The cost of hiring an employee in 2024 – from July to December, the employer pays an additional PLN 70

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The cost of hiring an employee in 2024 – from July to December, the employer pays an additional PLN 70

4,300 gross – what is the employer’s cost?

Starting in July 2024, the cost of hiring a worker at the national minimum wage has increased once again this year. The national minimum wage has been increased from PLN 4,242 to PLN 4,300 gross. Higher pay results in an increase in employer-funded contributions. So what is the cost for an employer to employ an employee at PLN 4,300 gross?

Cost of hiring a worker 2024 – national minimum

In addition to paying the employee remuneration for work, the employer is obliged to cover part of the insurance premiums:

  • social security contribution (9.76%),
  • disability contribution (6.5%),
  • accident contribution (from 0.67% to 3.33% depending on the nature of the company’s activity and the number of employees),
  • contribution to the Labor Fund (2.45%),
  • contribution to the Guaranteed Workers’ Benefits Fund (0.10%).

Therefore, the employer does not participate in the payment of contributions for health and sickness insurance. Comparing the percentages of contributions paid by the employer and the employee, it can be concluded that they are financed almost half – 22.71% by the employee, and from 19.48% to 22.14% (depending on the amount of the accident contribution that the employee is not financed at all) by the employer. The employee does not finance contributions to the PF and the Guaranteed Employee Benefits Fund.

Award:

Employee

Employer

pension

9.76%

9.76%

annuity

1.5%

6.5%

sick

2.45%

accident

0.67% – 3.33%

FP

2.45%

FGSP

0.10%

health

9%

9%

Total cost to employer from July to December 2024?

Employee-funded contributions are included in gross pay. However, in addition to the employee’s gross pay, the employer also has additional costs in the form of self-funded contributions. To calculate the total employer cost, contributions are added to gross pay in the amounts shown in the table above.

For an employee with a minimum wage employment contract, from July to December 2024, the employer will pay PLN 419.68 in pension contributions, PLN 279.50 in disability contributions, i.e. 1.67%, i.e. PLN 71.81 in accident contributions, PLN 105.35 in PF contributions and PLN 4.30 in Guarantee Fund contributions. Therefore, we add the employer-financed contributions to the minimum wage and get the result of PLN 5,180.64 (4,300 PLN + 880.64 PLN = 5,180.64 PLN).

From July to December 2024, the total cost of hiring a worker at the national minimum wage is PLN 5,180.64 (annual cost – PLN 62,167.68). This means that the employer, in addition to the salary, incurs additional costs amounting to approximately 17% of the full employment costs. When hiring an employee at the minimum wage, he must take into account costs that are much higher than the employee’s net remuneration. The employee will receive almost half of what the employer actually pays in relation to his employment.

For comparison, the total cost of hiring one worker at the national minimum wage from January to June 2024 was PLN 5,110.75 (annual cost – PLN 61,329). The increase in employer costs amounts to PLN 69.89. That’s almost PLN 70. Another increase in the minimum wage means… additional cost of PLN 419.34 per semester.

Polish solution on minimum wage goes against the essence of the directive

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