First, we should explain what we mean by “employment” based on a B2B contract. It is a civil contract, more precisely a contract for the provision of services, which is subject to the provisions of the mandate contract (Polish: umowa zlecenia) between two commercial entities: the client, usually a company or partnership (which I will call “the employer”), and the developer who works as sole proprietor (“the developer”). A B2B contract is the most common alternative to a standard employment contract (regulated by the Polish Labour Code). I believe the safest scenario is the latter, which means correctly and continuously communicating the differences between a B2B contract and an employment contract and the benefits associated with it. If you are an employer, it will be easier for you to understand why certain benefits are not available to those who work under B2B contracts. Second, it will be easier for you to prove to the authorities that the B2B contracts you enter into with developers are not fake employment contracts. From the perspective of a B2B employee, it is important to remember to consider these aspects when negotiating compensation with a contractor as part of a B2B agreement. The net amount indicated on an invoice issued by the “Employee” will never be the amount he actually receives. To be precise, the “employee” must deduct from the net amount the social security contributions (in full, currently in the PLN 1,400 per month) and the PIT advance (for the flat tax – 19%, for the threshold tax – 17 or 32% each). Read the contract carefully and try to negotiate terms where risks are shared between both parties.
The agreement must be balanced and try to negotiate benefits in exchange (i.e. the right to paid leave) for the risks you take. However, keep in mind that if the contract offers you too much security, your status as a businessman can be challenged by the tax authorities. B2B entrepreneurs in the Polish IT sector are increasingly being offered membership cards for gyms, private health insurance companies or corporate laptops and phones. Nevertheless, the scope of these benefits is much narrower than for employees. If you are an employer, you can solve this problem in several ways: by covering the cost of these benefits (developers charge employers for such expenses), by choosing not to offer such benefits, and by clearly communicating your strategy. 1. What is a B2B contract? 2. Advantages of a B2B contract 3. Recognition of a B2B contract as an employment contract 4.
B2B contract with a former employee 5. Responsibility for the performance of a B2B contract 6. Termination of the B2B contract 7. B2B contracts in the IT sector However, if you are an employer, you must not allow these rights to be written down in a B2B contract. This is because you can`t explain why a B2B entrepreneur (who is a sole proprietor who is theoretically not affiliated with your business) has the right to take vacation and pay sick leave. It sounds suspicious, at least. Once you have negotiated your contract, you can officially work in the IT industry and enjoy all the benefits that the B2B contract brings! Most likely, the fact that the parties have fully agreed on such a contract is irrelevant. In this case, the employer may be forced to pay unpaid social security contributions or even be held criminally liable for the violation of workers` rights. The same goes for your B2B contracts. If you`re not familiar with legal clauses and really want to know what you`re signing and what expectations are placed on you as the party involved, don`t worry.
You should also keep in mind that a B2B contract in the IT industry also gives you more flexibility as a developer. For example, you can accept additional jobs, work on your own projects, and issue invoices to other clients, unless you and your employer decide to include non-compete obligations in your contract. Let`s take a look at the specific elements of B2B contracts that are typical of the Polish IT sector and are considered particularly risky. We must bear in mind that tax inspectors have considerable powers, so that the wording of the Treaty alone, as important as it is, will not be sufficient to fully protect the interests of both parties. The authorities may establish the facts using all methods and means permitted by law. Decide what is important to you. However, if you value freedom in your work, you often work remotely, you don`t mind doing a little accounting and liking the idea of higher salaries – then the B2B contract is ideal for you. On the other hand, employment contracts are much more secure than B2B contracts. If you are an employee, your employer cannot terminate the agreement immediately (except in extreme cases such as a serious breach of the employee`s essential obligations).
The employer is subject to the notice periods imposed by the Polish Labour Code. However, it can also work against you. Employees in the IT industry often have many job opportunities available and don`t like to be limited by notice periods. To better understand the difference between the two most common types of development contracts, we have prepared a table with the most important topics. If points need more explanation, you can find them below the table. If B2B contracts bring undeniable benefits to employers, why do some consider them risky? A mandate contract is a contract for the provision of a service for a certain period of time. It is a very convenient and popular form that is often used in service work: restaurants, shops, etc. Prices are usually hourly, but can also be weekly or monthly – it all depends on the agreement with the employer. The law also regulates the lowest hourly rate and is in 2021 – 18.30 PLN gross, which gives about 12 PLN net. In any type of B2B agreement, a broad contractual freedom is a common feature. Of course, this freedom is greater than that which exists in B2C agreements. Polish legislation surrounds the consumer with a very specific level of protection – by analogy, more broadly than in the context of entrepreneurs.
Why are B2B contracts so popular in the Polish IT industry? First, they are financially advantageous for both parties: the employer and the sponsor. Consider the following example: A manager`s contract is not regulated by law, so both parties to the contract work on its form and content. This type of agreement is usually used when no one on the board of directors wants to actively run the company as a manager. A newly hired manager assumes full responsibility for the company. This type of contract gives the manager independence and flexibility (also in terms of working hours), but also a great responsibility. There is no notice period, either party can terminate the contract at any time. As mentioned earlier, the most important advantage of a B2B contract is the fact that your “job” as a freelancer is much cheaper for the company that contracts you. This usually means a higher salary for you, as your employer doesn`t have to pay any extra costs for your job. A B2B contract often gives you much more flexibility in terms of working hours and place of work than an employment contract. After discussing the general advantages and disadvantages of each solution, it is worth paying attention to the overall (financial) profitability of each model. In the following, for several cost rates depending on the type of contract selected, I compare with the following assumptions: As we can see, the popularity of the employment contract decreases with increasing experience.
Among juniors, only 45.4% of them work with a B2B contract, while for seniors, this number rises to 87.2%. .