Expanding to Poland with an EOR: A Step-by-Step Guide

Home » News » Articles » Expanding to Poland with an EOR: A Step-by-Step Guide

Gino Peters

Written By:

Gino Peters

Reviewed By: Belinda E.

May 17, 2026 2:08 am

Category Tag: News

The rise of remote work made international expansion much easier in recent years, but hiring abroad still comes with legal and administrative complexity, as every country has its own labour laws and payroll rules that must be followed. In addition, not many companies can open a new entity in every new market that they are expanding into. That is when the Employer of Record (EOR) solution comes in handy.

The EOR serves as the legal employer on paper, while the client company manages important activities related to the employees responsibilities and performance.

In this guide we will cover what an employer of record is, how it works in detail, how much it can cost and which business should consider an EOR solution.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third party service provider that legally employs a person on behalf of another company in the country where the employee officially resides. As an official employer the responsibilities of EOR include issuance of an employment contract, processing payroll and withholding taxes and necessary social security contributions, as well as preparation of offboarding documents or any documentation that need to be signed by the employer. In addition, EOR ensures the compliance with local labour laws and serves as a first point of contact for any legal disputes.

The client company that hired the employee through an EOR also has a list of responsibilities. As an Employer of Record does not have the visibility on operational activities behind the scenes a client company needs to provide direction and ensure proper team integration.

In simple terms, the EOR provider acts as a legal employer in the country of the employee’s residence, while the client company takes on day-to-day manager work.

Responsibility	Employer of Record (EOR)	Client Company
Employment contracts & any other official documentation
Payroll processing
Income tax & social security contributions
Compliance with local labour laws
Statutory benefits administration
Managing daily work and projects
Setting goals and performance expectations
Providing equipment and tools
Leading the employee’s team and workflow

Employer of Record solutions gain more and more popularity in the field of global expansion as they allow businesses to hire best candidates fast and easy while staying compliant with local employment regulations. More information about EOR service are available if you would like to understand more.

EOR Meaning

The term “EOR” is the abbreviation for Employer of Record.

Employer in this instance stands for the company that hires the employee and takes on duties related to it, such as onboarding and offboarding process, payment of wages and compliance with other legal requirements.

“Record” from the EOR perspective refers to official registration with government authorities. The name of the EOR provider is stated in all payslips and tax filings, and should also be listed by the employee in any documents where employer must be stated, such as mortgage or loan applications.

One might ask a question of why this legal structure exists. As it is not possible to provide an employment contract directly to a person that legally resides in another country, the business expanding abroad typically needs to establish a local entity. That involves legal registration, arrangement of local bank accounts and organisation of payroll structure, as well as compliance with local law.

EOR allows to simplify the global hiring and reduce administrative burden through their existing legal entity.

There are some other hiring models that can be confused with EOR.

EOR and PEO

Many sources online refer to EOR as “international PEO”, which may create confusion as these models have 1 important difference.

A Professional Employer Organisation (PEO) serves as a co-employer of a client company. In other words, a business must already have an established entity in the country. The hiring tasks are, therefore, shared between 2 companies, while legal liability stays only with the client company. In the EOR model all legal risks are being taken by the official employer. Read more about the difference between PEO and EOR here.

EOR and staffing agency

Staffing companies mainly provide assistance for short-term projects by providing temporary workers. If the client wishes to employ a person for a longer time, EOR approach must be chosen.

EOR and contractor model

Contractor agreements assume the involvement of independent workers rather than employees. This model is also often used for temporary, project-based assignments. It is important to remember that there is a big misclassification risk between a contractor and an employee in the company which can lead to potential legal issues. An EOR ensures that employment is legally compliant with local labour law.

How does an Employer of Record work?

While it may sound complicated at first, a process behind the employer of record model is relatively straightforward.

The operating company selects a candidate

The client company recruits the employee they want to hire in another country

The EOR becomes the legal employer & local employment contract is issued

The Employer of Record uses its local legal entity to prepare and issue an employment contract that complies with labour law of the country where the employee is based. Depending on case-by- case situation, the work visa might need to be secured beforehand. Our company provides immigration services, more details can be found here.

