Minimum wage increases in 2025

Minimum wage increases in 2025
The Polish government has announced new minimum wage rates that will go into effect on January 1, 2025. These changes will have a significant impact on both employees and employers. The new regulation provides for an increase in the minimum wage and hourly rate, in response to the projected rise in inflation. Here are the key details of this decision and its implications.

New minimum wage rates

From the beginning of 2025, the gross minimum wage will be 4,666 PLN, which is an increase of 40 PLN compared to the government’s earlier proposals. The minimum hourly rate will be raised to 30.50 PLN. This adjustment follows revision of inflation forecasts, which now predict a 5% inflation rate in 2025, compared to the earlier estimate of 4.1%.

The decision to implement a one-time increase in the minimum wage comes as a surprise, as in previous years, the changes were usually implemented twice – at the beginning of the year and mid-year. This time, however, the increase will be implemented only once and will remain in place throughout 2025.

Impact on employees

The minimum wage increase will bring noticeable benefits to employees, especially those in lower-level positions. After deductions for social contributions and taxes, without accounting for tax reliefs, a worker earning the minimum wage will get 3,510.92 PLN. This is a significant rise compared to the current net amount of 3,261.53 PLN.

The increase in the minimum hourly rate will also improve the situation of those working under civil law contracts. From January 2025, the hourly wage will be 30.50 PLN gross, an increase over the current rate of 28.10 PLN gross.

Impact on employers

The minimum wage increase also carries higher costs for employers. A gross salary of 4,666 PLN generates a total cost of 5,621.59 PLN for the employer. This will be particularly noticeable for small and medium-sized companies, which will face annual costs estimated at around 11.8 billion PLN. Large companies, on the other hand, will incur costs of around 3.15 billion PLN.

Why is an increase in the minimum wage necessary?

The increase in the minimum wage is intended to mitigate the negative effects of inflation, which continues to persist in Poland. The government predicts that inflation will reach 5% in 2025, meaning that wage increases are necessary to protect the real purchasing power of the lowest-paid workers. It is worth noting that in 2025, the minimum wage will represent 53.83% of the projected average wage, which is one of the determinants of maintaining an adequate standard of living in the face of rising costs of living.

If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.

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