Gross to net Payroll Engine Poland

G2N Nova is the exclusive Gross to Net Payroll Engine Poland, capable of delivering 100% accurate gross-to-net calculations for Poland and over 100 other countries. Remarkably, it achieves this in real-time through a unified, native platform without storing or accessing any employee-identifiable information.

This cutting-edge payroll solution addresses the challenges of complex data privacy compliance by ensuring that sensitive employee information remains entirely within the client’s systems. G2N Nova does not require access to this data to perform gross-to-net payroll calculations, offering a secure and efficient alternative.

To learn more about the Gross to Net Engine Poland, request a demo.

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Gross to net payroll tax engine for Poland

Are you looking for the latest payroll tax updates in Poland? Powered by G2N’s Payroll Tax Engine Poland, our cloud-based platform delivers real-time, continuous updates tailored specifically for Polish payroll regulations. This SaaS tax engine seamlessly integrates with historical payroll data in pay statements.

• Maintain your existing HCM/ERP/WFM software without switching to an external payroll solution.
• Partner with a provider offering a plug-and-play solution exclusively for payroll tax updates with the Payroll Tax Engine Poland.

Solutions

1. HCM/ERP/WFM Systems: G2N integrates effortlessly with all major HCM, ERP, Time, Pay, and Attendance systems, allowing organizations to continue using their existing infrastructure without disruption.
2. System Integrators: G2N enables system integrators to easily add cross-border payroll functionality to their platforms. This simplifies international payroll management while giving integrators full control over the user experience, ensuring tailored and seamless payroll solutions for their clients.
3. Enterprises: Simplify your payroll management with G2N’s unified platform. Eliminate processing headaches, free up valuable time to grow your business, enhance your products, or finally take that much-needed vacation!
4. SMEs: Built for flexibility and growth, G2N scales effortlessly to accommodate your expanding workforce and evolving compliance needs. From 1 to 120,000 records, G2N ensures accurate real-time gross-to-net payroll processing, making it the perfect solution for small and medium-sized businesses.
5. Service Providers: Focus on what matters most to your clients and your business with G2N’s seamless payroll processing platform, trusted by leading Fortune Global 500 companies

How It Works

Input

• Employee Data: Captures key details, including compensation, benefits, and personal information.
• Leave Management: Tracks and processes employee leave, absences, and time-off.
• Time & Activity Tracking: Monitors work hours, attendance, and overtime to ensure precise payroll calculations.

G2N Nova Process

• Country-Level Filing: Seamlessly integrates with statutory authorities to ensure accurate tax and social security filings in compliance with Poland’s regulations.
• Country-Level Compliance: Adheres to Polish payroll laws, backed by an in-house compliance team ensuring full regulatory alignment.
• Global Payroll Engine – Gross to Net Computation: Provides real-time, precise gross-to-net payroll calculations, ensuring accurate payments and deductions.
• Tax Engine Poland: Ensures compliance with evolving tax regulations, automatically applying updates to payroll calculations.

Output

• General Ledger (GL): Delivers detailed financial records for accounting and reconciliation.
• Treasury Management: Generates reports for cash flow planning and treasury oversight.
• Bank File Generation: Prepares secure bank files for seamless payroll disbursements.
• Payslips: Issues detailed payslips, outlining deductions, taxes, and net pay for employees.

G2N Nova offers a secure, scalable, and fully compliant payroll solution for Poland and beyond. With an integrated Tax Engine Poland, it ensures payroll remains up to date with local tax laws while seamlessly connecting with existing systems for a real-time, efficient payroll experience.

Features of G2N Payroll Engine Poland

Benefits

Streamlined Payroll Processing

G2N Payroll Engine Poland delivers fast, accurate, and fully compliant payroll processing, powered by an advanced Tax Engine Poland for precise tax and salary calculations.

Seamless Integrations

Our platform seamlessly integrates with Poland’s payroll and HR systems, ensuring smooth data transfer, improved operational efficiency, and error-free payroll tax calculations.

Automated Payroll Data Extraction

G2N eliminates manual data entry, automating payroll data extraction to reduce errors and streamline payroll tax management, backed by the robust Tax Engine Poland.

Multi-Country Payroll Capabilities

Businesses operating in Poland can effortlessly manage multi-country payroll, ensuring seamless tax compliance and accurate payroll processing with G2N’s cutting-edge Tax Engine Poland.

Everything you need to know about Gross to Net Calculation in Poland

The tax year refers to the year in which the earnings were received. Payroll calculations are based on the actual date of salary payment rather than the period in which the work was performed.

