Remuneration of a Management Board member

One of the important matters concerning remuneration for a member of a Management Board is verification whether it is necessary to pay social insurance contributions on such remuneration. On default, obligatory social insurance payments apply to a person who has certain title to insurance indicated by the lawmaker. The catalogue of entities subject to the act on social insurance system is closed, it encompasses e.g. the persons employed based on an employment contract or civil law agreements.


Therefore, a Management Board member appointed for the position solely upon a resolution of a competent company body is not subject to mandatory social insurance and in consequence does is not obliged to pay social insurance contributions. Such title was not enumerated in the aforementioned act. The appointment in the form of a shareholders’ resolution makes an agreement with a Board member stating the scope of activities and remuneration unnecessary.


Another issue is settlement of tax on the income received by a Management Board member. Similarly, if an agreement with a Board member is concluded based on the labour code or civil code, they are subject to social insurance contributions and income tax according to the tax scale, including tax credit. Meanwhile, if a Board member receives remuneration as a result of being appointed through a resolution, 18% or 32% tax on income reduced by tax deductible expense in the set amount of 111.25 PLN per month applies. The payer is obliged to transfer the collected advance tax payment to tax office’s bank account by the 20th day of the month following the month it was collected. The transfer shall be made to the tax office competent for the company seat or the place of conducting operations, if the company has no seat.


There are also additional issues that should be taken into consideration, and they concern taxation on personal income. A Board member does not have to receive remuneration for performing their function. However, resigning from remuneration entails – as a rule – a need for a company to recognise revenue for free of charge services. The amount of revenue depends on an analysis of market prices for providing services of this type. However, there is an exception to the rule. Free of charge services provided by a Board member towards the company will not result in obligation to pay contributions in case the entity is also a company shareholder. Then, it is assumed the shareholder through their actions increases the dividend, potential income from sale of shares or the value of the company, which constitutes a form of remuneration. Moreover, activities of Board members stipulated in the Commercial Companies Code are not subject to taxation on the part of the company either as revenue from free of charge services.



Contact info

Poland Zalewski Consulting addressesAddresses:

Warsaw office:

Filip Roger Zalewski
Poland Zalewski Consulting
Cafelco Consulting Poland Sp. z o.o.
ul. Modlińska 129 / U10
03-186 Warsaw

Accounting department:

Dorota Ostafińska
Poland Zalewski Consulting
Cafelco Consulting Poland Sp. z o.o.
ul. Torfowa 2
30-384 Cracow
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