Business trip or secondment?
October 16, 2017
That question should be answered by every employer sending their employees to work abroad. Proper classification determines the scope of benefits due and the employer’s obligations.
The basic differences between a business trip and secondment are as follows:
BUSINESS TRIP
- Incidental character,
- Does not change the agreement or place of performing work. The trip takes place on the basis of an official “travel order”;
- The obligation to pay the per diems and other amounts due for the period of a business trip under the Regulation on the rights enjoyed by workers employed in a state or local authority for a business trip (hereinafter: the “Regulation”);
- The remuneration for work during a business trip is, as a rule, covered by contributions and taxes in Poland, whether or not the work during the business trip is performed in Poland or abroad. All the benefits paid on account of a business trip within statutory limits are not covered by contributions or taxes;
- The per diems and other amounts due for the period of a business trip up to the amount specified in the regulation, are not covered by contributions or taxes;
- Amount of per diems due:
- Domestic -–per diem – PLN 30 per day
- Foreign – per diem under the Regulation
SECONDMENT
- Permanent (long-term) change of the workplace;
- In secondment, what changes is the workplace. It requires an amendment to the contents of the employment agreement;
- Lack of the obligation to pay per diems or other amounts due;
- The benefits paid for working abroad may be covered by taxes in Poland or abroad. Depending on the period of secondment and provisions on avoiding double taxation;
- Taxation does not apply to a part of the revenues of the person seconded, for each day of staying abroad, on which the taxpayer stays in an employment relationship, of 30% of the per diem;
- The stay includes:
- days of work,
- days off work (e.g. Saturday, Sunday),
- days of holiday leave,
- days for which an employee receives sick pay
- The stay does not include:
- the days for which an employee receives a benefit,
- the period of using unpaid leave,
- We may also apply a tax exemption for accommodation of an employee, up to PLN 500 per month, on the condition that the employee has basic tax-deductible expenses and the place of residence is situated away from the workplace (but the contribution exemption does not apply);
- Exemption from contributions to the Social Insurance Institution (ZUS);
- The basis for contributions does not include the part of remuneration of the employees, the revenues of whom are higher than the average remuneration, in the amount equivalent to the per diem due on account of a business trip abroad, for each day of stay, with the reservation that the monthly revenues of those persons, so determined, constituting the basis for contributions, may not be lower than the amount of the average remuneration. If the revenues do not exceed the average remuneration, the exemption does not apply, and the contributions are based on the actually generated revenues (under the Social Insurance System Act, in 2017 the average monthly remuneration was PLN 4,263).
Update 2019:
