What Taxes Should a Temporary Employment Agency Pay?

What Taxes Should a Temporary Employment Agency Pay?

Temporary employment agencies, acting as intermediaries between employers and employees, are required to pay various taxes and contributions. It is worth knowing the details of these obligations in order to avoid problems with the tax office and social security institution.

Corporate Income Tax (CIT)

Temporary employment agencies that operate as commercial law companies are required to pay corporate income tax.

• CIT Rate

  The standard CIT rate is 19%, but for small taxpayers and new companies it can be 9% (up to a certain revenue limit).

• Tax Base

  The agency’s income, i.e. the difference between revenues and the costs of obtaining them, constitutes the tax base.

Value Added Tax (VAT)

Services provided by temporary employment agencies are subject to VAT.

• VAT Rate

  In most cases, the basic VAT rate of 23% applies.

• Registration Obligation

  Every agency with revenues exceeding a certain threshold must register as a VAT payer.

Social Security Contributions (ZUS)

Temporary employment agencies, as employers, are obliged to pay social security contributions for their employees.

• Social Insurance Contributions

  The agency pays contributions for pension, disability, accident and sickness insurance for its temporary employees.

• Contributions to the Labor Fund and FGŚP

  In addition, contributions must be paid to the Labor Fund and the Guaranteed Employee Benefits Fund (FGŚP).

Personal Income Tax (PIT)

Temporary employment agencies act as payers of income tax on the remuneration of temporary employees.

• PIT-2 and Tax Advances

  The remuneration paid to employees is reduced by advances on income tax, which the agency pays to the tax office.

• Obligation to Issue PIT-11

  At the end of the year, the agency is obliged to issue employees with a PIT-11 form, which enables annual settlement.

Real Estate Tax

If a temporary employment agency owns real estate, such as offices, it must pay real estate tax.

• Tax Base

  The tax is calculated on the usable area of the property.

• Local Rates

  Real estate tax rates are set by local authorities and may vary depending on the region.

Other Fees and Tax Obligations

Depending on the specifics of the temporary employment agency’s operations, additional fees or taxes may apply.

• Fee for Conducting Business Activity

  In some municipalities, there is a fee for conducting business activity.

• Tax on Means of Transport

  If the agency has vehicles with certain parameters, it may be required to pay tax on means of transport.

Summary

Temporary employment agencies are required to pay a number of taxes and contributions, such as CIT, VAT, PIT and social security contributions. In addition, they may be required to pay real estate tax and other local fees. Knowledge of these obligations is crucial for the proper functioning of the company and avoiding legal problems. It is worth consulting with a tax advisor to make sure that all obligations are properly fulfilled.