On 1 December 2022 the Polish Sejm, the lower house of the Polish Parliament adopted a draft law amending the Labour Code in Poland. The amendment has changed the status of remote work in Poland to a permanent option, rather than one applicable just in relation to the COVID-19 pandemic. The new regulations will enter into force on 7 April 2023.
Remote work in Poland: 24 days a year
Remote work in Poland will be performed fully or partially in the place indicated by the employee and approved by the employer. For all employees, there is a limit on the number of days in a year when work can be performed remotely. This limit has been set at 24 days. For some employees (e.g. parents raising children under four years of age), remote work is unlimited as long as it is compatible with their type of work.
To duly implement remote work in Poland, it is crucial to assess the opportunities and challenges for a given employer, prepare internal regulations, review employment contracts and take care of training.
Tax impacts of the new labour rules
In terms of tax impact, employers will be required to:
- provide the materials and tools necessary for remote work; or
- pay cash compensation or a fixed sum for the employee to use their own personal tools.
The provision of tools and materials or the payment of compensation or a fixed sum to the employee by the employer as per the above may not lead to the generation of any additional taxable income for the employee.
However, questions have already been raised about how to calculate the compensation and the fixed sum so that it is tax free. The amount should correspond to the employee’s estimated costs of working remotely. According to the Polish law, major items to be taken into account in such an estimation are standard wear and tear of materials and tools, including technical equipment, their documented market prices, the quantity of materials used for the employer’s purposes, the market prices of the materials, as well as standard consumption of electricity and costs of telecommunication services.
Employers’ organisations have already asked for official guidelines regarding compensation for employees and other aspects of the new law.
Increased mileage rates in Poland
Apart from the changes to the status of remote work in Poland, due to the Infrastructure Minister’s regulation on 22 December 2022 to rules on business trips have been amended in Poland, too. Consequently, after 15 years without changes, the per-kilometre rates were increased on 17 January 2023 to reach the following caps:
- PLN 0.89 (previously PLN 0.5214) for passenger cars with an engine cubic capacity of up to 900 cm3
- PLN 1.15 (previously PLN 0.8358) for passenger cars with an engine cubic capacity of more than 900 cm3
- PLN 0.69 (previously PLN 0.2302) for motorcycles
- PLN 0.42 (previously PLN 0.1382) for mopeds
If an employee in Poland uses a private car during a business trip (in which case, the vehicle mileage record is obligatory), such an allowance is exempt from personal income tax and social security only up to certain limit according to the Polish PIT Act. The limit for a passenger car is as follows:
- For cars with an engine cubic capacity of up to 900 cm3 = PLN 0.89 (previously PLN 0.5214) × number of kilometres
- For cars with an engine cubic capacity above 900 cm3 = PLN 1.15 (previously PLN 0.8358) × number of kilometres
Thus, the tax-free allowances have just increased due to the change in the law.
A respective change has also increased the allowance limits for local travel, calculated as a fixed monthly sum or a sum based on mileage.
If you would like to know more about the new rules on business trips or remote work in Poland, or need any tax advice regarding the country please visit the homepage of WTS&SAJA Sp. z o.o., the exclusive representative of WTS Global for Poland and contact their experts.