How to pay and manage Polish contractors: A practical guide

If you're paying independent contractors in Poland, you need to handle payment, understand VAT invoicing, and manage the contractor relationship within EU framework. The payment part is straightforward once you know the right method. The compliance part—understanding contract types, VAT invoicing, and currency preferences—is where most foreign businesses struggle.

This guide walks through what you actually need to do. Then we'll show you where Kontrable helps organize the work.

The main things you need to do

1. Use Wise or SEPA for payments. These are the cheapest and most reliable ways to pay Polish contractors. If you have a EUR account in the EU, use SEPA transfers—they're free or nearly free and take 1-2 days. If you don't have a EUR account, use Wise ($2-6 per transfer). PayPal costs $5-12 and has worse exchange rates. Traditional bank transfers cost $15-35 and take 3-5 days. Use Wise or SEPA.

2. Ask about currency preference. Polish contractors are comfortable with both EUR and PLN. EUR is common for international work. PLN is simpler for local expenses. Always ask the contractor which currency they prefer before setting up payments.

3. Verify NIP before starting work. NIP (Numer Identyfikacji Podatkowej) is Poland's tax identification number. Always verify the contractor has a valid NIP before the first payment. This is a 10-digit number.

4. Use a written contract. Document the contractor relationship with a clear service agreement (umowa zlecenie for ongoing services or umowa o dzieło for specific work) covering scope, deliverables, payment terms, currency, IP ownership, confidentiality, and explicit statement that they're an independent contractor.

5. Collect VAT invoices. Polish contractors must issue VAT invoices for their services. For B2B services (contractor operates as sole proprietor), the reverse charge mechanism often applies—meaning you may be responsible for VAT in your country, not the Polish contractor. Collect invoices for your records.

That's the foundation. Everything else builds on these five things.

Payment methods: What actually works

For paying Polish contractors:

Use Wise or SEPA. Both are the cheapest, fastest, and most transparent ways to pay contractors in Poland.

SEPA transfers: If you have a EUR account in the EU, use SEPA bank transfers. They're free or nearly free ($0-5) and take 1-2 business days. SEPA is ideal if you're paying in EUR and the contractor accepts EUR. All Polish banks support SEPA.

How to set up: Ask the contractor for their IBAN (International Bank Account Number). Use your bank's SEPA transfer system. The contractor receives EUR in 1-2 days.

Wise: If you don't have a EUR account or need to pay in PLN, use Wise. It charges $2-6 per transfer with real mid-market exchange rates—no markup. Wise works for both EUR and PLN.

How to set up: Create a Wise business account (free). Get the contractor's bank details (IBAN or account number). Send EUR or PLN to their account. Wise converts at mid-market rate if needed. The contractor receives money in 1-2 business days.

What about PayPal?

PayPal is widely accepted in Poland and offers instant transfers, but it charges $5-12 per transaction with worse exchange rates than Wise or SEPA. For small one-time payments or if the contractor specifically prefers it, PayPal works. For regular payments, use Wise or SEPA.

What about Payoneer?

Payoneer is popular with Polish freelancers and charges $5-10 per transfer with 1-3 day delivery. It's useful if the contractor already has an account and prefers it. But Wise or SEPA are still cheaper and faster.

What about traditional bank transfers?

Avoid them. They cost $15-35 per transaction and take 3-5 days. Use Wise or SEPA instead.

Currency: EUR or PLN?

Polish contractors are comfortable with both EUR and PLN. The choice depends on the contractor's preference and work type.

EUR is common for contractors doing international work, especially those working with EU clients. It's stable and simpler for cross-border transactions. PLN is simpler for contractors with local expenses and Polish accounting.

Always ask your contractor which currency they prefer before setting up payments. Have the conversation upfront so both sides know exactly what's being paid. If they're flexible, ask which makes their accounting easier.

Understanding NIP (Tax ID)

NIP (Numer Identyfikacji Podatkowej) is Poland's tax identification number. All contractors must have one to operate legally.

The NIP is a 10-digit number that identifies the contractor to Polish tax authorities. You need to verify the contractor has a valid NIP before starting work. Ask them to provide their NIP and keep it on file.

This is the contractor's responsibility to obtain and maintain, but you should verify it as part of your contractor onboarding process.

Understanding VAT invoices and the reverse charge mechanism

Polish contractors must issue VAT invoices for their services. VAT in Poland is typically 23% for services, though some exemptions apply.

Here's the important part for foreign companies: For B2B services (contractor operates as a sole proprietor or business), the reverse charge mechanism often applies. This means the Polish contractor doesn't charge you Polish VAT on the invoice. Instead, you (the buyer in a different country) may be responsible for VAT in your country. This is handled between you and your own tax authorities—not Polish ones.

In practice, what you'll see: The contractor issues an invoice without VAT or with 0% VAT notation, indicating the reverse charge applies. You collect this invoice for your records. The contractor reports the sale to Polish authorities under the reverse charge rules.

You don't need to understand all the VAT mechanics. Just collect the invoices the contractor provides and keep them for your records. They show you're paying for legitimate services.

Understanding Polish contract types

Poland has specific contract types for contractor work. You don't need to know all the details, but it's useful context.

Umowa zlecenie is a commission contract for ongoing services. Umowa o dzieło is a contract for specific work with defined deliverables. B2B contracts are business-to-business arrangements where the contractor operates as a sole proprietor. Your written agreement should specify which type applies to your arrangement. The contractor usually knows which works best for their tax and social security situation.

