Retirement Allowance

An employee who ends their professional career and retires is entitled to a retirement allowance from their last employer, regardless of the length of their work experience, as guaranteed by the Labour Code. The retirement allowance is exempt from contributions to pension and disability insurance but constitutes income from employment and is subject to taxation.

The conditions for receiving such an allowance are:

• The employee acquires the right to a pension.
• Termination of the employment relationship due to retirement.
• The employee has not previously received such an allowance - it is a one-time benefit.

Merely acquiring the right to a pension does not entitle the employee to a retirement allowance. The employee must terminate the employment relationship due to retirement. Therefore, every employee who meets the above conditions is entitled to a retirement allowance of one month's salary. If the employee is employed by several employers under an employment contract, they are entitled to a retirement allowance from each of them.

The Labour Code guarantees a retirement allowance of one month's salary to the employee, but this is a minimum amount, and the employer can determine whether the employee will receive the minimum amount or a higher retirement allowance. The employer must pay the retirement allowance to the employee, and failure to do so may result in a fine.

Article 92¹ of the Labour Code:

§ 1. An employee who meets the conditions entitling them to a disability pension or retirement, whose employment relationship has terminated due to retirement or pension, is entitled to a monetary retirement allowance equal to one month's salary.

§ 2. An employee who has received a retirement allowance cannot acquire the right to it again.

Certain professional groups receive higher retirement allowances than other employees, such as:

Teachers, who receive an allowance dependent on their length of service:

• Service below 20 years - an allowance equal to two months' salary,
• Service above 20 years - an allowance equal to three months' salary.

State and local government officials:

• Service above 10 years - an allowance equal to two months' salary,
• Service above 15 years - an allowance equal to three months' salary,
• Service above 20 years - an allowance equal to six month's salary.

Author: Dominika Matusiak from the Bydgoszcz Branch of the Kurdynowski Accounting Office, e-mail: dominika.matusiak@kurdynowski.pl