Salary calculator 2023
Every year the government increases the lowest national wage and raises the minimum wage. Every one of us has wondered, earning the gross amount of our monthly salary, how much we will get out of our net hand. Gross net salary calculators are used precisely to calculate the amount you get ‘on hand’. In this article, we will look at what the gross/net amount is, what the minimum wage is in 2023, what contributions are set aside in the Social Security and how to calculate the net salary. Check out the salary calculator 2023.
TABLE OF CONTENTS:
- Salary calculator – what is it and how does it work?
- Gross salary
- Net salary
- Salary calculator 2023 – Minimum wage 2023
- ZUS contributions
- Health contribution base 2023
- Advance income tax 2023
- Tax-free amount 2023 – Tax-reducing amount
- How to calculate the net salary?
- Salary calculator 2023 and contract of mandate agreement
Salary calculator – what is it and how does it work?
The 2023 salary calculator calculates the gross net salary, deducting social security contributions. There are many online salary calculators that automatically calculate the net gross salary depending on the type of contract. However, it is useful to know the basic components of salary such as social security contributions, deductible costs, advance tax, employer costs.
The gross amount is the salary including tax and social security contributions. Often, if we have an amount stated on an employment contract without specifying whether it is gross or net, it is usually the gross amount of remuneration. The Polish Labour Code does not distinguish between gross and net pay, so the very concept of pay can be misleading.
The net amount is the total salary we get on hand. This is our real money that we have already earned after deducting all charges.
Salary calculator 2023 – Minimum wage 2023
The minimum wage will be increased twice in 2023. Its increase is due to rampant inflation in the market. As of 1 January 2023, the minimum wage was set at PLN 3459 gross. From 1 July 2023, it is set to rise to PLN 3600 gross. This is PLN 480 more than last year. Salary calculator 2023 – How much will the net salary be?
Social Security contributions
When signing an employment contract, the amount of salary is usually given in gross. This is confusing for us because we do not know exactly how much money we will earn. Every person employed under an employment contract is subject to compulsory insurance with the Social Security Institution (ZUS). Contributions are deducted from our gross salary and the interest rate depends on the type of contribution. Part of the charges are borne by the employer and part by the employee. Which contributions are deducted from gross salary?
- Pension insurance
The pension contribution is paid so that you receive your salary, i.e. your pension, when you become incapacitated in old age.
- Disability insurance
Disability insurance gives you the opportunity to receive a cash benefit, at the time of, loss of monetary income, which is related to incapacity for work (e.g. disability) or death of the breadwinner. In such situations, the Social Insurance Institution (ZUS) pays a pension to replace the breadwinner’s lost salary or income (survivor’s pension).
- Health insurance
Enables the provision of health care. It is administered by the National Health Fund, or NFZ. Thanks to health insurance, we are able to benefit from: medical visits, treatments, hospital stays, reimbursement of prescriptions and certain medicines.
The basis for calculating the health insurance premium, i.e. the amount on which the premium for this insurance is to be calculated, is the basis for calculating the pension and disability insurance premiums of employees.
- Accident insurance
The contribution to accident insurance is based on the fact that cash benefits will be paid in the event of incapacity for work.
- Sickness insurance
Sickness insurance enables cash benefits to be paid during sickness as well as maternity.
The difference between sickness insurance and health insurance is that health insurance allows for free medical treatment, while sickness insurance provides benefits for the duration of this treatment.
- Labour Fund, Solidarity Fund
This is a contribution to an institution that promotes employment, mitigates the effects of unemployment and activates people to work.
- Guaranteed Employee Benefits Fund
This is a contribution that aims to protect employees against loss of wages when the employer is unable to pay.
- Employee capital plan (PPK)
The PPK contribution is made on a voluntary basis, i.e. when the employee himself or herself requests it. It is a long-term savings scheme.
Health contribution base 2023
The minimum health contribution base for general taxpayers is determined from 1 February of a given year until 31 January of the following year. The rate depends on the amount of the minimum salary applicable on the first day of the contribution year.
The minimum salary until 30 June 2023 (PLN 3490) – contribution base: PLN 314.10 will apply until January 2024.
Read also: How to negotiate salary?
Advance income tax 2023
Income tax is a compulsory monetary benefit that is remitted to the state. The tax base is income. The amount of the advance tax payment is directed to the Tax Office. In order to calculate it, deducting tax-deductible costs (gross salary less employee social security contributions) must be deducted from the income.
The amount of income tax depends not only on how much you earn. The amount you have to pay may be reduced by certain tax deductions.
