Poland is one of the most popular countries for permanent residence among European countries. The proximity to Ukraine, a similar culture, and a fairly simple language combined with quite European opportunities make Poland one of the most popular destinations for relocation. But if before many people went to Poland “to earn money”, in 2022 this country began to interest those who are engaged in freelancing. Why has the opportunity to work remotely in Poland become so attractive? Let’s find answers to this and many other questions related to remote work and legalization in Poland in this article.
- Tax peculiarities: What taxes do freelancers in Poland have to pay?
- What earnings are not taxed in Poland, and where is your income recorded?
- Freelance taxes in Poland: how and where to pay, how to take into account?
- Illegal labor: What happens if you freelance in Poland illegally?
- Starting in a new country: how does a freelancer move to Poland?
- Where do I start when I move?
- How do I get a residence permit?
- Relocation conditions for Ukrainian freelancers
- Where can a freelancer look for orders in Poland?
- Pros and cons of working remotely in Poland
- How much do freelancers in Poland earn?
Tax peculiarities: What taxes do freelancers in Poland have to pay?
First of all, let’s talk about taxes, because it is taxation and its peculiarities that determine successful business development and income in the new country. Freelancers in Poland must pay taxes if they stay in the country legally as a resident (more than 183 days per year). There are several forms of taxation in this country. In terms of the peculiarities of the tax legislation of the Republic of Poland, a freelancer-relocate should keep in mind a few simple rules:
- You have two options how to organize your work legally as a remote worker: you can register a sole proprietorship (in Polish it is called jednoosobowa działalność gospodarcza) or work through an intermediary. The second option assumes that you take orders from an intermediary company or register a civil contract with a business incubator, and he is already calculating taxes and writing them off for you.
- As a freelancer, you have to record your income and file your tax return every year in April. In addition to the tax itself, you also have to pay 30 percent of your income into the pension fund and as a contribution to your health insurance policy.
- Do not forget that if you continue to take orders from foreign companies or work under contract with them, the income from this type of activity must also be taken into account in your declaration in Poland. This income goes under “income from abroad” and is taxed on it, just like freelancing income for Polish companies.
What earnings are not taxed in Poland, and where is your income recorded?
The taxation system in Poland is quite loyal. In particular, if you earn a small income as a freelancer, you can get a break from the state and will be exempt from paying income tax. In 2023, the maximum tax-free income is 30,000 PLN per year. That means that if you only moonlight remotely and do not have a full-time job as a freelancer, you will not have to pay tax.
You can work as a freelancer, e.g. doing copywriting, running a so-called unregistered business activity.
As the name itself indicates, you do not need to obtain any additional documents (to assign a REGON number, register in registers), the only condition is that your earnings must not exceed half of the minimum wage in Poland (since January the minimum wage is 3490 PLN per month).
You are also required to keep your own books, but with unregistered business activities, the accounting is that you need to keep a notebook in which you will record your income and expenses, in case of inspection. If you exceed half the minimum wage, then you need to open a sole proprietorship or company.
The main thing to remember is that regardless of whether you have registered business activities or not, at the end of the year you have to mention it in the declaration, in the column “other sources of income.
This is all the more convenient for relocates from Ukraine, Moldova or Belarus, as many freelancers move to Poland to provide themselves and their loved ones with comfort and security, while maintaining their working contracts or relationships with clients. In this case it is worth bearing in mind that you can pay taxes on income from working with domestic customers in their native country – Poland has concluded double taxation treaties with Ukraine, Moldova and Belarus. So this amount you can not indicate in your Polish declaration.
And, of course, do not forget that even if you filed a tax return with a total annual income of less than 30,000 zlotys, you will still have to pay the aforementioned health insurance premiums and the pension levy, in money terms, taking into account fees and charges, the monthly profit will be about 1,500 PLN.
Freelance taxes in Poland: how and where to pay, how to take into account?
Another good news for freelancers who are going to legalize in Poland is the flexibility and variability of the taxation system. Today, freelancers in Poland are required to pay income tax and pension tax. On average, they range from 10% to 30% of your income.
Understanding the types of taxation is useful in any case, especially if you plan to earn more than 1,500 PLN per month. In this case, you are better off either signing a contract (umowa o dzieło), and taxes will be calculated for you by the company for which you work on a tax scale (you will learn more about it below), or opening a PE and working on a b2b contract (and calculating taxes yourself, securing yourself for the lump-sum tax).
In this case you can choose the type of taxation yourself:
- Skala podatkowa (tax scale) is the most popular option for entrepreneurs and freelancers. If you earn up to 120,000 PLN per year, you pay 12% of the income received. If your income is higher, you pay 32% of the same amount above 120,000 PLN. By the way, husband and wife can pay taxes jointly, as a single household.
- Podatek liniowy (linear tax) – applies to all legal entities and is 19% of income.
- Zryczałtowany podatek (lump sum tax) – tax on turnover, the rate ranges from 2% to 17%, depending on your type of business.
It is much easier to decide on the type of income tax if you consult with specialist accountants. If you work through a business incubator, often the accounting department of such intermediaries uses the skala podatkowa form.
Illegal labor: What happens if you freelance in Poland illegally?
You can pay taxes in Poland either at the tax office where you live (you submit a standard tax return every year in April) or online. In the e-deklaracje service you will be able to submit an electronic declaration, the state itself will issue an invoice for the payment of taxes, and you will be able to pay it immediately.
But abusing the trust of the Polish state and tax evasion is not worth it. At least you face a fine of 301 to 60200 zlotys. The maximum penalty is imprisonment.
Starting in a new country: how does a freelancer move to Poland?
