Do employee referral programmes pay off?

Recommendation programmes, also referred to as referral programmes, serve as a recruitment method, allowing employers to source candidates from cooperating entities, typically their current employees. When a recommended person is hired, employers grant a specific benefit in exchange for the referral. However, the legal classification of this benefit raises a significant issue: Does it constitute income from employment or income from other sources? The answer determines the employer’s responsibilities, specifically regarding the collection of income tax advances and the payment of social security contributions. What position do the tax authorities and the Social Insurance Institution (ZUS) take on classifying these common employment rewards? – Sandra Szybak-Bizacka and Kajetan Zając discuss this in an article for Rzeczpospolita.

Full article in Polish avialible: here.