Hiring Polish Software Developers: Everything You Need to Know About the Types of Cooperation Agreements in Poland

Definitions

What is an employment contract?

An employment contract is a standard form of employment in Poland. It contains the scope of rights and obligations of both the employer and the employee. It describes the role of the employer and the specific tasks of the employee. The employer must pay the employee as previously agreed, and the employee is to perform the duties assigned by the superior. The employment contract and all its rules are based on the Polish Labour Code.

What is B2B contract?

The B2B (Business-to-Business) contract is an alternative to an employment contract. A software developer starts his own company (and becomes self-employed) to provide services to another IT company. Instead of a monthly salary, he or she issues an invoice that the client is required to cover. It is a contract between two companies; it is governed not by the Labor Code but the Civil Code.

B2B and employment contract — the two most popular types of employment among Polish software developers

B2B contract and employment contract are the two most popular forms of employment among Polish software developers. Interestingly, according to the No Fluff Jobs report “Rynek pracy w IT w Polsce w 2020 roku”, the popularity of a particular type of contract depends on years of experience.

B2B and employment contracts — key differences

To better understand the difference between the two most common types of developer contracts, we have prepared a table covering the most important issues. If any points need more explanation, you will find them under the table.

Paid holiday — to whom and how many days does it entitle?

When you sign a B2B contract as a client, you are under no obligation to offer paid vacation days. However, this is flexible, and you can agree on “paid rest time” at a given number of days in a year. If you hire an employee under a contract of employment, the Polish Labor Code requires you to provide the employee with 20 or 26 days of vacation.

  • 4–5 years — for people from a general or vocational secondary-level school,
  • 8 years (in total) — for people who have completed higher education (regardless of the type of degree obtained).

Taxes, health, and social contributions

It’s time for the most complicated and dynamically changing difference between these two employment contracts — taxes, health, and social insurance contributions. When comparing a B2B and an employment contract, you should remember that the gross amount is not all the expenses you incur as an employer. Some of the premiums are deducted from the employee’s gross amount, and some are added to the employer. We have outlined the significant differences in contributions in the table below.

  • the employee’s gross salary — for social contribution
  • gross salary minus social contributions — for health contributions
  • an amount not less than 60% of the average salary in Poland (in 2021, it’s 3155,40 PLN) — for social insurance on the entire Social Insurance Institution (ZUS) contributions
  • an amount no less than 75% of the average salary in Poland (in 2021, it is 4242,38 PLN) — for health contributions

Total costs — the differences

To better understand the difference in earnings for B2B and employment contract programmers, just take a look at the comparison table.

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Marketing Specialist at Next Technology Professionals - IT Recruitment | IT Outsourcing

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Aga Babicz

Aga Babicz

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Marketing Specialist at Next Technology Professionals - IT Recruitment | IT Outsourcing