A fintech scale-up in Warsaw is hiring a CTO. The candidate who made it through the process is currently employed at a corporation and hears the CEO’s offer: “Our board is on management contracts — PLN 35,000 a month (about EUR 8,100), a bonus for targets, six months of non-compete.” The candidate asks what that means in net pay and how it differs from the B2B contracts half of their future team works on. The CEO does not know, and HR refers the question to accounting.
The management contract (Polish: kontrakt menedżerski) is one of the most misunderstood forms of engagement in Poland. Some see it as “employment without the Labour Code”, others as “B2B for the board”, others still as a way to pay less tax. None of these is accurate. A management contract has its own tax and social security rules — closer to employment than most people expect — and its own risks, which have grown since July 2026.
Below, we explain what a management contract is, when it is used in IT, how it is settled in 2026, and how much net pay a manager keeps compared with employment and B2B at the same cost to the company. All calculations use explicit assumptions. Amounts are in Polish złoty, with indicative euro values at 4.30 PLN per EUR. This article is not legal or tax advice — have a lawyer and a tax adviser review the contract before signing.
What is a management contract and what is its legal basis in Poland?
A management contract (also called a management services agreement) is an agreement in which a manager undertakes to manage a company or a separate part of it for remuneration. In practice it covers roles where results count, not hours worked: a CEO or board member, the head of a division, the leader of a large transformation programme.
Polish civil law does not regulate this agreement directly — it is an unnamed contract. Because it involves the provision of services, Article 750 of the Civil Code applies: contracts for services not governed by other provisions are subject, accordingly, to the rules on mandate contracts (umowa zlecenia). The content of the contract is therefore shaped mainly by the parties — which is both its greatest advantage and its greatest risk.
A management contract is not employment. The manager is not covered by Labour Code rules on working time, overtime, annual leave, notice periods or limited liability for damage. The parties may regulate all of this in the contract — but they do not have to, and whatever the contract does not provide simply does not apply.
Nor is it a standard B2B contract. Polish tax law treats income from a management contract as a separate source — income from personally performed activities — with its own rules on tax advances and deductible costs. We return to this in the tax section.
It is also worth distinguishing the contract from appointment to the management board. A board member of a Polish limited company is appointed by a resolution of a company body, while the management contract sets the terms on which the role is performed: pay, targets, liability, non-compete. Appointment and contract are two separate legal relationships. An IT director or programme lead who is not a board member can have a management contract without any appointment.
When is a management contract used in IT instead of employment or B2B?
In the IT sector, management contracts appear in four typical situations.
A CTO or CIO on the management board. A company whose board is paid under management contracts uses the same form for the board member responsible for technology. This is the most common case in medium and large companies and in companies with State Treasury shareholdings, where — as described below — this form is mandatory.
An IT division head with performance-linked pay. The company wants a significant part of pay to depend on specific targets: a system go-live, lower infrastructure costs, service availability. That is possible under employment, but constrained by pay regulations. A contract gives more freedom.
An interim manager. The company needs an experienced manager for 6–18 months — to restructure the IT department, rescue a project or integrate an acquisition. Employment with up to three months’ notice and Labour Code protection does not fit a fixed mandate. A management contract with targets and an end date fits better.
A programme lead on the client side. An organisation runs a multi-year transformation programme and makes an external manager accountable for its outcome. If that manager has no business of their own, or the company wants them to act on its behalf towards suppliers, a management contract is the natural form.
The same roles are often filled on ordinary B2B contracts. The difference is not cosmetic: B2B is a relationship between two businesses in which the manager bears business risk and settles like a company. Under a management contract, the manager acts in the name and on behalf of the company, and the company is liable for their actions towards third parties. That difference has tax consequences, discussed below.
How does a management contract differ from employment and a B2B contract?