Payroll and taxes are managed

The EOR takes on recurring responsibilities related to a payroll and ensures correct processing of income tax, social security contributions etc

Benefits are administered

Paid leave, sick leave, pension contributions and any other statutory benefits are being managed by the EOR.

Ongoing compliance and HR support

It is the responsibility of the EOR to monitor changes in local labour law and ensure ongoing compliance.

Example:

Imagine a UK-based tech company found a perfect candidate in Germany for a position of a software developer.

Instead of going through the administrative burden of opening a legal entity in Germany, the company chooses to work with an Employer of Record. The EOR hires the developer under a German employment contract and manages payroll and taxes. At the same time the UK company welcomes the new employee in the team and manages the daily work of a developer.

What services does an Employer of Record provide?

The Employer of Record does more than just providing an employment contract to the employee. Typically a wide range of HR and compliance services is included in the EOR offer. For example, read about the services included in our EOR package here.

Employment and HR administration

Locally compliant employment contracts and support with other documents requested by authorities
Employee onboarding
Employee record management. For example, control over PTO

Payroll and tax management

Regular payroll processing
Tax withholding and reporting of social security contributions with authorities
Payslip generation and creation of annual wage tax certificates

Benefits administration

Management of statutory benefits
Pension contributions (where required)
Support with benefits such as maternity leave allowance, sick leave allowance etc

Compliance and risk management

Insuring compliance with local labour law
Management of onboarding and offboarding processes
Representation in difficult legal and court cases

Additional services:

Some EOR providers ( such as ThisWorks EOR Services) provide additional services such as:

Work permit and dependent visa support
Background checks
Relocation support
Value added services: support with housing, company car, banking, etc ( depending on the country).

This vast list of services allows businesses to manage international teams, while staying compliant and avoiding complex local employment administration.

Benefits of using an EOR service

There are multiple advantages the businesses can get from working with an Employer of Record provider.

Faster global hiring

Setting up a new entity can take up to several months. With an EOR the hiring process can take several days.

Reduced compliance risk

A trustworthy EOR provider ensures the compliance with all local regulations. As the labour law varies greatly between countries, having a knowledgeable party to rely on can make a big difference.

Lower expansion costs

Establishment of a new entity is not only a time-consuming process, but also costly. With EOR services these costs can be avoided.

Access to global talent

The location of a remote candidate is not a problem if the company uses Employer of Record services. In other words, the best candidate for specific business purposes can be chosen.

Scalable hiring model

EOR services are ideal for organisations that want to scale international hiring quickly. They are particularly useful in the following situations:

Remote-first teams and organisations
Companies testing new markets abroad
Startups expanding internationally

How to choose the right Employer of Record

Choosing between several EOR providers is important, as it influences not only compliance, but also employee experience for new hires and how your company is perceived on the job market.

Here are some important things to keep in mind when deciding on your EOR partner:

Geographic coverage

Make sure that EOR provider can cover the country where you want to expand globally. Read about our EOR coverage here.

Pricing transparency

Check that EOR provider does not have any hidden costs and the pricing is clearly outlined in your MSA.

Compliance expertise

A strong EOR provider should have a team of experienced local HR specialists who understands all in and outs of a national labour law.

In-house vs partner model

Some EOR providers rely on their third-party partners, while others manage employment directly through their own local entities.

Customer support

It is important to find a EOR partner that helps with any questions or concerns in a quick and professional manner. That can be crucial when dealing with employee offboarding or any legal disputes.

Warning signs

Understanding the importance of choosing a right party, your company should be cautious of providers that lack local expertise and cannot give clear answers to your labour law questions. In addition, companies with slow response times can prove to be unreliable in critical situations. Furthermore, providers with complex pricing models with many hidden fees can create a lack of cost transparency and result in unforeseen expenses.

By selecting a provider with strong expertise in local labour law and reliable support from dedicated teams, your company can ensure a smooth international growth. Learn why companies choose ThisWorks as their EOR partner.

How much does an employer of record cost

The vast coverage of services the employer of record provides makes many businesses ask how much an EOR costs.

Pricing models vary greatly on the provider and the country of coverage, but most EORs use one or more of the following structures.

