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What form of employment in IT?

As you browse through job listings, you may want to pay attention to a number of factors that affect the attractiveness of each offer. Who is the employer, what are the responsibilities of the employee, what technologies are used? Is remote or hybrid work permitted? What compensation can be expected and, above all, what forms of employment are available?

Employment contract and B2B.

Nowadays, especially in positions for more experienced IT professionals (mid/senior), the primary forms of employment available would be the employment contract and the B2B contract – sometimes the employer offers you a choice between the two options, other times only allowing one of them. What are the differences between these two options and what does this mean for the employee?

Employment contract – classic but inflexible.

What does an employment contract mean? First of all, very well defined conditions of employment. The employee performs their tasks at a designated location (which may be the company’s registered office), unless the contract allows home office. Working hours are regulated and the salary is accounted based on their records.

A number of restrictions, whilst they reduce flexibility, bring along a number of privileges that you do not have with B2B contracts. These include paid annual, maternity and paternity leave, and the option to take sick leave. Stability of remuneration is another important benefit associated with this form of employment – its base amount is fixed; it is the same every month and is paid to your account on a contractually stipulated date. All necessary contributions and advances, such as income tax and social security, are cleared by the employer’s accounting department, so that the entire amount transferred to the employee remains at their disposal. The most important thing, however, is the sense of stability, as there are legally defined notice periods for the employment contract. The term of the contract is also based on specific provisions of the Labour Code.

B2B – you’re a businessman, Harry.

A Business-to-Business contract means an arrangement between businesses, so the prerequisite for cooperation in this format is that you have your own business. This requirement scares off many potential employees – and wrongly so, in our opinion.

Is it a good idea to pursue a B2B partnership instead of an employment contract? More often than not, employers promote this model by tempting the candidates with salaries higher than in the case of employment contract. This is possible because, for B2B contracts, all costs associated with maintaining the employee are passed on to the subcontractor. The company does not pay our social security contributions or advance income tax. It is also under no obligation to provide work tools.

Then, it is necessary to make advance payments of income tax. Again, some savings can be made here, as the business can settle accounts with the Tax Office not only under the general system (as is the case for employees), but also on a flat rate basis. For software activities, the income tax rate is 12%, instead of the classic 17 or 32%.

What they gain in return is flexibility. For B2B contracts in IT (and beyond), the conditions of cooperation are quite liberal – one party undertakes to perform a service for the other entity within a specific timeframe and budget, with no requirements on the working hours or location. You can work from home or a rented office, in a space the décor of which suits you. The compensation is often billed not based on the number of days, but instead according to the degree of progress on the tasks. The limitations on working hours and location are less stringent, although they still exist. This way, you can collaborate with several companies at the same time or even create your own group of employees, turning a one-person business into a small outsourcing company.

What should I choose?

contract to B2B if you remain affiliated with one company and perform the same scope of duties. Nevertheless, I believe that for individuals who wish to grow and value their independence, a B2B deal can be a much better option than an employment contract. All the more so because, for simple bookkeeping, with a small number of invoices per month, the increased amount of paperwork can be handled with free apps.

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