The table compares the three forms in the areas candidates and HR teams ask about most:
| Area | Employment contract | Management contract | B2B contract |
|---|---|---|---|
| Legal basis | Labour Code | Art. 750 Civil Code (mandate rules) + contract terms | Civil Code + contract terms |
| Income tax | Scale 12% / 32% | Scale 12% / 32%, 12% advance all year | Scale, 19% flat tax or lump-sum tax |
| Deductible costs | PLN 250 / month (300 if commuting) | PLN 250 / month | Actual business costs |
| Social contributions | On full pay, sickness mandatory | On full pay, sickness voluntary | On a declared base (min. PLN 5,652) |
| Company contributions | 20.48% (+1.5% PPK) | 20.48% (+1.5% PPK) | None |
| Holidays | 20 or 26 days by law | Only if the contract provides | Only if the contract provides |
| Termination | Labour Code notice, job protection | Contractual freedom | Contractual freedom |
| Liability for damage | Limited (generally up to 3 months’ pay) | Full, under civil law | Full, under civil law |
| Variable pay | Possible, within pay regulations | Free, linked to targets | Free |
| Non-compete | Labour Code, compensation min. 25% | Contractual freedom | Contractual freedom |
The key conclusion, which surprises most candidates: in tax and social security terms, a management contract is closer to employment than to B2B. The company pays the same contributions as for an employee, the manager pays the same contributions as an employee (except that sickness insurance is optional), and tax follows the same scale with the same deductible costs.
The differences lie elsewhere: contractual flexibility, the scope of liability and the absence of Labour Code protection. For the manager, that means more freedom to negotiate — and the need to negotiate everything an employee gets by law.
We compared employment and B2B from an IT specialist’s perspective, with a table of equivalent rates, in our article on B2B vs employment for developers in Poland in 2026. Here we focus on the third form, used mainly for leadership roles.
What social security contributions do the manager and the company pay in 2026?
For social security purposes, a management contract is treated as a contract for services governed by mandate rules. The manager is insured on the same terms as a mandate contractor:
| Contribution | Manager | Company | Status |
|---|---|---|---|
| Pension | 9.76% | 9.76% | Mandatory, up to the 30x cap |
| Disability | 1.50% | 6.50% | Mandatory, up to the 30x cap |
| Sickness | 2.45% | — | Voluntary |
| Accident | — | 1.67% (or individual rate) | Mandatory |
| Labour Fund | — | 2.45% | If the base ≥ minimum wage (PLN 4,806) |
| Guaranteed Employee Benefits Fund | — | 0.10% | Mandatory |
| Health | 9% of pay after social contributions | — | Mandatory, not deductible from tax |
The total company contribution is therefore 20.48% — exactly the same as for employment. If the manager is enrolled in PPK, the Polish employee capital plan, the company adds the 1.5% basic contribution, since PPK also covers people working under contracts governed by mandate rules.
The 30x cap also applies — PLN 282,600 in 2026. Once annual pay exceeds it, neither the manager nor the company pays pension and disability contributions. At PLN 35,000 a month, the cap is crossed in September, and the manager’s net pay rises noticeably from October.
Two nuances matter in practice:
- A contract with one’s own employee. If the company signs a management contract with someone who is also its employee, the Polish social insurance institution (ZUS) treats the contract income as employment pay. Sickness insurance stops being voluntary, and both agreements are assessed together.
- Voluntary sickness insurance is a real choice. Without it, net pay is higher by 2.45% of the base, but the manager has no right to sickness or maternity benefit from this title. At PLN 35,000, that is about PLN 506 a month. After joining, the right to benefit starts only after 90 days of continuous coverage.
A manager on a contract also receives no sick pay from the company for the first 33 days of illness — that benefit is reserved for employees. With sickness insurance, ZUS pays the benefit. If the contract is meant to protect the manager during illness more broadly, it has to say so explicitly.
How is a management contract taxed, and why is the 12% advance a trap?
The Polish Personal Income Tax Act classes income from management agreements, management contracts and similar agreements as income from personally performed activities (Article 13(9)). The same provision covers such contracts even when a manager concludes them as part of their own business — except for income of board members and other corporate bodies received for holding the office itself, which is a separate category.
The tax rules are:
- The progressive scale — 12% up to PLN 120,000 of income and 32% above, with a PLN 30,000 tax-free amount, as on employment.
- Deductible costs at a flat PLN 250 a month (PLN 3,000 a year). The manager’s actual expenses — car, office, equipment — cannot be deducted.
- The company withholds the tax advance and pays it to the tax office. The manager issues no invoices and keeps no books.
- No VAT, provided the conditions excluding personally performed activities from VAT are met: the contract sets the terms of performance and pay, and the principal is liable to third parties.
Here is the trap candidates often discover only in April. Under employment, once income passes the PLN 120,000 threshold, the payer starts withholding advances at 32%. Under a management contract, the payer withholds 12% all year, however much the manager has already earned — unless the manager asks for the higher rate.
