Employee capital plans (PPK) in Poland: complete guide to benefits and withdrawals

Started a new job and they automatically enrolled you in PPK? Already seeing deductions from your salary? Don’t panic. What is PPK, should you participate, and most importantly – can you get your money back? Let’s break it down without the jargon.

What is PPK in simple terms

PPK in Poland stands for Pracownicze Plany Kapitałowe – Employee Capital Plans. Sounds complex, but it’s essentially an additional retirement savings system. The government decided that ZUS alone isn’t enough and created a system where you save money, your employer adds their share, and the state tops it up.

PPK vs ZUS: key differences

ZUS is mandatory, money goes to current retirees. PPK is your personal account, the money is actually yours. Main differences:

• ZUS – mandatory payment, money goes to common pool
• PPK – can opt out, money in your personal account
• ZUS – you’ll get pension someday (if you live that long)
• PPK – can withdraw early (with conditions)

Who is covered by PPK

What is PPK in Poland and who must participate? Automatically enrolled:

• Employees aged 18-55
• With employment contracts (umowa o pracę)
• Working minimum 3 months with employer
• Polish citizens and foreigners – no difference

Not enrolled:

• Under 18 and over 70 years old
• Ages 55-70 – only by request
• Civil contracts (if salary below minimum wage)
• During probation period up to 3 months

How the PPK system works

The scheme is simple, but significant money flows through it. Let’s look at an example.

Where the money comes from

Let’s say you earn 5,000 PLN gross:

Your contribution (mandatory):

• 2% of gross = 100 PLN
• Can increase to 4% (200 PLN)

Employer’s contribution (mandatory):

• 1.5% of gross = 75 PLN
• Can increase to 4% (200 PLN)

State subsidy:

• 250 PLN – welcome payment (one-time)
• 240 PLN – annual subsidy

Total monthly: minimum 175 PLN, of which only 100 is your money!

Where the money goes

Money doesn’t sit idle, it’s invested:

• Stocks (Polish and global)
• Bonds (government and corporate)
• Real estate (through funds)
• Deposits (small portion)

The younger you are, the more in stocks (higher risk, but higher returns). Closer to retirement – more in bonds (safer).

PPK returns

For 2020-2024 average returns:

• Aggressive funds – 5-12% annually
• Balanced – 3-8% annually
• Conservative – 2-5% annually

But beware! There were also loss years. In 2022 many funds showed -10%. These are investments, risk always exists.

Your and employer’s contributions

Now for specific numbers – how much comes out of your pocket.

Mandatory PPK contributions

Can you pay less

If you earn less than 120% of minimum wage (5,599 PLN in 2025), you can apply to pay 0.5% instead of 2%. But then the employer will also contribute less. Not really worth it.

Can cou pay more

Yes! You can increase your contribution to 4%. The employer can also (but doesn’t have to) increase to 4%. In theory, you can save up to 8% of salary, but few people actually do this.

How to withdraw PPK money

The key question – how to get PPK money back? You can, but there are catches.

Withdrawal at age 60

Standard scenario – you reach 60, you get the money:

• 25% – can withdraw immediately as lump sum
• 75% – paid out over minimum 10 years (monthly)
• Tax on profits – 0% (exemption)

Withdrawal before age 60

Want to withdraw earlier? Possible, but expensive:

• Your contributions – returned in full
• Employer contributions – only 30% returned
• State subsidies – taken back
• Taxes – 19% on profits + return of tax benefits
• ZUS – additional contributions charged

Example: saved 10,000 PLN, with early withdrawal you’ll get about 4,500 PLN. You lose more than half!

Special withdrawal cases

There are situations where you can withdraw without major losses:

Serious illness

• Yours, spouse’s or child’s
• Return everything, tax only on profits
• Medical documentation required

For housing (under 45)

• First property
• Can withdraw all savings
• No taxes or penalties
• But must repay within 15 years

Leaving Poland

• When leaving permanently
• Standard early withdrawal conditions
• Or can leave until age 60

Is PPK worth participating in

The eternal question – stay in PPK or opt out? Let’s count pros and cons.

Arguments FOR

• Free money from employer – minimum 1.5% extra
• State subsidies – 250 + 240 PLN annually
• Tax benefits – contributions reduce taxable base
• Inflation protection – money is invested
• Discipline – automatic savings

Arguments AGAINST

• Less take-home pay – minus 2% from salary
• Money locked in – can’t access normally until 60
• Risk of losses – funds can go negative
• Uncertainty – what will PPK be in 30 years?
• For foreigners – lose most when leaving

Who definitely benefits

• Planning to live in Poland until retirement
• Can’t save on your own
• High earners (bigger tax benefits)
• Employer contributes above minimum
• Under 45 and planning to buy property

Who should opt out

• Temporarily in Poland (1-3 years)
• Barely making ends meet
• Have high-interest debt
• Invest yourself successfully
• Don’t trust Polish pension system

How to leave the program

What PPK is we understand. Don’t like it? You can opt out.

Opt-out procedure

1. Write declaration – get form from employer
2. State reason – formally not required, but better to write
3. Submit to HR – not to PPK fund!
4. From next month – deductions stop

What happens to the money

After opting out of PPK:

• Money stays in account
• Continues being invested
• No new contributions
• Can withdraw per general rules

Don’t withdraw immediately! Let it sit, might be useful.

Automatic re-enrollment

Warning! Every 4 years employer must re-enroll you. You’ll have to opt out again. Re-enrollment dates:

• 2023 (already happened)
• 2027
• 2031
• And so on…

Tax consequences

Taxes are complicated, but important to understand.

Taxes while participating

• Employee contributions – reduce taxable base
• Employer contributions – not counted as your income
• State subsidies – not taxed

Tax savings: with 5,000 PLN salary save about 19 PLN monthly.

Taxes on withdrawal

After age 60:

• Tax on profits – 0%
• Receive everything net

Early withdrawal:

• 19% on profits (difference between contributions and payout)
• Return of tax benefits for all years
• 30% solidarity tax (if profit over 1 million PLN)

For non-residents

Left Poland? Taxes depend on treaty between countries. May face double taxation. Consult a tax advisor!

Important FAQs

Is PPK participation mandatory?

No! Employer must enroll you, but you can opt out anytime. No penalties for opting out.

What if i change jobs?

PPK account follows you. At new job provide account number, contributions continue. If you don’t – they’ll open new account, can merge later.

Can i withdraw money when leaving Poland?

Yes, but disadvantageous – lose 70% of employer contributions and all state subsidies. Better to leave until 60 and withdraw from abroad.

What happens to PPK if i die?

Money is inherited. Name beneficiaries in PPK, they’ll receive all savings tax-free. If not named – standard inheritance rules apply.

Should i increase contributions?

Depends on situation. If employer also increases – might be worthwhile. If only you – better to invest independently in IKE or IKZE.