Tax-free amount 2023 – tax-reducing amount
Since the Polish Deal was introduced, the tax-free amount and the tax-reducing amount have undergone numerous changes. At the moment:
The tax-free amount is PLN 30 000 – this means that you can earn that much in a year and it will not be taxed. Dividing this amount by 12 months, anyone can earn PLN 2 500 tax-free. Those who exceed the amount of PLN 30 000 will pay a tax of 12%.
The tax-reducing amount is PLN 300 – in order for the amount to be included in the salary, the employee must apply to the employer for the amount of the advance payment to be reduced by 1/12 of the tax-reducing amount (PIT-2 statement).
What percentage of the contribution is deducted from gross pay in 2023?
The employer deducts social security contributions from the salary of an employee employed under an employment contract. The amounts of the contributions vary due to the gross salary. How much percentage is deducted from the gross salary?
- pension contribution – 9.76% (employer), 9.76% (employee)
- disability pension contribution – 6.5% (employer), 1.50% (employee)
- sickness contribution – 2.45% (employee)
- accident contribution – 1.67% (employer)
- health contribution – 9 % (employee)
- Labour/Solidarity Fund – 2.45% (employer)
- FGŚP – 0.1 % (employer)
*The amount of the accident contribution (interest rate) changes every year.
How do you calculate net pay?
It is possible to find a net gross calculator on the internet, which will automatically calculate for us
how much your net salary will be. We will do it manually, showing step by step what the net salary will be.
What net amount will you get if you earn the lowest national salary (PLN 3490) by 30 June 2023?
You have to deduct all the employee’s social security contributions from this amount:
- PLN 3490 x 9.76% = PLN 340.62 pension insurance
- PLN 3490 x 1.5% = PLN 52.35 disability insurance
- PLN 3490 x 2.45% = PLN 85.51 sickness insurance
Total employee contributions: PLN 478.48
- Health insurance:
The basis for the health contribution is the remuneration less social insurance contributions, i.e.: PLN 3490 – PLN 478.48 = PLN 3011.52
Health contribution: 3011.52 zł x 9% = 271.04 zł
- Advance income tax:
3011.52 – deductible costs of PLN 250 = PLN 2761.52 rounded up PLN 2762
2762 zł x 12 % (tax threshold) = 331.44 zł
From this amount, 1/12 of the tax-free amount, i.e. PLN 300, must be deducted:
PLN 331.44 – PLN 300 = PLN 31.44 – this is an advance payment to the Tax Office.
- NET REMUNERATION:
PLN 3490 (minimum gross salary) – employee’s ZUS contributions PLN 478.48 – total employee’s health insurance contributions PLN 271.04 – advance payment for income tax PLN 31.44 = PLN 2709.04.
As a result, the net salary will be PLN 780.96 less than the gross salary.
The above calculations are the most common situation. We have assumed that the person has not joined PPK.
What net amount will you earn if you earn the lowest national salary (PLN 3600) from 1 July 2023?
- NET SALARY:
Counting all the above elements + taking into account the enrolment in PPK, the employee receives the minimum net salary: PLN 2705.86
Read also: Income versus revenue
Salary calculator 2023 and a contract of mandate
A person employed on the basis of a contract of mandate must pay employee social insurance contributions. The situation is similar to that of an employment contract – pension insurance, disability insurance, health insurance, accident insurance, Labour Fund insurance and FgSP insurance are obligatory, while sickness insurance is optional.
A gross net salary calculator will certainly help in calculating the net salary, but we will do this by example. This will make the gross net amount easy to determine.
What net amount will you get if you earn PLN 3,000 gross?
- Without PPK, without tax reducing amount, without voluntary sickness insurance
Employee’s social security contributions:
PLN 3,000 × 9.76% = PLN 292.80 pension insurance
PLN 3,000 × 1.5% = PLN 45.00 disability insurance
Health insurance contribution base:
PLN 3 000 – PLN 337.80 = PLN 2 662.20
2 662.20 zł × 9% = 239.60 zł health insurance
Health contribution to be deducted: PLN 2 662.20 × 7.75% = PLN 206.32
PLN 3 000 x 1.67% = PLN 50.10 accident insurance (paid by the employer)
PLN 3,000 x 9.76% = PLN 292.80 pension insurance (paid by the employer)
PLN 3,000 x 6.5% = PLN 195.00 disability insurance (paid by the employer)
- NET REMUNERATION
This results in a net salary of: PLN 2356
Salary calculator 2023 – Summary
Based on the gross salary, the net salary is calculated.
Thanks to salary calculators, you can learn what the net gross salary is and how to calculate it.
The gross monthly salary of an employee includes the real salary + the sum of the employee’s contributions.
The cost to the employer of hiring an employee is dramatically different from what the employee gets on hand.
The Salary Calculator 2023 has the latest updates related to minimum wage, income tax and the Polish Order 3.0.
Check also: How to ask for a raise?