The effect at PLN 35,000 a month: advances withheld during the year total about PLN 44,985, while tax due for the year is PLN 92,364.56. In the annual return, the manager pays almost PLN 47,400 more. Monthly payslips looked much higher than they really were. That is why comparing a contract with employment always requires annual net pay after settlement, not the first month’s transfer. The sensible options are asking for the 32% advance once the threshold is passed, or setting the difference aside every month.
Formalities for the manager are light. After year-end the payer issues a PIT-11 information form, and the manager reports the income in a PIT-37 return, together with any employment income. If the contract is the only source of income, the manager can file a PIT-2 statement so that advances reflect the tax-reducing amount (PLN 300 a month). That lowers monthly advances but increases the annual top-up if income exceeds the threshold.
For HR and finance, the practical lesson is: when offering a management contract, state annual net pay after settlement, not the monthly transfer. A candidate who compares the first payslip from a contract with the first payslip from employment will see the contract as several thousand złoty a month better — and feel misled the following April.
How much net pay does a management contract leave compared with employment and B2B at the same company cost?
Let us calculate the CTO example from the introduction. Assumptions:
- Pay on employment and on the management contract: PLN 35,000 a month, PLN 420,000 a year.
- Deductible costs of PLN 250 a month, no PPK, no author’s costs.
- The 30x cap: PLN 282,600.
- The B2B variant: an annual invoice equal to the total company cost of employment (PLN 483,674.76), i.e. the same amount spent by the company. We assume the B2B contract — like the management contract — provides a paid break in services, so the manager has the same time off. Business costs of PLN 7,800 a year and full social contributions on the PLN 5,652 base, as in our B2B vs employment comparison.
| Item (year) | Employment | Management contract (with sickness) | Management contract (no sickness) | B2B, 19% flat tax |
|---|---|---|---|---|
| Company cost | PLN 483,675 | PLN 483,675 | PLN 483,675 | PLN 483,675 |
| Pay / revenue | PLN 420,000 | PLN 420,000 | PLN 420,000 | PLN 483,675 |
| Manager’s social contributions | PLN 42,111 | PLN 42,111 | PLN 31,821 | PLN 23,121 |
| Health contribution | PLN 34,010 | PLN 34,010 | PLN 34,936 | PLN 22,185 |
| Income tax | PLN 92,365 | PLN 92,365 | PLN 95,657 | PLN 83,344 |
| Average net per month | PLN 20,960 | PLN 20,960 | PLN 21,465 | PLN 28,935 |
| Annual state pension capital | PLN 55,164 | PLN 55,164 | PLN 55,164 | PLN 13,239 |
Three conclusions:
- A management contract is not a way to pay less tax. On the same assumptions it gives exactly the same net pay as employment. The only difference is the option to drop sickness insurance — about PLN 506 a month more, at the cost of no sickness benefit.
- B2B gives about 38% more net pay at the same company cost — for the same reasons we described for developers: contributions on a minimum base, a lower tax rate and a capped health contribution. The lump-sum tax would widen the gap further, where available (15% for management consulting, 12% for IT services).
- The B2B advantage has a price. The manager’s state pension capital grows by about PLN 42,000 a year less, and — as explained below — not every management role can lawfully be performed on B2B.
At lower pay the picture is similar. At PLN 25,000 a month, a management contract and employment both give PLN 15,204 net on average, while B2B at the same company cost (PLN 358,610.76 a year) gives PLN 21,004 on the flat tax.
Can a management contract be signed through your own business?
Almost every manager who sees the table above asks this. The answer: formally yes, but it does not automatically change how the income is taxed.
As mentioned, Article 13(9) of the Personal Income Tax Act covers income from management contracts even when the contract is concluded as part of the manager’s business. Setting up a sole proprietorship and issuing invoices does not by itself move the income into the “business activity” source with its flat or lump-sum tax.
In practice, classification depends on Article 5b(1) of the Act. Activities are not treated as business activity if three conditions are met together:
- liability to third parties for the result and performance lies with the principal (the company), not the manager;
- the activities are performed under direction, at a place and time set by the principal;
- the manager bears no business risk related to the activity.
