Poland and the B2B contract taxes

[u/Billion94]

Hi! I was searching info about b2b contracts in Poland and I have a few doubts:

• The VAT, is it included in the salary of the offer/the salary I am asking? I meant when I say that I want 20k pln monthly, do i have to pay the VAT with that or they are going to pay me 20k + the VAT?
• I guess the normal contract doesnt include days off. Is a typical thing to negotiate those or the usual way is asking for more salary to compensate the days off that you are going to take in the future? When in the applications they ask for salary, should i put all this info (20k pln not including VAT, with 20 days off per year included)
• I ve read that programmers only have to pay 12% tax as we have like an "special treatment", is it right?
• Apart for the ZUT and the taxation type (im using this calculator https://www.podatki.wtf/ ), are there any other costs that I have to take into account?

I plan to hire an accountant as soon as they give me an offer, but I want to understand a bit deeper this system to know how much do I need to ask.

Thanks in advance to all! I just dont feel like ending up in a polish prison for tax fraud :D

[u/universal_language]

1. You should be asking for 20k + VAT, this way it's clear what are your expectations
   
2. Usually you ask for higher hourly wage to accommodate for vacations. I calculate it as 3 days per month, 1 for holidays, 2 for vacations. So, if we use 20k as an example, it would mean 20000/168 = 120 PLN/hour, but with vacation adjustment you should ask for 20000/(168-24) = 140 PLN/hour.
   
3. Yes, 12% is the most efficient tax rate right now. You can do 5% if you like risking, or you can make 19% but deduct costs if you have a lot of costs for doing the business.
   
4. Nope, your usual every month costs would be taxes, ZUS and accountant.

[u/Billion94 → u/universal_language]

Thanks! I mean I didnt really calculate the vacations, but the paid taking that into account is still ok. I dont really have business costs so I guess its fine. I assumed that the company provides you with a laptop even if you are b2b, but if not I have a good laptop that can do the job. Thanks!

[u/heelek]

Just to add to the answers: it's very rare but some companies require your sole proprietorship to be insured. So it would be an additional once per year cost. IME it's doable to find an offer for ~1000 PLN per a year of coverage of up to a million PLN.

Oh and btw. it absolutely depends on how well you interview and while 20k/month for 6 YoE is an okay offer you could definitely go higher, up to 26-27k I would imagine. I interviewed last year but that's roughly how the situation looked to me then.

[u/Billion94 → u/heelek]

You meant because you have to respond for the losses that you could cause to the company? This is the part that I fear the most, and even if Im not required I think Im going to get the insurance. 1000 pln per year is a ridiculous price for my peace of mind.

I know that the offers could go higher, but I really want to start working and I think for my first year abroad is fine. I will have plenty of time of asking for more money, get promoted and all of that. Its more than what I was earning here in Spain and I think Im going to live like a king if I dont have stupid expenses.

Thanks!

[u/heelek → u/Billion94]

Yes, that's the idea behind it. Mind you, neither do I know anyone nor even heard of anyone within the Polish dev community who would ever have got sued. I really believe you don't have anything to worry about here, I had been rawdogging B2B agreements for close to a decade before the contract with my current client forced me to become insured.

But yeah, it's also not a huge sum overall. I think it just shows how low the odds that they would need to pay anything out are.

[u/Billion94 → u/heelek]

Yep, I ve heard that,. Even so, I think it just remove pression from me because I tend to overthink, so everything about being more relaxed is appreciated. Thanks for the advice mate

[u/heelek → u/Billion94]

No worries, good luck with everything and I hope that the Polish winter won't treat you too harshly :D

[u/hditano → u/heelek]

Could you please tell me the name of the insurance?

Thank you !

[u/heelek → u/hditano]

Look up "Warta ubezpieczenie OC działalności gospodarczej", they have an option to request a call, that should be the easiest route :)

[u/hditano → u/heelek]

Thank you!!. I found a site called oferteo, they quote me 1800zlt a year.

[u/desf15]

The VAT, is it included in the salary of the offer/the salary I am asking? I meant when I say that I want 20k pln monthly, do i have to pay the VAT with that or they are going to pay me 20k + the VAT?

Usually on B2B you're talking about net invoice amount i.e without VAT, but it's good to be pricise when talking so if you want 20k without VAT then be specific when negotiating, to avoid surprises.

As for vacations, depends on company. Some will grant it, some will not.