Employment Details

• Hire Date – Official start date of employment.
• Termination Date – Official end date of employment.
• Last Working Day – The final day an employee actively works before separation.

Gross & Net Salary

• Gross Salary (PLN): The total salary before deductions such as taxes and social security contributions.
• Net Salary (PLN): The take-home pay after deductions, including income tax and employee contributions.

Employee Contributions

Employees contribute to Poland’s social security system (ZUS), covering various insurance types:

• Old-age pension insurance: Mandatory contributions securing future retirement benefits.
• Disability pension insurance: Contributions providing financial support in case of disability.
• Sickness insurance: Ensures compensation during illness or maternity leave.

Basis for Health Insurance

The health insurance contribution is deducted from the gross salary and provides access to public healthcare services.

• Income costs: Standard deductions reducing taxable income.
• Basis for taxation: The taxable portion of an employee’s earnings.
• Tax relief: Eligible deductions lowering the final tax liability.
• Taxation: Earnings exceeding PLN 120,000 are subject to a 32% tax rate.
• Tax advance: Employers deduct a monthly tax advance from employee salaries.

Employer ZUS Contributions

Employers in Poland contribute to ZUS (Zakład Ubezpieczeń Społecznych) to fund employee benefits:

• Old-age pension insurance – Employer contribution towards employee retirement.
• Disability pension insurance – Employer-funded support for disability benefits.
• Work accident insurance – Covers work-related injuries and occupational diseases.
• Labour Fund – Supports unemployment benefits and job market initiatives.
• Fund of Guaranteed Employee Benefits – Ensures compensation in case of employer insolvency.

Salary calculator – employment under an employment contract

After selecting the tax year and specifying remuneration, additional employment-related factors can be considered to determine the net salary. For employment contracts, these factors include:

• Tax-free amount
• Work outside the place of residence
• Employee Capital Plans (PPK)
• Author’s costs of obtaining income (50%)
• Middle-class relief
• Return relief
• Family 4+ relief
• Tax relief for individuals under 26

Additionally, employees can confirm whether they have submitted a declaration to not withhold the 32% tax rate.

The gross-net calculator also accounts for situations where a working retiree does not receive a pension. Employers can also check total payroll costs, including social insurance contributions, Labor Fund, and FGŚP contributions, to understand the difference between gross salary and total employer costs.

Salary calculator – contract work

For contracts of mandate, users can select the applicable employment status, which affects contributions and income tax advance payments. Options include:

• Only this contract applies
• Additional contract, total earnings below minimum wage
• Additional contract, total earnings at least the minimum wage
• Contract-based employment with a current employer

If the individual is under 26, the calculator considers the youth tax relief (for earnings up to PLN 85,528 annually). If they are also a student, the calculator excludes social and health insurance contributions.

Depending on employment status and age, the calculation may include:

• Sickness insurance contributions
• Pension and disability insurance contributions
• PPK deductions
• Author’s costs of obtaining income
• Tax exemption declaration for individuals under 26

With one click, users can also check the employer’s total costs, including social security contributions, Labor Fund, and FGŚP payments.

Salary calculator – work under a contract for specific work

The calculator also estimates gross or net salary for those earning under a contract for specific work. Users can indicate if they are employed under this contract with their current employer, which affects pension, disability, sickness, and health insurance contributions.

Additional options include:

• PPK contributions
• Author’s costs of obtaining income (50%)
• Employer contributions (retirement, disability, accident insurance, Labor Fund, FGŚP)

Tax-Free Amount

If a PIT-2 declaration has been submitted, the tax-reducing amount is PLN 300 per month (as per regulations from July 1, 2022).

Work Outside Place of Residence

If the workplace is located outside the place of residence and no separation allowance is received, the calculator applies a PLN 300 monthly deduction.

Employee Costs Exemption

From 2023, employees may opt out of increased employment cost deductions (PLN 300 per month) by submitting a request under Article 32(6) of the Updof Act.

Employee Capital Plans (PPK)

The calculator includes PPK contributions, considering both the employee’s share and the employer’s taxable contribution, which is added to income for tax calculation.

Author’s Costs of Obtaining Income (50%)

Users can specify the portion of income subject to 50% author’s costs. This deduction applies after ZUS contributions and is capped at PLN 120,000 per year.

Labor Fund Contributions

Employers contribute 2.45% of income to the Labor Fund, except for salaries below the minimum wage.

FGŚP Contributions

The Guaranteed Employee Benefits Fund (FGŚP) contribution is 0.1% of income and applies only to certain employment types.