A CTO who is part of the company’s organisational structure, acts on its behalf towards suppliers, works in its office and bears no risk other than losing the contract usually meets all three conditions. Their income remains income from personally performed activities — whatever the contract is called and whether or not they invoice. The consequence may be a challenge to the flat or lump-sum tax and back taxes with interest.
It is different for an adviser or interim manager who serves several clients, organises their own work, is accountable for results and bears costs and risk. Their income may qualify as business income. The line is blurred, however, and is the subject of many individual tax rulings. If you plan such an arrangement, consider applying for a ruling before signing.
A further restriction applies to people moving to B2B with their existing employer. As we described in our B2B vs employment comparison, the flat tax is unavailable in a year in which the services correspond to duties performed under employment, and the lump-sum tax also in the following year.
When can a court or the labour inspectorate treat a management contract as employment?
Article 22 of the Polish Labour Code defines employment: an employee performs work of a specified kind for the employer, under their direction, at a place and time set by the employer, for pay. Article 22 §1² adds that employment cannot be replaced with a civil-law contract while keeping those conditions.
Polish Supreme Court case law has consistently held that the way a contract is performed, not its name, decides its nature. In its judgment of 11 October 2005 (I PK 42/05), the Supreme Court held that whether a management contract is employment or a civil-law agreement depends on the circumstances of the case. If the contract contains terms typical of employment — set working hours, place of work, a duty to follow instructions — a labour court may treat it as employment.
For senior managers, subordination looks different than for other staff. Courts accept that a manager can have wide autonomy and still be an employee — so-called autonomous subordination. Seniority alone does not protect a contract from reclassification. What counts is whether the manager genuinely decides how to achieve targets, or follows the CEO’s day-to-day instructions during fixed hours.
Since 8 July 2026 the risk has been higher. An amendment to the National Labour Inspectorate Act gave district labour inspectors the power to convert a civil-law contract into an employment contract by administrative decision — previously that required a court ruling. The procedure starts with an instruction to conclude an employment contract, and the decision can be appealed to a labour court. The rules also cover contracts signed before the reform. We described it in more detail in our article on total employer cost in Poland in 2026.
Warning signs in IT management contracts include: mandatory office presence during fixed hours, reporting to a superior who gives day-to-day instructions, holidays “subject to approval”, no targets and no variable pay, and a contract signed with an existing employee in the same role with the same duties. None of these alone decides the matter, but together they look very much like employment.
Which clauses should a good management contract include?
Because the Labour Code does not protect a manager on a contract, everything that matters must be in the agreement. For a CTO or IT director, nine areas are key:
- Targets and variable pay. Measurable management targets — for example availability of key systems, programme delivery on schedule, cloud budget — with weights, settlement rules and payment dates. Avoid targets you cannot influence.
- A paid break in services. The equivalent of annual leave: the number of paid days a year and how they are used. Without this clause there is no paid holiday.
- Illness and incapacity. Whether, and for how long, pay continues during illness — especially if the manager skips sickness insurance.
- Notice and severance. Symmetric notice periods, severance when the contract ends for reasons other than breach, and bonus settlement on early termination.
- Non-compete. Scope, duration and compensation. On a contract the parties are free, but a non-compete without compensation or with vague scope is often challenged. For comparison: under employment, compensation cannot be lower than 25% of pay for the non-compete period.
- Liability and D&O insurance. The manager is liable for damage under civil law, i.e. in full. Negotiate a liability cap and directors and officers insurance paid by the company.
- Intellectual property. Especially important in IT: who acquires rights to the architecture, documentation and code the manager co-creates. Unlike employment, a contract does not transfer copyright automatically — it needs an explicit clause listing the fields of use.
- Confidentiality and data protection. The scope of confidential information, how long obligations last after the contract ends, and system access rules.
- Additional benefits. Car, phone, private healthcare, training, and participation in an incentive plan (options, phantom shares) with vesting rules.
Precise scope and autonomy matter too. Paradoxically, the more precisely the contract describes which results the manager is accountable for, rather than how and when they must work, the safer it is for both sides — including against reclassification.
What restrictions apply in companies with State Treasury shareholdings?
In companies with a State Treasury or local government shareholding, a management contract stops being optional. The Act of 9 June 2016 on the principles of setting remuneration for persons managing certain companies — known in Poland as the “cap act” (ustawa kominowa) — requires board members of these companies to be paid under a management services agreement.