Flat monthly fee per employee.

The EOR provider charges a fixed monthly fee for each employee they have on the payroll from the client.

Percentage of salary

While not being a popular approach, some EOR providers charge a percentage of the employee’s salary, typically ranging between 5%-15%.

Setup fees

Some providers charge onboarding or offboarding fee for each employee.

The fee that the business needs to pay to an EOR provider also depend on the location of a service. Local labour law complexity of some countries can influence the fee. In addition, some countries have specific statutory benefits and payroll administration requirements. Furthermore, employee headcount in the specific location can influence the fee.

EOR vs setting up a legal entity

To establish a new entity the organisations needs to go through legal and tax registration. In addition, accounting support and ongoing compliance costs such as the fees for local labour lawyers can make setting up a legal entity significantly more expensive.

An EOR allows companies to expand globally without these upfront investments.

EOR vs hiring contractors

Some businesses decide to hire international workers as contractors. However, this approach can often lead to a misclassification risk, which can cause legal and tax liabilities.

A professional EOR provider ensures that the new starters are compliantly onboarded under local employment regulations.

EOR FAQs

Is an EOR the same as a PEO?

No. PEO model assumes co-employment and requires the business to already have established local entity, while EOR employs new talents through its own entity only.

Can an EOR hire contractors?

While some EOR providers can support hiring contractors, it is important to remember that main function of EOR is the employment of full-time workers legally in a country. A risk of misclassification between EOR and contractor should be also considered carefully.

Is an employer of record legal?

Yes, when established and structured properly, Employer of Record entities are legal and widely used for international expansion by many companies.

When should you use an EOR?

The most common reason for using EOR include:

Hiring employees located in another countries remotely
Testing new markets before establishing an entity
Expanding internationally

Can you switch from EOR to your own entity?

Yes. Many companies initially hire through an EOR for the ease and speed of expansion and later transition employees to own legal entities upon their establishment. It is important to remember that some countries require specific procedure to be followed in such a scenario.

Get in touch with ThisWorks

Expanding your team globally does not need to be long and administratively complex.

With the use of Employer of Record the businesses can have access to the best talent from around the world while ensuring full compliance with local labour laws.

ThisWorks can support your global expansion with our compliant Employer of Record services.

Contact our team to find our how we can help your international team glow fast and compliantly!

Expanding to Poland with an EOR – Effortless business growth

The future today indicates that Poland is becoming the preferred destination for business growth in Europe due to the well-trained labor force, location advantage, and a continuously improving economy. As more companies strive to enter this promising market, recruitment of employees in Poland also presents unique challenges, especially in legal compliance of payroll services and Polish employment legislation. Foreign businesses aiming to set up operations in Poland can face legal formalities that will take a considerable amount of time to complete.

This is where an Employer of Record (EOR) comes in as a solution that breaks barriers to expansion. Expanding to Poland with EOR makes it easy to expand to Poland because it manages employment contracts and remuneration as well as Polish labor laws. To avoid the necessity of creating a legal entity in the country, businesses can consider expanding to Poland with an EOR.

This blog explores the benefits of expanding to Poland with an EOR, covering key aspects like Poland employee leasing vs. EOR, hiring in Poland without a legal entity, expanding your business to Poland, and legal employment in Poland for foreign businesses.

Polish employment legislation and payroll services require strict adherence to the Polish Labour Code gov.pl, making legal compliance a critical aspect of expanding to Poland.

What is an EOR and how does it work in Poland?

What is an EOR and how does it work in Poland? An Employer of Record (EOR) is a third-party employer that hires employees on behalf of a company with operations for example in Poland. The business maintains visibility and managerial control over its workers while the EOR is responsible for the legal and administrative aspects of employment. This comprises of employee remuneration, tax deductions, employee benefits administration, and adherence to the country’s employment regulations.

For all the organizations that want to start their international expansion to Poland, it is vital to know what is an EOR and how does it work in Poland? EORs make sure that the company adheres to the Polish employment laws since they provide for employment contracts, probationary periods, working hours, and how employees can be let go. They also handle the benefits for the Polish Social Insurance Institution (ZUS), which you can find here, that is in charge of social security and health insurance. Also, an EOR is responsible for timely payment of employees’ wages and remitting employee statutory benefits that include paid leaves, workplace accident insurance, and paid parental leave.