Relief of Return

Starting in 2022, taxpayers who have moved their residence to Poland can claim a personal income tax (PIT) exemption for income up to PLN 85,528 per year. This exemption applies to earnings from:

• Employment contracts, service relationships, outwork, and cooperative employment relationships
• Contracts of mandate
• Non-agricultural business activity, taxed under the progressive tax scale, flat rate, or 5% IP BOX (qualified intellectual property rights)

Working retiree with the right to a pension (not receiving a pension)

This relief applies to retirees and individuals entitled to a family pension who:

• Are at least 60 (women) or 65 (men)
• Have acquired pension rights but choose not to receive them
• Continue to work

In such cases, income up to PLN 85,528 per year is tax-exempt, provided the employee submits a declaration to the employer. If no application is submitted, tax will be withheld but can be refunded through the annual tax return.

Discount for families 4+

As part of the Polish Deal, a tax relief for large families was introduced in January 2022. To qualify, a parent or legal guardian of four or more children must submit a declaration to their employer.

• The declaration is legally binding and subject to criminal liability if false.
• Once submitted, the employer will stop deducting advance tax payments.
• Each eligible parent can claim tax exemption on income up to PLN 85,528 per year.

Discount for people up to 26 years of age

Employees under 26 years old can benefit from a PIT exemption on earnings up to PLN 85,528 per year. The payroll calculator ensures that:

• If selected, no income tax advances are deducted throughout the year.
• If total earnings exceed PLN 85,528, tax applies only to the excess amount.

Declaration of non-deduction of 32% tax

Employees can submit a declaration to their employer to prevent automatic withholding of the 32% tax rate on income exceeding PLN 120,000. This ensures that only the lower tax threshold is applied.

A single parent raising a child with an income of up to PLN 120,000

Single parents earning up to PLN 120,000 per year can opt for preferential tax treatment by selecting this option in their tax return.

Social Security Contributions

In Poland, social security contributions cover:

• Pension insurance
• Disability insurance
• Accident insurance
• Labour Fund contributions
• Sickness insurance

The system applies to economically active individuals, including employees and self-employed persons. Contributions may be mandatory or voluntary, depending on the employment type.

Social Security Contributions for Employees and Employers

Both employees and employers must contribute to Poland’s social security system. Employers are responsible for:

• Paying their own share of contributions
• Withholding the employee’s share from gross salary
• Remitting all contributions to ZUS (Social Security Institution) monthly

Contribution Rates

As of April 1, 2015, the employer contributes 19.21% to 22.41% of the employee’s gross salary, while the employee pays 13.71%. These contributions are tax-deductible for both parties.

For 2023, contributions apply only to salaries below PLN 208,050. Beyond this cap, the rate decreases to 3.22% to 6.41% (employer) and 2.45% (employee).

Breakdown of Social Security Contributions

Social Security for Mobile Employees

Social security treatment for mobile employees depends on:

1. EU Coordination Regulations
2. Bilateral Social Security Agreements
3. Polish Domestic Regulations (if no international agreement applies)

Social Security Contributions for the Self-Employed

Self-employed individuals pay fixed-rate contributions regardless of their income, based on 60% of the forecasted average monthly wage.

• If annual income (previous year) ≤ PLN 120,000, contributions may be based on actual earnings (subject to conditions).
• New businesses receive relief:
  • First 6 months: No social security contributions.
  • Next 24 months: Reduced “preferential contributions.”

Health Insurance Contributions

• 9% of the assessment base (gross income minus social security contributions).
• No cap on contributions.
• Non-deductible for tax purposes.

Entrepreneurs (New rules from 2022)

Health insurance contributions depend on the taxation method:

Health Insurance Contribution Deductions (Effective July 1, 2022)

Entrepreneurs can deduct health insurance contributions as follows:

• Flat Tax (19%): Up to PLN 11,600 in 2024
• Lump-Sum Tax: Up to 50% of contributions deducted from the tax base
• Tax Card Users: Up to 19% of contributions deducted from the tax

Personal Income Tax

Poland applies a progressive Personal Income Tax (PIT) system, meaning tax rates increase with income levels. Tax residents are subject to PIT on their worldwide income, while non-residents pay tax only on income earned in Poland. The system also includes a tax-free allowance and a progressive rate structure to ensure a fair distribution of tax burdens.

Tax Residency Rules

• Polish tax residents are taxed on their worldwide income.
• Non-residents are subject to PIT only on income earned in Poland.

Personal Income Tax Rates

Tax-Free Amount

• The first PLN 30,000 of annual income is tax-free.
• For income up to PLN 120,000, PIT is calculated as 12% minus PLN 3,600.
• For income above PLN 120,000, the PLN 10,800 base tax already includes the tax reduction.