a job over from my company in Warsaw. To best evaluate the salary, i want to know the % of my salary that will be deducted as tax.

Being a non resident, will i have to pay more tax? I have ready on some websites that the tax rate is 18%.

Can someone help me with this query.

Thanks!
johnb121 4 | 184
4 May 2014 #10
You've not said where you're from, nor have you said how much time you will spend in Poland. Essentially you need to look at the tax treaty to see where you will be tax resident and then which state has the tax right ... then look at social security contributions where the law can differ.
Monitor 14 | 1,820
4 May 2014 #11
It matters how much gross your salary is going to be. Thee are fiew tax levels. Best use online calculator.
monra - | 1
4 May 2014 #12
If you happen to be American, this may be of interest to you. A big chunk of a salary is taken by local mandatory health care insurance. Does anybody know if that can be deducted for US taxes? If so, how?
Dont gag me yo 7 | 156
4 May 2014 #13
No it cant be,you have to show your income ib USA though but it will not be taxed,but cant be deducted.
rbind
5 May 2014 #14
Even i have the same query, I will be working in Warsaw for around 3 years. I am from India, and would fall under the 18% tax bracket as per different websites.

However, my confusion is, will i have to pay ZUS over this 18% or is that something that my employer will pay and will not be deducted from my salary.
Monitor 14 | 1,820
5 May 2014 #15
Use calculator:
sedlak.pl/Kalkulator_wynagrodzen.html

Just type there gross salary and in next view you will see your NET monthly salary in: Umowa o pracę > Koszty pracownika > Netto (column).

Examples:
1680zł gross = 1237zł net
4000zł gross = 2854zł net
8000zł gross = 5640zł net
15000zł gross = 10518zł net

So as you see net salary is between 74% of gross down to 70% gross in case of high earnings. (That's not so bad, because in Germany it's around 60%)

The difference is:

Health insurance
Sick insurance (worker get payed when sick)
Disability insurance
Retirement Insurance
Advance payment of income tax

Foreigner must pay that money, cannot get them back when leaving Poland. Without permanent permit to stay foreigner could take advantage of health and accident insurance, but contributions for retirement found will be wasted except if foreigner decides to retire in European Union.

In some cases foreigner has to pay extra tax at home. That depends on agreements between countries. You're lucky because there is favorable agreement between India and Poland

przepisy.gofin.pl/przepisy,4,15,121,99,,,umowa-miedzy-rzadem-polskiej.html

It says in article 16th that earning of Indian worker in Poland can be taxed in Poland only:

1. Z zastrzeżeniem postanowień artykułów 17, 18, 19, 20, 21 i 22 pensje, płace i podobne wynagrodzenia, które osoba mająca miejsce zamieszkania w Umawiającym się Państwie osiąga z pracy najemnej, mogą podlegać opodatkowaniu tylko w tym Państwie, chyba że praca wykonywana jest w drugim Umawiającym się Państwie. Jeżeli praca jest tam wykonywana, to osiągane za nią wynagrodzenie może być opodatkowane w tym drugim Państwie.

will i have to pay ZUS over this 18% or is that something that my employer will pay and will not be deducted from my salary.

Your employer will be contributing to your insurances too. But that's his extra cost. It's around 20% of gross salary in Poland. It means, that when you get employed for average salary 4000zł gross, it will cost your boss 4824zł. Employer would get only 2853zł of that. That means that total taxation of work in Poland is around 41%. It's possible to lower amount of taxes payed, by working as a contractor:

pl.wikipedia.org/wiki/Umowa_%C5%9Bmieciowa

But that's usually not available for foreigners, because employment status is usually needed in order to get visa.
rbind
5 May 2014 #16
Thanks! This was really helpful.

Now i think i have a clear picture. So the net income in hand is somewhere around 70% after all deductions.
zeewoo2015ro
16 Mar 2015 #17
Merged: Tax level for foreigner (EU) employed in Poland

Dobry wieczór wszystkim! :)

I am employed in the IT field in Romania and I was offered a position based in Warsaw with a gross salary around 9000 PLN.

I have been reading several topics on these forums and I see that the tax level is around 18%.

I have, however, a few questions, namely:

1. What is the total (and I mean total, including social insurance, tax for national health system, etc) amount of taxes to be deducted from a netto of, say, 9000 PLN? In Romania, that total amount of tax is around 33%, everything included. I am not that good in Polish so I don't really understand where to look in the calculators I have found online :)

2. Do you have any guidance regarding a law that explains if the income is also taxed in Romania or only in Poland? I have seen a thread where someone reference a link explaining that, for example, for someone that comes from India and is employed in Poland, due to an agreement between Poland and India, they are only taxed in Poland.

Thank you very much for your help, it is very much appreciated! Dziękuję! :)
Monitor 14 | 1,820
16 Mar 2015 #18
You will get around 70% of gross salary or 60% of what employer will spend on you. In Europe you pay taxes only in one country. So if you have worked for 2 months in Romania and rest in Poland then you pay Polish taxes in Poland and Romanian in Romania only.
zeewoo2015ro
16 Mar 2015 #19
@Monitor - thank you for the clarification! So - more or less like here, where one multiplies gross income by 0.7 to obtain a rough figure of the net income.

I only found later today a site that categorised the taxes in 2 levels - 0-85.000 PLN - 18% and 85.000+ PLN 32%. Now if that 32% is without social insurance and tax for the national health system, maybe those 2 add to 40% (as a maximum figure), indeed.

I will take these further with my possible employer. Thanks once again!
mcm1 2 | 81
16 Mar 2015 #20
The social security taxes are currently 13.71% for employees, that is in addition to your individual tax as above.
Monitor 14 | 1,820
17 Mar 2015 #21
Actually I've checked calculator now and it's exactly 70%. You would get 6337.15 zł net. I mentioned that employer pays more than gross salary and in case of 9000zł and "Umowa o Pracę" it's 10866zł what he would have to spend. This is the amount which you would get if you were having 1 person company. You could ask the company if they do some tax optimization, because it's possible to legally pay less taxes in Poland. (ask about " 50% koszty uzyskania przychodu" or Umowa o dzieło)
zeewoo2015ro
19 Mar 2015 #22
Thanks guys for your help!

However, I'm still a bit confused, allow me to explain once again what I understand and please tell me if I am right. I am talking below only about gros figures unless I specify otherwise

So - we have 9000/month * 12 months = 108000 ZL a year

Now - I understood that not the whole amount is taxed with 32%, but only what is over 85000 ZL anually.

This means out of 108000 - 85000 is taxed with 18% and 23000 with 32% => 108000 - (15300 + 7360) = 85340 ZL.

Now to the 85340 ZL anually we apply the 13.71% for social insurance, that is 85340 - 11700.114 = 73639.86 ZL anual NETTO amount = 6136.655 ZL/month NETTO

Is my calculation correct?

Thank you in advance for bearing with me! ^^
Monitor 14 | 1,820
19 Mar 2015 #23
Compare results of the calculator with your calculations: wynagrodzenia.pl/kalkulator.php
ufo973 10 | 89
20 Mar 2015 #24
Welcome to ZUS...The Polish Mafia :p
Pechimuthu - | 8
23 Mar 2015 #25
Merged: Job tax slab for a 110700 PLN gross in Poland?

HI,

I have just got my offer with 110700 PLN as gross pay per year, what is the tax slab for this annual pay.. also any idea on how much would be the deductions/ how much can I expect net take home per month with this .. I know this is little tricky because company has not given me the break up yet.. just want to know how much would be approx take home for Gross 9225 per moth


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