If you have seriously decided to relocate to Poland, you should prepare for the move properly. First of all, let us formulate your algorithm, which will help you quickly and painlessly start a new page of life.
- Decide on the future form of employment (contract with a firm, as an individual, business incubator, individual entrepreneur).
- Choose a place of residence.
- Look remotely for where you will be living. This is very important for almost all the paperwork.
- For foreigners (Belarusians, Moldovans) – you must first apply for a work visa and / or get a card of Pobytu – your main legal document for staying in the country.
- Get an individual tax number PESEL – this can be done immediately upon arrival in Poland in that Urząd gminy/Miasta where you will live. You need to fill out a form in Polish and present your passport for PESEL. It is issued free of charge.
- Getting a health insurance policy is a prerequisite for receiving medical services in the future.
- Open a bank account – It is best to choose a trustworthy bank and open an account with it as soon as you receive your PESEL. Remember that the bank may ask for the source of your income if a significant amount is deposited into your account.
And after that you can further define your path and start your history in Poland.
Where do I start when I move?
Of course, by choosing the city where you want to move to. If you are in the high-tech sector, the best choice is Warsaw, Wroclaw, Krakow and Szczecin – they are where the largest IT communities are formed and where the largest IT corporations have their offices. If visiting offices or working directly in an incubator is not critical for you, you can also consider out-of-town housing.
How do I get a residence permit?
It is very easy for a freelancer to apply for the Pobytu Card in Poland – it is enough to provide your work contract, under which your income will be more than 3100 zlotys per month. Usually, when working through a business incubator, obtaining a residence permit is included in the basic subscription package. In the first few years, the Pobytu Card will have to be re-issued (depending on how long it is issued – it can be renewed annually or renewed every 3 years).
If you are moving from a country that does not have a visa-free agreement with the EU, the procedure for applying is as follows:
- An invitation to work from your employer, intermediary or business incubator.
- Obtaining a work permit in Uząd Pracie – it is better to do it in advance, because in some voivodeships the procedure of obtaining it may take up to several months.
- Conclusion of an employment contract or individual entrepreneurial activity.
- Obtaining residence registration.
- Registration of insurance.
After that you can get a residence permit in Poland and become a tax resident of this country.
Relocation conditions for Ukrainian freelancers
For Ukrainians, moving to Poland in 2022 became even easier. First of all, after the war began, Poland became the No. 1 country in receiving forced migrants, and you can stay in the country legally even with a Ukrainian civil passport. If you do not want to apply for asylum – temporary protection, you can simply enter the country with a biometric passport, get PESEL and then formalize labor relations as you like.
Where can a freelancer look for orders in Poland?
One of the most important questions every freelancer asks is finding a job. If you are moving to Poland, you may be initially confused by the peculiarities of local freelancing. But it’s actually quite simple. Note that freelance jobs in Poland are not just the standard web design, development and programming. Often this category also includes representatives of the most diverse creative specialties – for example, videographers, screenwriters, motion designers, decorators, and sound engineers. So where to look for work for all of them?
- Way 1: Start looking for a job with a Polish-registered IT company from your country of origin. If you are a highly specialized IT specialist, it is likely that you will be invited to work on a contract. This option is especially advantageous for married couples, because with such a contract you can apply for a “Blue Card” – a visa for valuable professionals, on the basis of which you and your family can leave and live legally in Poland.
- Way 2: Apply to a business incubator and work with customers through it. This allows newcomers to better adapt to a new country, get stable orders for their remote work, and not to be bothered with taxes. The disadvantage of this option is the incubator fees (subscriptions), but taxes may be lower – if you work under a contract with the transfer of intellectual property rights you produce to the business incubator, the tax rate for you may be less than the standard 12%.
- Way 3: use the services of numerous freelance exchanges, which are present in the Polish market. International freelance exchanges (Upwork, Fiverr, 99designs, Toptal) as well as local freelance exchanges such as Oferia.pl and Rocket Jobs operate in the country. Moreover, if you have a good command of Polish, you can even search for freelance orders on the local OLX portal. But in this case, you should register your individual entrepreneurial activity beforehand, so as not to be “outside the law”.
Pros and cons of working remotely in Poland
How much do freelancers in Poland earn?
According to Useme research, wages on the freelance market in Poland are steadily increasing. The percentage of people earning more than 5,000 PLN per month has increased again – up 45% from the previous year. Over the past year, more than half of freelancers (52.4%) reported an increase in their income, while 31.5% reported it had remained the same.
Here, as in the case of full-time work – the best salaries in the IT-industry – 20% earn from 5 to 10 thousand zlotys “on hand”, and 26% of specialists and above this amount. Another industry with the best salaries is consulting (35% receive 5-10 thousand zlotys).
Other industries in which freelancers can boast high earnings are translation services, photography with video and animation, as well as positioning (SEO and SEM). Over 5000 PLN “on hand” in these groups earn 17%, 16%, and 16% of respondents, respectively.
Poland is one of the most loyal countries to freelancers. Here you can both continue your work activities and keep your old connections, and start your life with a new leaf. A convenient feature of freelancing in Poland is the variety of options for legalizing your business. You can either open a sole proprietorship or sign a contract with an intermediary or a business incubator. Of course, like in other EU countries, Poland is very sensitive about taxation. But if you have overcome the initial difficult stage of drawing up all the documents to become a full-fledged resident of the country, then you will have a comfortable working and tax environment. Today Poland is actively introducing digital products for its citizens, which means that it is likely that freelancers next year will be able to submit declarations, pay taxes and solve all bureaucratic issues simply in their smartphone, using modern technology, and this is doubly convenient for the newly arrived relocators.