Businesses planning to hire new staff need a clear picture of every component of the total cost of employment. In 2026, with the rise in the minimum wage, the minimum cost of employing workers under an employment contract (umowa o pracę) went up as well, and from 1 January 2027 it will rise again. The cost of employment is not just the gross salary paid to the employee, but also social insurance contributions, contributions to statutory funds and payments to Employee Capital Plans (PPK, Pracownicze Plany Kapitałowe).
Employers are often unaware of the real financial burden of employment. The difference between the net pay the employee receives and the actual cost borne by the company can be significant. Proper planning of employment costs allows you to manage the payroll budget effectively and make informed business decisions. Payroll, ZUS contributions and employee tax forms can be handed over to us as part of our HR and payroll services.
Components of the total cost of employment under an employment contract
The total cost of employing a worker under an employment contract consists of several main elements. The core component is the employee's gross salary, which is the largest part of the cost. In addition, the employer bears social insurance contributions financed by the company, contributions to statutory funds and payments to Employee Capital Plans.
The employer bears an additional financial burden of more than 20% of the employee's gross salary in social insurance contributions and statutory fund contributions. This means that for a gross salary of PLN 5,000, the real cost of employment is about PLN 6,000
Social insurance contributions financed by the employer cover pension, disability and accident insurance, as well as contributions to the Labour Fund (Fundusz Pracy, FP), the Solidarity Fund (Fundusz Solidarnościowy, FS) and the Guaranteed Employee Benefits Fund (FGŚP). These contributions are set as a percentage of gross pay and are a fixed element of employment costs.
Payments to Employee Capital Plans are also a significant cost, which the employer must finance for employees taking part in the scheme. The employer's basic contribution is 1.5% of gross pay, and the additional contribution – if the employer declares one – is up to 2.5% of pay.
The employee's salary as the main employment cost
The employee's gross salary is the largest component of the total cost of employment. In 2026, the minimum wage is PLN 4,806 (PLN 4,666 in 2025), and from 1 January 2027 it will be PLN 4,950. The employer cannot set pay below this amount for full-time employees.
For part-time employees, the minimum wage is set in proportion to the working time. This means that an employee working half-time must receive at least half of the minimum wage.
An employee's gross salary covers all pay components before social insurance contributions and income tax are deducted. The employee's social insurance contributions, the health insurance contribution, the income tax advance and PPK payments are deducted from gross pay
The social insurance contributions deducted from the employee's pay are pension insurance of 9.76%, disability insurance of 1.50% and sickness insurance of 2.45%. In addition, a health insurance contribution of 9.00% is collected, calculated on pay reduced by the employee's social insurance contributions, and it cannot be deducted from tax. These contributions are financed by the employee and reduce their net pay.
The income tax advance is calculated using the tax scale: 12% on income up to PLN 120,000 a year and 32% on the excess. Revenue is reduced by social insurance contributions and tax-deductible costs (PLN 250 a month, or PLN 300 when commuting from another town), and after the employee files a PIT-2 form (statement allowing the employer to apply the tax-reducing amount), the advance is reduced by PLN 300 a month (1/12 of the tax-reducing amount). The employer's PPK payments are the employee's revenue and increase the base for the advance. Some employees can benefit from tax exemptions, which increases their net pay.
ZUS contributions financed by the employer
The employer bears significant costs in social insurance contributions financed by the company and paid to ZUS (Social Insurance Institution). These contributions are an additional employment cost that must be taken into account when planning the payroll budget. The contributions are set as a percentage of gross pay and cover various types of insurance.
| Type of insurance | Rate | Calculation base |
|---|---|---|
| Pension | 9.76% | Gross pay |
| Disability | 6.50% | Gross pay |
| Accident | 1.67% | Gross pay |
| Labour Fund and Solidarity Fund | 2.45% (1.00% + 1.45%) | Gross pay, if it is at least the minimum wage |
| FGŚP | 0.10% | Gross pay |
The accident insurance contribution depends on the size of the contribution payer and the type of business. A payer reporting no more than 9 people for accident insurance pays 1.67%. With at least 10 insured persons, ZUS sets the rate based on the business activity group and the company's accident indicators, so it may be higher or lower than 1.67%.
Contributions to the Labour Fund, the Solidarity Fund and the Guaranteed Employee Benefits Fund are not paid for all employees. None of these contributions is paid for women aged 55 or over and men aged 60 or over, and for 36 months no FP and FS contributions are paid for people returning from maternity leave, parental leave (urlop rodzicielski) or parental leave (urlop wychowawczy) – FGŚP is still paid
Exemptions from FP, FS and FGŚP contributions also cover employees aged 50 or over who were registered as unemployed for 30 days before being hired. The exemption applies for 12 months from the first month after the employment contract is concluded.
Young workers under 30 referred to the job by the District Labour Office (Powiatowy Urząd Pracy) can also benefit from the exemption from statutory fund contributions for 12 months. These exemptions reduce the total cost of employment for certain groups of employees.