Tax and compliance requirements

When hiring contractors in Poland, tax obligations are straightforward: the contractor is responsible for their own taxes and social security (ZUS - Zakład Ubezpieczeń Społecznych). You don't withhold taxes or file anything with Polish tax authorities.

Your responsibilities: Verify the contractor has a valid NIP. Have a clear written service contract (umowa zlecenie or umowa o dzieło). Collect VAT invoices for your records. Keep documentation of all payments. Don't withhold Polish taxes.

Contractor's responsibilities: They handle their own tax registration with Polish authorities. They file tax returns as required by Polish law. They handle their own ZUS (social security) contributions. They issue proper VAT invoices.

Important note: For B2B services, the reverse charge mechanism usually applies, so the contractor isn't charging you Polish VAT. As a foreign company paying a Polish contractor, you typically don't have tax withholding obligations in Poland. Consult with a tax professional in your country about reporting requirements in your jurisdiction.

Contractor vs employee classification

One mistake businesses make is treating contractors like employees. Poland has labor laws that distinguish between the two, and misclassification can create legal risk.

A proper independent contractor relationship means they control how work is done, use their own tools and equipment, work for multiple clients, and are engaged on a project basis with defined deliverables. They shouldn't have set working hours, provided equipment, exclusive work requirements, or ongoing employment-like arrangements.

Document the relationship carefully with a written contract that explicitly states independent contractor status and specifies the contract type (umowa zlecenie or umowa o dzieło).

Why hire Polish contractors?

Poland has become a growing tech hub in Central Europe with excellent advantages. EU membership means easier compliance and payment within the EU framework. The country has strong engineering and technical talent. Rates are 30-50% lower than Western Europe while maintaining quality. Time zone alignment (CET/CEST is UTC+1/+2) is perfect for European business hours. Many tech workers speak English fluently. Poland has a thriving startup and tech ecosystem with modern development practices.

Common mistakes and how to avoid them

Mistake 1: Not asking currency preference. You assume PLN is fine, but the contractor prefers EUR for international work. This creates extra conversion steps for them.

Solution: Always ask which currency they prefer before setting up payments. Have the conversation upfront.

Mistake 2: Using expensive bank transfers. Traditional international wire transfers cost $15-35 per transaction with poor exchange rates. Over a year, paying a single contractor, this costs thousands extra.

Solution: Use Wise ($2-6) or SEPA (free-5) if you have a EUR account. You save 60-80% on transfer fees.

Mistake 3: Not collecting VAT invoices. You pay the contractor but don't collect invoices. If audited, you have no proof of legitimate business expense. You also don't understand the reverse charge mechanism.

Solution: Always request a VAT invoice for each payment. Keep them for your records. This is standard practice in EU B2B transactions.

Mistake 4: No written contract. Verbal agreements lead to disputes about scope, deliverables, and payment terms. Without documentation, there's no clarity when disagreements arise.

Solution: Always have a written service agreement before starting work. Specify the contract type (umowa zlecenie or umowa o dzieło), scope, deliverables, payment terms, currency, IP ownership, confidentiality, and termination terms.

Mistake 5: Misclassifying employees as contractors. You treat a contractor like an employee—setting hours, providing equipment, requiring exclusive work. This creates legal risk under Polish labor law.

Solution: Ensure true contractor relationship. They control how work is done, use their own tools, work for multiple clients. Document this in the contract.

Frequently asked questions

Q: Should I pay Polish contractors in EUR or PLN? A: Both are common. Ask your contractor which they prefer. EUR is popular for international work, PLN for local expenses. Many are flexible on either.

Q: What is the reverse charge mechanism? A: For B2B services between EU countries, you (the buyer) are responsible for VAT in your country, not the Polish contractor. The contractor issues an invoice without Polish VAT, indicating the reverse charge applies. You handle VAT with your own tax authorities.

Q: Do I need an EOR platform for Polish contractors? A: No. EOR is for hiring employees internationally. Polish contractors handle their own tax and ZUS compliance. You just need a good payment method (Wise or SEPA) and the ability to organize contracts and invoices.

Q: What's the best payment method for Poland? A: Use SEPA if you have a EUR account in the EU (free or nearly free). Otherwise, use Wise ($2-6). Both are much cheaper than PayPal ($5-12) or traditional bank transfers ($15-35).

Q: Do I need to understand Polish tax law? A: No. The contractor is responsible for their own tax compliance with Polish authorities. You're just paying for services. Consult with a tax professional in your country about reporting requirements in your jurisdiction.

Q: What contract type should I use—umowa zlecenie or umowa o dzieło? A: The contractor usually knows which works best for their situation. Umowa zlecenie is for ongoing services, umowa o dzieło for specific deliverables. Discuss with your contractor which applies to your arrangement.

Getting started

If you're paying Polish contractors, here's the process:

1. Verify contractor has valid NIP
2. Ask contractor for currency preference (EUR or PLN)
3. Set up SEPA (if you have EUR account) or Wise account
4. Get contractor's IBAN or bank details
5. Create written service agreement (umowa zlecenie or umowa o dzieło)
6. Request VAT invoice for each payment
7. Keep records for your tax purposes
8. Maintain contractor contact and documentation

Kontrable helps with steps 2, 3, 4, 5, 6, 7, and 8 by organizing contractor information, tracking payments, managing contracts, and storing invoices. You stay in control of your payment method and use SEPA or Wise directly.

If you're managing a few contractors, a spreadsheet works. If you're managing dozens or coordinating across a team, Kontrable saves time and keeps contractor data organized.

Ready to get organized?

[Start a free trial of Kontrable] – Get invoice workflows, payment tracking, and contract storage. Try it free.