Benefits of using an EOR in Poland

Expanding to Poland with EOR offers significant advantages. EOR brings ease in the process of recruitment, besides guaranteeing jurisdictional conformity; it is therefore the best rationality for all those companies who aim at shortening their growth cycle in a given market and doing it in a cheap method. Let`s discuss the key benefits of expanding to Poland with EOR:

Compliance

First of all, companies that work with EORs employ a range of activities with strict compliance with Polish labour law and EU regulations regarding employment contracts, tax deductions, and contributions to social security institutions such as ZUS. This assists companies to prevent fines and embrace legal issues.

Speed

Expanding to Poland with EOR is easier– all while being able to hire employees without the need of establishing a legal entity, which may take months. This guarantees the employer quick access to the best talents in Poland.

Cost Savings

Establishment and continually operating a legal entity in Poland requires a series of investments in the initial stage and ongoing cost. EORs eliminate such costs making them a cheaper model for recruiting employees as opposed to hiring directly.

Local Expertise

Further, EORs rely on their vast experience in the Polish HR, tax, and legal environment to coordinate such delicate issues as contract signing and termination, calculations of salaries and other benefits, etc. Such knowledge guarantees a smooth process for both sides, the employer and the employee.

Scalability

EOR is especially useful in scaling up because it allows the growth of a company’s workforce either gradually or rapidly. Hiring and firing practices do not require the involvement of bureaucratic procedures and firms are free from legal entanglements.

If legal employment is to be managed efficiently in Poland, it is important to hire an EOR since it is the fastest and most efficient method of doing so, allowing business to concentrate on their core activities, while the complexities of local compliance are handled by the experts.

Poland Employee Leasing vs. EOR

Poland employee leasing vs. EOR: these two are solutions for hiring in Poland. However, their functions and services are quite different.

So let’s break down Poland employee leasing vs. EOR. Employee leasing is the process whereby employees are sourced from a leasing company that is responsible for their hiring, remunerating them, and managing their affairs. In this model, the leasing agency becomes the legal employer of the employees while the business acquires a temporary workforce. Employee leasing is usually applied in temporary projects or used to fulfill a current staffing requirement.

An EOR is responsible for performing the legal employer’s functions on behalf of a company but with the aim of offering long-term employment and effective compliance management. EORs are involved in employment contracts, taxes, payrolls, and benefits but do not interfere with the operational authority of employers over employees.

Pros and Cons Employee Leasing

Pros:

Good for short-term requirements.
Easier to reduce the number of people employed.

Cons:

Poor match when it comes to long-term employment of the employees hired.
Lack of an effective control of employee affairs.

EOR Services

Benefits of working with an EOR:

Facilitating compliance with the labor laws of Poland and regulations of the EU.
Is consistent with sustainable and large-scale staffing.
Appropriate for getting workers without registration of an enterprise.

Why choose an EOR?

When expanding your business to Poland employee leasing vs. EOR, foreign businesses benefit more from EORs. While similar to employee leasing, an EOR offers the full solution for legal employment, payroll, and compliance, which is more beneficial for long-term development and mitigating legal issues in Poland.

Legal and compliance challenges in Poland

Navigating legal employment in Poland for foreign businesses can be complex due to strict labor laws and regulatory requirements. Currently, the employment contract provisions, probation, working hours, and termination regulations are regulated by the Polish Labor Code. Sanctions that can be pulled off are severe penalties in form of fines from the National Labour Inspectorate.

Another significant factor is that employers need to pay to the Polish social insurance institution or ZUS. This entails such costs as the social security costs for employees, costs of medical insurance as well as pension costs. Errors in payroll or tax returns may lead to fines, and unanticipated organizational interruptions.

Failing to meet employment contract standards outlined in the Polish Labour Code gov.pl can result in fines from the National Labour Inspectorate.

