Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.
For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.
For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.
As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.
While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.
A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.
Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Poland can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Poland, you have to:
If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Poland.
An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.
An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.
Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.
At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.
Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:
Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.
Paying employees in Poland is not the same as paying workers in your own country. Employees have to be paid using Poland's employment and payroll standards.
This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.
Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.
After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:
One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.
Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.
Outside of EORs acting as the full admin employer, many also provide remote payroll.
For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.
We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.
Full time employment is considered 8 hours per day and 40 hours per week.
Hours worked above 8 hours per day and 40 per week are considered overtime. Weekly working hours including overtime cannot exceed 48 hours. Annual overtime cannot exceed 150 hours.
Employees will be compensated for overtime as follows:
200% for overtime work performed:
150% for overtime work performed:
Instead of paying for overtime employers may grant the employee time off work.
Employee Income Tax
Salaries are paid on monthly basis and employees must receive their salary no later the 10th of the following month.
A full-time employee is entitled to 20 days of paid annual leave per year if employed with the same employer for less than ten years.
An employee is entitled to 26 days of paid annual leave once they have been in the same employment for more than ten years.
Unused annual leave days can be transferred to the following year but must be taken by September 30 of the following year. It is forbidden to pay employees for not taking their leave, except upon termination of employment.
13 public holidays.
Sick leave pay varies based:
Mothers are entitled to 20 weeks of maternity leave and can take up to 6 weeks prior to giving birth. Mothers are entitled to maternity leave regardless of the length of service with the current employer.
In addition, parents are entitled to 32 weeks of parental leave that can be granted to any of the parents. The leaves are at a rate of 100% for the first 26 weeks and at a 60%rate for the remaining weeks paid by the Social Security Institution (ZUS).
Employees that use both maternity leave and parental leave will receive an 80% allowance for the entire leave.
Parents are entitled to 36 months of unpaid leave until the child reaches the age of 6.
Child leave – 2 days or 16 hours to take care of a child that is 14 years old or less.
2 days leave for: employee’s child’s birth.
1 day leave for: employee’s child’s wedding.
Disability Leave: A person classified as having a severe or moderate degree of disability is entitled to an additional ten days of annual leave.
Military Leave: Employees are entitled to unpaid military leave to perform their duties.
The employee is entitled to leave of 1 day for the marriage of his or her child.
The employee is entitled to leave of 1 day for the death and funeral of his or her sister, brother, mother-in-law, father-in-law, grandmother, grandfather or any other person supported or directly care for by the employee.
Employment can be terminated by:
Notice during the probation period:
3 working days’ notice – if the probationary period is up to 2 weeks;
1-week notice – if the probationary period exceeds 2 weeks;
2 weeks’ notice – if the probationary period exceeds 3 months;
Notice for Temporary or Permanent employment:
2 weeks – if the employee was employed for up to 6 months;
1 month – if the employee was employed more than 6 months and less than 3 years;
3 months – if the employee was employed for 3 years or more.
Severance Pay Severance payment is given by employers who have at least 20 employees and the dismissal of the employee is through the fault of the employer.
1-month severance pay – less than 2 years of employment.
2 months’ severance pay – between 2 and 8 years of employment.
3 months’ severance pay – over 8 years of employment
No longer than 3 months.