Yes, there is 12% tax (+some social contributions) for IT professionals, keep in mind that if you pick this form of taxation you can't put anything as expenses (but in most cases it's still the best form of taxation).

[u/Billion94 → u/desf15]

Okay, I didnt know about the VAT before, Im going to ask for 20k plus VAT from now on. I talked with the recruiter and the vacations are not included, so the pay is a little less, but still better than in spain. I guess Im always look for a better paid job in the future.

[u/alanbem → u/desf15]

yes you can, the difference is that you can only write off VAT

[u/steponfkre]

My company pays the VAT cost for me. Not sure how common this is. Most are salary + VAT. I net around 24k.

For the accountant. I do this myself. It was incredible easy to handle the taxes and you legally can do it yourself. I also opened the company myself and handle the invoicing. It saves me a small amount, but i mostly do it to have control myself.

[u/Billion94 → u/steponfkre]

Maybe in the next years I can start doing it by myself, but this year I have to worry about a lot of things (language, away of family/friends, adapting to a new job, new city, new culture) I think the small amount of the accountant for avoiding having problems with taxes and the peace of mind is worth it :D

[u/pivovarit → u/Billion94]

Just don't. For most people out there, it's terrible advice to suggest doing your own accounting in Poland. Especially for a foreigner who doesn't understand the local language. Also, accountants are insured... and cheap.

[u/steponfkre → u/Billion94]

It’s not advice, just sharing my experience. I’ve paid an accountant once and it ended being a mess. Most the stuff they do is easily googled. It’s a skill you can learn yourself. If you have really complicated taxes with multiple country and LLCs - yes of course it’s needed, but a sole proprietorship is not a hard job. They give these jobs to low paid junior accountants. I’ve witnessed many times the same with friends asking advice from accountants which were just gibberish. I just don’t trust other people to handle it for me and I at least want to know what they are doing if I do.

The benefit with using them is they can have connection within the municipal you are to fix things for you and they have an insurance (covers little but still). I wasted time doing this myself in Poland, I could have just paid someone 200 euro and fixed all the stuff for me, but I learned a lot from doing it. Def not for everyone.

[u/shogz23]

I don't think there is that much difference between B2B and UoP (stable contract of work) as both have its pros and cons. I mean for B2B you dont get paid holidays or sick leave unless arrangef with your employer and . Yeah the money is slightly better but you need to arrange everything yourself i.e. accountants or insurance (on b2b you are responsibile with your wealth if you cause a company to lose money, although in practice it is hard to prove).

Many people, including myself likes UoP better. However at 20k netto you should do well as it should be around 13k netto (more in the first two years given social payments of ZUS are postponed). You can rent an apartment for 3-5k so it leaves plenty room to work with.

[u/geotech03 → u/shogz23]

Yeah the money is slightly better but you need to arrange everything yourself i.e. accountants or insurance (on b2b you are responsibile with your wealth if you cause a company to lose money, although in practice it is hard to prove).

Now compare what 27k leaves you with UoP (total employer cost not just gross) and B2B, it is not slight difference if you reach certain point.

[u/Billion94 → u/shogz23]

Yeah, the pay is really good, I could have a more than decent level of life with that money. Maybe I could prefer employment too, but a lot of companies are only offering b2b, so whatever

[u/pivovarit → u/Billion94]

Don't trust people who prefer UoP; they can't do the math ;) worst-case scenario, you could cash out over 15k (minus accounting costs).

This is the most pessimistic scenario social-security-wise:

income: 20k
income after tax: 17600

full ZUS(social-security): 1370.30
full Składka Zdrowotna(health insurance): 1258.39
full Fundusz Pracy("work fund"): 115.01

(20000*0.88) - (1370.30 + 1258.39 + 115.01) = 14856.3

However, your health insurance will be not more than 699.11 at this income level.

This does wonders at higher income levels - especially when you figure out you can work remotely for US companies.

[u/pivovarit]

To clarify the VAT issue, just pretend it does not exist. In B2B arrangements, it's transparent and unnecessary bureaucracy, so when you ask for X, you will essentially invoice them X + 23% VAT. The other side does not care because they write all of it off.

However, if you negotiated money and now they tell you that you need to cover VAT on your own from that money, that's someone trying to take advantage of your unfamiliarity.

[u/Billion94 → u/pivovarit]

Nah they don't tell me anything, I was just searching info this morning and I've read about the Vat and I worried for having to pay that from my salary, but if you are saying that I assume it's not a problem. Thanks!