Employee Capital Plans in employment costs
Employee Capital Plans are an additional element of employment costs that the employer must include in its calculations. PPK is voluntary for employees, but the employer has no influence on the decision to participate. People who have turned 18 but are not yet 55 and are covered by pension and disability insurance are enrolled automatically – after 3 months of employment; people aged 55–69 join only at their own request. What happens to contributions when a company changes its legal form is explained in our article on PPK when the employer restructures.
PPK payments financed by the employer include a basic payment of 1.5% of gross pay and an optional additional payment of up to 2.5%. The employer decides on the additional payment in the PPK management agreement – it does not depend on whether the employee has declared their own additional payment.
Employees can opt out of PPK by submitting a declaration of resignation from payments. In that case – as with people who are not enrolled in PPK – the employer bears no costs related to Employee Capital Plan payments
Employees taking part in PPK finance a basic payment of 2% of gross pay and an optional additional payment of up to 2%. Employees with low pay, not exceeding 1.2 times the minimum wage, can reduce their basic payment to 0.5%.
PPK payments are deducted from the employee's pay and transferred, together with the employer's payments, to the selected financial institution managing the fund. The employer must keep records of payments and transfer the funds within set deadlines.
Examples of calculating the total cost of employment
A practical calculation of the total cost of employment must include all cost components. Cost differences depend on the amount of pay, the employee's age and participation in Employee Capital Plans. Below are detailed calculation examples for different employment scenarios (2026 rates, accident insurance rate 1.67%).
Example for a salary of PLN 10,000
An employee on an employment contract who is over 26, takes part in PPK with additional payments (employer 2.5%, employee 2%), works in the town where they live and has filed PIT-2, generates the following costs at a gross salary of PLN 10,000:
- Employer's social insurance contributions: pension insurance PLN 976, disability PLN 650, accident PLN 167
- Statutory fund contributions: Labour Fund PLN 100, Solidarity Fund PLN 145, FGŚP PLN 10
- Employer's PPK payments: basic payment PLN 150, additional payment PLN 250
- Total cost of employment: PLN 12,448
At a gross salary of PLN 10,000, the total cost of employment is PLN 12,448, which means an additional burden on the employer of PLN 2,448. The employee takes home PLN 6,699.39 after all contributions, tax and their own PPK payments (PLN 400) are deducted
The employee's social insurance contributions are pension insurance PLN 976, disability PLN 150 and sickness PLN 245, totalling PLN 1,371. The health insurance contribution is PLN 776.61 (9% of PLN 8,629), and the income tax advance is PLN 753 – calculated on a base of PLN 8,779, which also includes PLN 400 of employer PPK payments.
Example for a young employee
An employee under 26 who does not take part in PPK generates lower employment costs at a gross salary of PLN 5,000. Until the age of 26, revenue from an employment contract is exempt from income tax up to PLN 85,528 a year (relief for young people), which affects net pay.
The employer's social insurance contributions are: pension insurance PLN 488, disability PLN 325 and accident PLN 83.50, totalling PLN 896.50. Statutory fund contributions: Labour Fund PLN 50, Solidarity Fund PLN 72.50, FGŚP PLN 5.
The total cost of employment is PLN 6,024, with net pay of PLN 3,926.19. With no income tax, the difference between gross and net pay is smaller than for older employees.
Example for a part-time employee
An employee working a quarter of full time, not taking part in PPK, receiving a retirement pension and aged 60 or over, generates proportionally lower costs at a gross salary of PLN 1,800. The exemption from statutory fund contributions does not result from the pension itself but from age (women from 55, men from 60), and FP and FS contributions are also not paid when pay is below the minimum wage.
For an employee aged 55+ (woman) or 60+ (man), the employer pays no contributions to the Labour Fund, the Solidarity Fund or FGŚP, which lowers the total cost of employment. At a salary of PLN 1,800, the total cost is PLN 2,122.74
The employer's social insurance contributions cover only pension, disability and accident insurance, totalling PLN 322.74. A working pensioner is covered by this insurance just like other employees. No FGŚP contribution means a saving of PLN 1.80 a month – FP and FS contributions would not arise anyway, because PLN 1,800 is less than the minimum wage.
Minimum employment costs in 2026
In 2026, the minimum wage rose to PLN 4,806, which directly affects the minimum cost of employing workers. From 1 January 2027 it will be PLN 4,950 – employer costs will then rise again, and their exact amount also depends on the fund contribution rates set in the 2027 Budget Act.
At the minimum wage, the total cost of employing an employee taking part in PPK is PLN 5,862.37. This consists of gross pay of PLN 4,806 and employer contributions and payments of PLN 1,056.37.
A manufacturing company employing 50 workers on the minimum wage must spend PLN 293,118.50 a month on employment costs. Compared with 2025 (PLN 284,579.50), this means an increase in personnel costs of PLN 8,539 a month, or about PLN 102 thousand a year, which requires proper financial planning.