Hiring in Poland without a legal entity

Hiring in Poland without a legal entity can save businesses significant time, costs, and bureaucratic hassle. Polish legislation provides numerous procedures to establish a legal entity and operate it without violating the local legislation on labor and taxation. This may take months and involve deep grassroots understanding making it a non-viable solution for organisations seeking fast growth.

Employer of Record (EOR) is a far better approach to the challenge described above. An EOR enables companies to employ individuals in Poland while avoiding the setup of a subsidiary entity, dealing with all legal and administrative requirements, including payroll and benefits, on behalf of the company.

EOR vs. Legal Entity

EOR: Simple to deploy, affordable for small to mid-size teams, and compliant with local Polish legislation and EU restrictions.

Legal Entity: Capital intensive and requires a lot of attention to administrative work.

Hiring process with an EOR

Employ an EOR that has knowledge and understanding of Polish employment laws.
Present required employee data (e.g., PESEL number, ZUS forms).
Negotiate and sign the employment contracts that will correspond to Polish legislation.
EOR takes care of payslips, taxes, and employee benefits.

Steps to legal employment in Poland for foreign businesses

Step 1: Choose an EOR

There are important considerations that go into choosing an EOR. When you choose your provider, make sure it has no compliance issues, provides a high level of data security, and has a fast speed for customer support. They should ideally have strong knowledge about the labor laws of the Polish nation as well as skills in dealing with complicated human resource management issues.

Step 2: Employee onboarding

Among the documents collected by the EOR are the PESEL and ZUS forms. They also draft employment contracts which are legal in accordance with the Polish labor law and these include working hours, probation period, and rights of employees.

Step 3: Running payroll

The EOR takes full responsibility for taxation; withholding, social security contributions, and monthly payslips as per the existing Polish laws.

Step 4: Managing benefits

EORs deal with statutory deductions such as pension, health insurance, and sick pay and can also address other bonuses in line with company regulations.

Therefore, when understanding what an EOR is and how it functions in Poland, employers can hire with ease while maintaining legal requirements.

Final Thoughts

Expanding to Poland with EOR is the safest method to operate in an international market. This means that by addressing the issues of compliance with Polish labor laws, payroll services, and employing expert knowledge of the local legislation, an EOR does not require the formation of a legal entity. This is important as it eliminates a lot of time and cost while decreasing the level of administrative problems.

Consulting EOR services is a wise decision for companies that aim at expansion and do not want to face legal or administrative issues.

Discover the range of EOR solutions to ensure your expansion to Poland is effortless. If you are thinking of expanding to Poland with an EOR, don’t hesitate to contact our company. Our experts are more than happy to assist and consult you regarding your needs and wants.

FAQ

What are the benefits of using an EOR in Poland?

Expanding to Poland with EOR makes it easier by overseeing the Polish labor laws, compensation, and taxes. It also does away with the need to set up a legal entity thus cutting on both time and costs. They offer local knowledge, assist in taxes, and manage employee benefits while offering flexibility to rapidly growing companies that are entering Poland.

How does an EOR simplify business expansion to Poland?

An EOR simplifies outsourcing for a new market in Poland by becoming the legal employer of record for your employees. This covers such matters as remunerations and allowances, deductions especially taxes and other provisions in Polish employment legislation. This enables business entities to find employees faster and concentrate more on business without encountering legal formalities.

What are the legal requirements for hiring employees in Poland through an EOR?

In Poland, companies that recruit employees through an EOR must adhere to Polish legislation. EORs draft employment contracts that are compliant with the Polish legislation, report, and pay mandatory contributions to the Polish Social Insurance Institution (ZUS), and guarantee compliance with legislation on working hours, probation periods, and termination.

Can an EOR handle payroll and tax compliance in Poland?

Yes, an EOR fully assumes the responsibilities of payroll and tax regulations in Poland. They pay the salaries of the employees, deduct taxes, and health insurance, among other deductions. This helps to meet the Polish and EU legislation, which is important due to the potential penalties for non-compliance by businesses.

How does an EOR in Poland support employment contracts?

An EOR is responsible for drafting employment contracts consistent with Polish labor laws. Such contracts contain elements such as the number of hours worked, wages, and remunerations. Thus, the EOR assists businesses in legally employing employees in Poland, without the need to register a legal entity.