There are two possibilities to subsidized financing of their vacation leave

Subsidized Financing from the Company Social Benefits Fund (CSBF)

The obligation to set up the CSBF applies to entities that employ at least 50 people in full time positions, as well as to public administration entities – regardless of the number of employees. Other entities that do not meet the pre-conditions specified above may set up a CSBF on a voluntary basis. Meanwhile, companies that employ between 20 and 50 employees are obliged to set up a CSBF if the trade union organization demands this.

The funds accumulated on the CSBF can be used by the employer to subsidize the holidays of employees and their families in cases where their family or financial conditions require this. In other words, employees of lower status who earn little should receive greater subsidies than their better of colleagues in management positions. The employer should not, therefore, award benefits from the Social Fund to the employees equally.

The method and date of payments from the CSBF should be agreed with employees and specified precisely in the company's internal regulations. If no such regulations exist then the employer must follow the provisions of the Act on Social Benefits Funds of March 4, 1994.

The basis for calculating the payment is the amount of average monthly remuneration in the national economy in the second half of 2012 – i.e. PLN 3161.77 (as at 2017). The size of the payment is:

• 37.5% of the base amount for persons employed in normal conditions,
• 50% for persons employed in special conditions, in accordance with the definition given in the Act on Bridging Pensions,
• between 5 and 7% for juvenile employees, depending on the years of completed studies.

Subsidized financing from the CSBF is exempt from tax and insurance premiums provided that:

• the payment is made in kind or in cash,
• the financing relates to the social activity defined in the rules on Company Social Benefits Funds,
• the maximum tax exemption amount is PLN 380 in a given tax year.

Vacation benefits

If the employer does not create a CSBF, it is obliged to subsidize employees holiday leave with vacation payments. They may be used as a source of funding not only for organized vacations as in the case of the CSBF, but also for individual vacations.

The only criterion that determines whether an employee is entitled to vacation subsidies through vacation payments is whether he or she is on holiday for a period of 14 consecutive days in a given calendar year. If that is the case then the employer is obliged to make the payment. Importantly they do not have to be work days - Saturdays, Sundays and bank holidays are also included in the 14 consecutive day period.

Vacation subsidies in the form of vacation payments are exempted from insurance premiums, but unlike the payments from the CSBF, they are subject to income tax. The method and date of payment should be specified in the company's internal regulations - otherwise the money must be paid no later than the day before the employee leaves for his/her vacation. The amount of subsidized vacation payments is calculated in the same way as subsidies from the CSBF.