The act defines the pay structure. The fixed part falls within ranges expressed as multiples of a base amount, depending on company size — for example four to eight times the base for a company with an average of at least 251 employees or above certain turnover and asset thresholds. The variable part depends on achieving management targets with objective, measurable criteria, and its payment can be deferred for up to 36 months.
The act also caps severance at three times the fixed monthly pay, provided the manager held the office for at least twelve months, and limits non-compete compensation to 100% of monthly base pay for each month. For a CTO or technology board member in a state-owned company, that leaves far less room to negotiate than in a private company.
How should a CTO or IT director candidate negotiate a management contract?
The checklist below helps assess a management contract offer and compare it with an employment or B2B offer:
| Area | High risk | Market standard | Good offer for the manager |
|---|---|---|---|
| Form and tax | ”B2B” contract while working like an employee | Management contract with a clear role description | Contract plus a simulation of annual net pay after settlement |
| Fixed pay | Compared with gross employment pay without adjustment | Equal to gross employment pay | Reflects the absence of Labour Code benefits |
| Variable pay | Unmeasurable targets or outside the manager’s control | Annual bonus for 2–3 targets | Measurable targets, weights, payment date, settlement on exit |
| Break and illness | Nothing in the contract | 20–26 paid days off | Paid break plus pay during illness |
| Notice and severance | Immediate termination by the company | Symmetric 1–3 months | Symmetric notice plus severance |
| Non-compete | No compensation or no limits | 6–12 months with compensation | Precise scope, compensation ≥ 50%, option to waive |
| Liability | Unlimited, no D&O | D&O paid by the company | D&O plus a liability cap |
| Copyright | Nothing in the contract | Transfer of rights with fields of use | Transfer with a clear carve-out for prior work |
| Autonomy | Fixed hours, day-to-day instructions | Targets and results reporting | Targets, budget and decision rights written into the contract |
Three negotiation principles work in any company:
Compare annual net pay after settlement, not the monthly transfer. The 12% advance all year inflates monthly pay. At PLN 35,000, the annual top-up exceeds PLN 47,000.
Price what you do not get by law. Twenty-six days of holiday, sick pay and a notice period have value. If the contract does not provide them, fixed pay should compensate.
Keep the form consistent with reality. If the role requires constant presence and daily reporting to the CEO, employment with a high variable component may be a better answer than a contract that a labour inspector could convert into employment.
When is it better to bring in an external team than to hire more managers?
A management contract settles the form of cooperation with a leader. It does not settle the problem many new CTOs and IT directors face in their first months: not enough people to deliver the plan. A new leader with ambitious targets needs a team faster than recruitment can deliver one.
At that point, the choice of engagement model concerns the whole team, not just the manager. On employment, the cost of a position exceeds gross pay by more than 40%; B2B is cheaper but has carried higher legal risk since July 2026; and staff augmentation brings specialists on board within weeks and ends with a month’s notice. We compared the three models in our article on total employer cost in Poland, and the legal differences between B2B and body leasing in B2B contract vs body leasing in 2026.
The CTO role has shifted in recent years from chief engineer to architect of business value, accountable for results. A management contract suits that shift because it ties pay to targets. But the targets have to be delivered by a team, and the team has to be built.
The key takeaways:
- A management contract is an unnamed contract governed by Article 750 of the Civil Code and mandate rules. The Labour Code does not protect the manager — everything must come from the contract.
- For tax and social security, it is close to employment. The company pays 20.48% in contributions, the manager the same as an employee, except for voluntary sickness insurance. Net pay at the same salary is practically equal.
- The 12% advance all year is a trap. At PLN 35,000 a month, the annual top-up is almost PLN 47,400.
- Invoicing through your own business does not automatically change taxation. If the manager works under the company’s direction, without business risk, and the company is liable for their actions, the income remains income from personally performed activities.
- Since 8 July 2026, reclassification risk is higher. A labour inspector can convert the contract into employment by administrative decision.
At ARDURA Consulting we have been helping companies in Poland, Europe, the Middle East and the USA build IT teams for more than ten years. We work with CTOs and IT directors in the first months of their mandate, when projects need to start quickly and permanent recruitment is only beginning. Our available experts — architects, tech leads, project managers — can join a team within weeks, and in the Try & Hire model move to the company permanently later.
If you are building a team for a new technology leader or deciding which form of engagement to offer key people, talk to our team.