With effect from 1st January, 2018 the minimum wage rates in Poland have been reorganised. Compared to the previous year, the minimum earnings have increased by 100 zlotys gross. A new minimum hourly rate will also apply in the new year. The amendment in the area of the ‘Minimum Wage Act’ affects a total of around 1.4 million employees in Poland.
The minimum salary is the statutory salary that the employer must pay to the employee for full-time work, regardless of qualification, job, components of remuneration and working conditions.
The statutory minimum wage in 2018, was 47.3% of the average salary in the national economy. Accordingly, it was 5% higher than in the previous year. The salary calculation does not include overtime, night work, rewards and severance pay.
In 2018, a worker in Poland will have to earn at least 2,100.00 PLN gross, which after tax and contribution deductions will amount to 1,530.00 PLN nett. In 2017, it was still 1,460.00 PLN nett.
Minimum Hourly Wage
The hourly wage does not only apply to employees who work on the basis of service contracts. It also applies to self-employed persons who, as sole traders, realise fixed-term contracts for other companies. The minimum hourly wage applies to all contracts, regardless of the type of calculation (for example, daily rate, weekly rate, etc.).
Exempt from the minimum hourly wage regulation are, for example: Self-employed, who decide themselves on the time and place of the order conversion, if the reward depends on the result obtained.
The minimum hourly wage is upgraded using the minimum wage growth rate. In 2018 it will be increased by 0.70 PLN to 13.70 PLN gross per hour higher.
Supplement for Night Work
Increasing the minimum wage will not affect the benefits paid to employees based on the minimum salary. For example, the allowance for night work must be paid for each hour worked at night. Its amount is equal to 20% of the hourly wage, which is calculated accordingly from the minimum salary. This is the minimum rate – the employer can set the allowance higher.
The amount of the minimum wage is also decisive for the severance pay for the employee on termination of a block exemption. Depending on the length of service, the custodian receives a severance pay equal to up to three months’ salary. However, the legislator has introduced a severance pay ceiling. This corresponds to 15 times the minimum wage. In 2018, it will be 31,500.00 PLN, at 30,000.00 PLN in the previous year.
Social Security Contributions
Entrepreneurs who pay social security contributions to the Polish Social Insurance Institution (ZUS) pay 5% more. The contributions will be charged on the basis of the stated amount, which may not be lower than 30% of the minimum wage. For 2018, a base of 630.00 PLN applies. Employers pay a total of 200.16 PLN in social contributions.