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Comment by apa-sl | Hacker News Reader

In Poland when you want to hire someone "as it should be" with a proper work contract it is quite a pain in the ass for the employer. 1) Many rights for the empolyee, not so many for the employer, 2) VERY high real costs of employment (only ~40% of total employment costs lands in the hands of the employee to his/her disposal).

That's why many companies are using some "alternative" ways to hire someone still legally with much lower costs (10-25% employer costs including the salary) and more balanced rights for both sides of the contract.

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To compare:

That alternative way is verboten in Germany. If the Finanzamt finds out you will have to repay social taxes on your "contractor" and he will have the right to sue you to employ him properly.

AFAIK in Poland social security payments are mandatory for self employed people so it's no real difference if you are employed or a subcontractor - you still have health insurance, pay into pension funds, etc.

In Germany on the other hand only health insurance is mandatory for self employed people. So being a "subcontractor" with only one customer is treated like cheating the social net out of money. (Because even people who won't pay into the social net are protected by it if stuff gets serious).

Oh, btw. a question about the Polish tax system: I read that Poland has the option to opt into a 19% flat personal income tax. Is this of any practical use? My Polish is not up to reading legal texts so I couldn't find out what the drawbacks of this option would be.

I highly recommend comparing these numbers for Poland with numbers for other European countries. You'll find that Poland is on the cheaper end of the employment cost spectrum - that 40% figure (which is actually 38%) only refers to the cost of employing a minimum-wage worker, and it's not 38% that's taken home, it's 38% that's taken by government, and it's still lower than EU average.

As personal and corporate income taxes in Poland are quite low (again, compared to other European countries), combined with the fact that labor in Poland is extremely cheap (in EU, if I remember correctly, the labor is cheaper only in very poor countries like Latvia, Lithuania or Bulgaria), employing Poles and doing business in Poland is very cheap. It's very illuminating to compare the percentage of corporate income spent on worker wages in various countries -- companies spend very little on employees in Poland in general.

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