Taxes and Social Benefits for Workers in Poland

Poland offers a comprehensive taxation and social benefit system to its workforce, combining various tax obligations with a range of social welfare benefits aimed at supporting individuals and their families. These systems are designed to ensure social security, income equality, and financial support for workers during times of need.

1. Income Tax for Workers

In Poland, the income tax system is progressive, meaning that the more you earn, the higher the tax rate. For individuals, income is subject to personal income tax (PIT). The rates in 2025 are as follows:

• 17% for annual income up to PLN 120,000.
• 32% for income exceeding PLN 120,000.
• The PIT system includes various deductions and exemptions, such as for children or disability. Workers can also deduct some expenses related to employment, like work-related travel costs or expenses for professional training.

Tax-Free Allowance- There is a tax-free allowance, which for 2025 is PLN 30,000 annually. This means that if you earn up to PLN 30,000, you do not pay income tax. This tax-free allowance is part of Poland's effort to ensure that lower-income workers are not burdened by taxes.

2. Social Security Contributions

Social security contributions in Poland are mandatory for all workers, both employees and self-employed individuals. These contributions cover a wide range of welfare benefits, including pensions, disability, health insurance, and more. The system is designed to ensure financial security for individuals in times of sickness, injury, or retirement.

Employee Contributions

The total social security contribution rate for employees in Poland is about 13.71% of their gross salary, with the contributions divided into several components:

• Pension Insurance (9.76% of gross salary)
• Disability Insurance (1.5%)
• Sickness Insurance (2.45%)
• Accident Insurance (0.67%)

Employers also make contributions to these funds, with an additional employer’s share totaling approximately 20.48% of the gross salary.

Self-Employed Contributions

For self-employed workers, the contribution rates are slightly different. Self-employed individuals are required to pay contributions to the same social insurance system, but the amount varies based on the declared income. The base amount for the social insurance contributions for self-employed individuals in 2025 is PLN 1,028.34 per month (unless their income exceeds the national minimum wage). However, the rates for self-employed workers tend to be lower than those for regular employees.

3. Health Insurance

Health insurance in Poland is part of the broader social security system and is mandatory for all workers. It is provided through the National Health Fund (NFZ), which finances healthcare services for individuals.The rate for health insurance contributions is 9%, and it is deducted from the employee’s gross salary. The health insurance covers a wide range of healthcare services, including hospital treatment, doctor visits, medication, and rehabilitation. The contribution is split into a 7.75% contribution for healthcare services and a 1.25% contribution for other social purposes.

4. Other Social Benefits and Programs for Workers

Poland provides several other social benefits for workers aimed at providing financial support and ensuring quality of life for those facing challenging situations. Some key benefits include:

• Unemployment Benefits- Unemployment benefits are available for individuals who lose their jobs involuntarily. The amount of the benefit is dependent on several factors, including the individual’s prior income and the length of time they have worked in Poland. Unemployment benefits are typically paid for up to 6 months, but this period can be extended depending on the individual’s circumstances.
• Parental Benefits- Poland offers various parental benefits for workers, including maternity leave, paternity leave, and parental leave. In addition, the "Family 500+" program provides monthly cash payments to families with children. The amount of the benefit depends on the number of children in the family, but it generally offers PLN 500 per child, regardless of income.
• Sick Leave Benefits- Workers in Poland are entitled to sick leave benefits, which are usually covered by the employer for the first 33 days of illness (14 days for those over 50 years old). After this period, benefits are paid by the state social insurance system (ZUS). Sick leave benefits are generally paid at 80% of the worker’s average salary over the past 12 months.
• Disability Benefits- Workers who become disabled are entitled to disability benefits under the social insurance system. This includes both short-term and long-term benefits, depending on the nature of the disability. The amount of the benefit depends on the degree of disability and the individual’s prior earnings.

5. Pensions

The Polish pension system is a combination of public and private savings accounts, and it is designed to provide workers with a basic income during retirement. The system operates through ZUS (Social Insurance Institution), and contributions are made during an individual’s working life. Workers contribute a percentage of their salary to the pension system, and upon reaching retirement age, they are eligible to receive a pension.Pensions in Poland consist of three pillars:

• First Pillar – State pension provided by ZUS, funded by employee contributions.
• Second Pillar – Voluntary private pension savings.
• Third Pillar – Additional voluntary savings, typically through employer-sponsored pension plans.