A detailed breakdown of minimum employment costs:
- Gross pay: PLN 4,806
- Employer's pension contribution: PLN 469.07
- Employer's disability contribution: PLN 312.39
- Employer's accident contribution: PLN 80.26
- Labour Fund and Solidarity Fund contributions: PLN 117.75 (48.06 + 69.69)
- FGŚP contribution: PLN 4.81
- Basic PPK payment: PLN 72.09
The employer's total burden from contributions and payments is 21.98% of gross pay at the minimum wage. This means an additional cost of PLN 1,056.37 a month for each employee taking part in PPK
Additional costs of employing a worker
Apart from the direct costs of pay and contributions, employers also bear additional costs related to employing staff. These costs are often left out of calculations, but they can significantly affect the company's total payroll budget.
Onboarding costs for a new employee include:
- Paying for medical examinations and health and safety (BHP) training
- Training the employee for the job
- Integrating them into the company's organisational structure
- Developing professional qualifications
- Preparing the workstation and tools
Ongoing employment costs relate to:
- Ensuring safe and hygienic working conditions
- Costs related to employee absences
- Holiday pay and sick pay
- Cover during absences
- Workwear and personal protective equipment
Additional employment costs can be a noticeable part of the payroll budget – their amount depends on the industry and the position. They include all expenses related to ensuring appropriate working conditions and costs related to employee absences
When employing foreigners, additional costs include obtaining work permits, translating documents and any costs of help with formalities. These costs can be significant, especially when hiring workers from outside the European Union.
Some companies also offer additional employee benefits, such as:
- Meals or meal allowances
- Group insurance
- Sports cards or other non-wage benefits
- Training and courses to improve qualifications
- Incentive schemes and discretionary bonuses
Cost of employment under civil law contracts
Civil law contracts are an alternative to employment contracts, often with lower employment costs. The amount of the costs depends on the type of contract and the personal situation of the contractor.
Contract of mandate
The cost of hiring under a contract of mandate (umowa zlecenia) depends on whether it is the person's only source of employment. If the contract of mandate is their only source of income, the costs are similar to an employment contract – they include gross pay and ZUS contributions financed by the principal.
For people also employed at another company whose pay is at least the minimum wage, the principal's cost is limited to gross pay alone. Having no obligation to pay social insurance contributions significantly reduces the total cost of employment – however, the health insurance contribution is still deducted from the contractor's pay. Exception: if the contract of mandate is concluded with the person's own employer or performed for that employer, contributions are calculated as on pay from employment.
Students under 26 hired under a contract of mandate are not subject to ZUS contributions, which means the cost of employment is limited to gross pay alone. This solution is particularly beneficial for employers hiring young workers
Contract for specific work
A contract for specific work (umowa o dzieło) has the lowest employment costs, because it does not involve an obligation to pay ZUS contributions. The cost is limited to the contractor's gross pay.
The exception is when a contract for specific work is concluded with the person's own employer – in that case, social insurance becomes compulsory. In other cases, a contract for specific work does not generate any additional costs beyond the pay.
Comparison of the costs of different forms of employment
Choosing the right form of employment has a significant impact on the total costs borne by the employer. The cost differences between the various forms of employment can be significant and should be taken into account when deciding how to hire.
| Form of employment | ZUS contributions | Statutory funds | PPK | Additional costs |
|---|---|---|---|---|
| Employment contract | Yes | Yes | Yes | Holidays, sick pay |
| Contract of mandate - only source | Yes | Yes | Yes | None |
| Contract of mandate - additional | No | No | No | None |
| Student under 26 | No | No | No | None |
| Contract for specific work | No | No | No | None |
An employment contract generates the highest employment costs but gives the employee the greatest stability and legal protection. The employer also bears costs related to holidays, sick pay and other employee benefits.
Civil law contracts make it possible to reduce employment costs, but they do not provide the same legal protection as an employment contract. The choice of the right form of employment should take into account both costs and the nature of the work and the company's needs.
The cost difference between an employment contract and a contract of mandate for a student is about 20.5–22% of gross pay (without PPK or with the employer's basic PPK payment). At a salary of PLN 5,000, this means a saving of about PLN 1,024–1,099 a month
Planning the payroll budget
Effective payroll budget planning requires a detailed understanding of all components of employment costs. Employers should take into account not only current pay and contribution costs, but also future changes in the law and additional costs related to employment.
When planning the budget, take into account:
- Expected changes in the minimum wage
- Possible changes in ZUS contribution rates
- Costs related to staff turnover
- Seasonal fluctuations in employment
- Costs of training and employee development
A medium-sized company employing 20 workers on a gross salary of PLN 6,000 bears monthly employment costs of about PLN 146,000 (with the employer's basic PPK payment). Over a year, this means spending more than PLN 1.7 million, a significant item in the company's budget that requires careful planning and monitoring.
Monitoring employment costs should include:
- Regular analyses of the personnel cost structure
- Comparing the costs of different forms of employment
- Assessing the effectiveness of investment in employees
- Planning long-term staffing needs
- Optimising HR processes in terms of cost
Employers should regularly analyse the structure of employment costs and look for ways to optimise them. This may include using exemptions from ZUS contributions, choosing appropriate forms of employment and managing working time effectively
