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The difference between " self-arranged countryside holiday" and "holiday allowance"
Have you already fulfilled your obligation this year to inform your employees of your intention to pay or not to pay holiday allowance or a self-arranged countryside holiday?
Author:
Beata Bar
Payroll Manager
The terms holiday allowance (świadczenie urlopowe) and self-arranged countryside holiday (wczasy pod gruszą) are often confused. While both serve the same purpose—providing financial support for an employee’s vacation—there are significant differences in their amounts and general rules.
An employer who grants self-arranged countryside holiday finances the employee’s and their family's vacation using funds from the Company Social Benefits Fund (Zakładowy Fundusz Świadczeń Socjalnych, ZFŚS).
The holiday allowance, on the other hand, is a voluntary benefit for employers who do not establish a ZFŚS. It is paid from the employer’s operating funds. If an employer decides not to provide a holiday allowance, they must inform employees by the end of January of the given year.
Below is a comparison of both benefits:
Holiday allowance
Self-arranged countryside holiday
Who pays?
Employers who, as of January 1 of a given year, employ fewer than 50 full-time equivalent employees and do not establish a Company Social Benefits Fund (Zakładowy Fundusz Świadczeń Socjalnych, ZFŚS) may—but are not required to—provide a holiday allowance to their employees. If such an employer decides not to pay the holiday allowance, they must inform their employees by the end of January of that year in a manner customary for that employer.
Employers who, as of January 1 of a given year, employ at least 50 full-time equivalent employees, as well as budgetary units required to establish a Company Social Benefits Fund (Zakładowy Fundusz Świadczeń Socjalnych, ZFŚS), or employers who, as of January 1 of a given year, employ at least 20 but fewer than 50 full-time equivalent employees and have established the Fund voluntarily or at the request of a workplace trade union organization.
Legal basis
A one-time financial allowance for an employee in accordance with Article 3(5) of the Act of March 4, 1994, on the Company Social Benefits Fund (Dz.U.2024.0.288). Information regarding the payment or non-payment of the holiday allowance should be included in the remuneration regulations.
A vacation subsidy for an employee, paid from the Company Social Benefits Fund (Zakładowy Fundusz Świadczeń Socjalnych, ZFŚS) in accordance with the rules specified in Article 1(1) and Article 2 of the Act of March 4, 1994, on the Company Social Benefits Fund (Dz.U.2024.0.288). The employer defines the rules and conditions for using services and benefits financed by the fund, as well as the allocation of fund resources for specific purposes and types of social activities, in the internal ZFŚS Regulations.
Criteria
It is of a claim nature provided that the statutory criterion of the number of days of annual leave used is met: the employee must apply for leave of 14 consecutive calendar days
It is not a claim-based entitlement; here, only the social criterion related to the employee's life, family, and financial situation applies. There is no requirement for a minimum number of vacation days (as with the holiday allowance, which is 14 days)! However, the employer may request receipts confirming the employee's vacation expenses for reimbursement purposes.
Social insurance contributions
The holiday allowance is not exempt from social security contributions. The holiday allowance for employees funded from the company's operating funds is not exempt from contributions under the provisions of the Social Insurance System Act or based on the contribution regulation.
Benefits funded from the ZFŚS, regardless of their value or type, are always excluded from the basis for social security contributions.
Tax
The holiday allowance is income from employment, and as such, income tax must be deducted from it.
ZFŚS benefits do not constitute income from employment and, in accordance with the Act of July 26, 1991, on Personal Income Tax, are exempt from taxation up to the amount of 1,000 PLN in a given tax year.
Bailiff's seizure
The holiday allowance may be subject to garnishment up to the full amount, but only if the enforcement title pertains to "wages for work and other receivables." If it only concerns wages for work, the holiday allowance cannot be garnished.
To enforce these receivables, it is necessary for the bailiff to seize "wages for work, other receivables, and ZFŚS benefits" (only under the procedure specified in Article 895 and following of the Civil Procedure Code).
Payment deadline, from what funds?
The payment date of the allowance should be specified in the Remuneration Regulations. The holiday allowance is granted only once in a given calendar year. The regulations state that the final payment date for the holiday allowance is the last day before the employee’s vacation. The holiday allowance is paid from the employer's operating funds.
They can be paid both after returning from vacation and before going on holiday. The exact payment date should be specified in the company's ZFŚS Regulations. Self-arranged countryside holiday are paid from the ZFŚS funds.
The amount
The law does not specify the minimum value of the holiday allowance. It only sets the maximum rate, which cannot exceed the amount of the basic ZFŚS contribution for the given calendar year. This amount depends on the average monthly wage in the economy in the second half of the previous year*. It is up to the employer to decide on the value of the holiday allowance paid from operating funds. The employer may pay an allowance that is either lower or higher than the current ZFŚS contribution amount.
There is no legally specified amount for the benefit. The value of Self-arranged countryside holiday is influenced by several factors, such as: the income criterion of the employee and their family, the analysis of the employee's material situation. However, it should be noted that the Self-arranged countryside holiday benefit, paid up to the amount of the current ZFŚS contribution, is exempt from social security contributions. This benefit is exempt from personal income tax up to the amount of 1,000 PLN. Any amount above this threshold is subject to tax.