Gross-net earnings - how to calculate the salary

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The minimum remuneration for work in 2021 is PLN 2,800 gross. This means that it is the lowest possible remuneration that an employer can pay to an employee employed under a full-time employment contract. How much money will the employee get? It turns out that for many, the answer will not be easy. Because many Poles cannot explain the difference between gross salary and net salary. That's why we've decided to explain it in this article. Gross and net payout - see the differences.

What is included in the gross payout?

The total cost of employing an employee to be borne by the employer is the gross remuneration and social security contributions charged to the employer. Both types of receivables are tax deductible costs of the enterprise. ZUS contributions are deducted from the employee's salary as well as from the entrepreneur's pocket. In practice, they must be covered by the entrepreneur, he is responsible for paying the dues, the employee cannot avoid paying taxes and contributions. On the employment contract, the employee has gross earnings and the amount he gets on the account is much lower. Where is our money going? The employer is obliged to pay contributions from our salary for:

  • social security,
  • medical insurance,
  • income tax.

In order to convert remuneration from gross amount to net amount, it is worth using the remuneration calculator. The value of the deducted contributions is specified in the table below:

Type of contribution

Interest rates

The worker covers

Employer covers

for accident insurance

1,67%

-

1,67%

for sickness insurance

2,45%

2,45%

-

for disability insurance

8,00%

1,5%

6,5%

for retirement insurance

19,52%

9,76%

9,76%

The differentiation in interest rates is regulated by the provisions on social insurance against accidents at work and occupational diseases.

Calculate your salary and total employment cost and use our net-gross salary calculator.

How to calculate your net salary?

To answer the question of how to calculate your net salary, you should also subtract the health insurance contribution from your gross salary. The health contribution is 9%, calculated on the salary less social security contributions.

There is an exception to this rule. If the calculated contribution would be higher than the advance income tax, it should be reduced to the amount of the advance payment. Pursuant to Art. 83 sec. 1 of the Act on health care services financed from public funds, when the health contribution calculated by the payer is higher than the calculated tax, the calculated premium is reduced to the amount of the tax advance. This is the case with low-income workers. The health insurance contribution is deducted from the tax, in an amount not exceeding 7.75% of the assessment base, while the employee's remuneration is a health insurance premium of 9% of the assessment base.

Example 1.

The salary of a part-time employee is PLN 900 gross, how much will the health insurance contribution?
  • advance income tax payment was PLN 45.83,
  • we calculate the health insurance premium according to 9% - PLN 69.89 - the premium exceeded the advance payment for income tax, we reduce to the value of the advance, i.e. PLN 45.83,
The due advance on income tax for an employee is PLN 0.

How to calculate the advance income tax payment?

To calculate how much the advance income tax will be, you should:

  1. Deduct social security contributions from gross salary,

  2. then subtract the tax deductible cost from the amount obtained:
    - if the employee lives in the locality of the workplace - they amount to PLN 250,
    - if the employee lives outside the locality of the workplace - they are PLN 300,

  3. the amount is rounded to full zlotys - this is the basis for calculating the income tax,

  4. the basis for calculating the income tax should be multiplied by 17 or 32% depending on the tax threshold,

  5. then subtract the tax-free amount (PLN 43.76) - only if the employee has signed the PIT-2 declaration,

  6. the health insurance contribution is deducted from the tax calculated in this way, in the amount not exceeding 7.75% of the calculation basis.

In practice, there may be three situations in calculating the advance on income tax and health insurance contributions:

  • the health insurance contribution of 9% is lower than the advance tax,
  • health insurance in the amount of 7.75% and 9% is higher than the advance tax,
  • the health contribution of 9% is higher than the advance tax, and the contribution of 7.75% is lower than the advance payment.

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Scheme for calculating the remuneration

In order to better explain the method of calculating remuneration, it is worth analyzing the diagram below.

Example 2.

I have PLN 3,200 gross in the contract.How much will I really get paid?

The gross salary of PLN 3,200 will be divided as follows:

The basis of health insurance

PLN 2,761.28

Cost of getting income

PLN 250

The tax base

PLN 2,511.00

Tax

PLN 169.00

 

Pension Insurance (employee)

PLN 312.32

Disability Insurance (employee)

PLN 48.00

Sickness insurance (employee)

PLN 78.40

Medical insurance

PLN 248.52

 

Pension insurance (employer)

PLN 312.32

Disability Insurance (employer)

PLN 208.00

Accident Insurance (employer)

PLN 53.44

Insurance for the Labor Fund (employer)

PLN 78.40

Insurance for FGŚP (employer)

PLN 3.20

This means that the total cost borne by the employer hiring this employee is PLN 3,855.36. The net payment, i.e. the remuneration that will be credited to the employee's account, will amount to PLN 2,343.76.

The above calculation scheme allows to determine:

  • gross how much is the net amount, and
  • net how much is gross

It is worth noting that the gross remuneration also includes all:

  • bonuses,
  • additives,
  • overtime,
  • sick pay,
  • annual leave equivalent.

At the same time, it must be remembered that:

  • disability and retirement benefits,
  • allowances and reimbursement of business travel expenses,
  • jubilee awards,
  • clearance

are not subject to contributions.