Company Christmas Eve Dinner in Poland – How to Account for It Correctly in HR and Tax Records?

A company Christmas Eve dinner is, for many organisations, an important element of building culture and strengthening team integration. For HR and finance teams, however, it also means the need for correct settlement of the event — both in terms of working time and the resulting tax and social security implications.

Below we explain how to assess participation in a company Christmas Eve event in compliance with Polish regulations, and how to recognise it as an employer’s cost.

Table of Contents:

• Is a company Christmas Eve event considered working time?
• Voluntary participation or employee obligation?
• Company Christmas Eve dinner as an employer’s cost and an employee’s income.
• Can the cost of a company Christmas Eve event be treated as a tax-deductible expense?
• Are ZUS contributions required on participation in a company Christmas Eve event?
• How should the costs of the event be recorded in the accounting books / revenue and expense ledger (KPiR)?

Is a company Christmas Eve event considered working time in Poland?

According to Article 128 §1 of the Polish Labour Code, working time is the period during which an employee remains at the employer’s disposal at the workplace or another location designated by the employer. The key issue, therefore, is determining whether participation in a company Christmas Eve event means that the employee is considered to be at the employer’s disposal.

Voluntary participation in a company Christmas Eve event or an employee obligation?

If participation in a company Christmas Eve event:

• is entirely voluntary,
• the employee faces no consequences for absence,
• the event is integrational rather than task-related,

then the meeting is not considered working time. In this case, the Christmas Eve gathering is viewed as a social event supporting company culture, but not arising from job duties.

Mandatory participation – possible working time and overtime

The situation changes if:

• the employer expects attendance,
• participation follows from a formal instruction,
• the nature of the event indicates the performance of professional duties (e.g., business presentations, required activities).

In such circumstances, the company Christmas Eve event may be classified as working time.
If it takes place outside regular working hours, the employer may be required to settle overtime and provide appropriate compensation (time off or payment).

Company Christmas Eve dinner as an employer’s cost and an employee’s income

In the tax context, the key point of reference is the ruling of the Polish Constitutional Tribunal of 8 July 2014 (case K 7/13), which clarifies when non-cash benefits constitute taxable income for an employee. A benefit is considered income only if all of the following conditions are met:

• the employee uses it voluntarily and for their own benefit,
• it results in a measurable financial gain,
• it can be attributed to a specific employee.

Why is a company Christmas Eve event not considered employee income?

In the case of a company Christmas Eve gathering, the above conditions are not met. The event is organised in the employer’s interest (team integration, communication, organisational culture) and does not generate an individual, measurable financial benefit for the employee. Additionally, it is not possible to attribute a specific monetary value of the benefit to a particular person.

As a result, participation in a company Christmas Eve event does not constitute employee income, and the employer is not required to calculate tax or ZUS contributions on this basis.

Can the cost of a company Christmas Eve event be treated as a tax-deductible expense?

In most cases, yes. Expenses related to integration events, including Christmas gatherings, may be recognised as tax-deductible costs, provided that:

• they are properly documented,
• they are connected with the company’s business activity,
• they support relationship-building and cooperation within the team.

Importantly, expenses incurred for an internal Christmas Eve event for employees are not included in the catalogue of costs explicitly excluded from tax-deductible expenses (Article 16 of the CIT Act).

The issue arises when contractors, clients or employees’ family members participate in the event. Such expenses are treated by the tax authorities as representation costs, which, under Article 16(1)(28) of the CIT Act, cannot be recognised as tax-deductible.

It should also be noted that alcohol purchased for a Christmas event is not considered a tax-deductible expense.

When planning a company Christmas Eve event, it is advisable to ensure the service is purchased as a comprehensive package, for example: venue rental, food and beverages for employees, DJ services, or accommodation for employees.

Do ZUS contributions need to be paid on participation in a company Christmas Eve event?

No. Participation in a company Christmas Eve gathering does not generate employment income for the employee, and only such income constitutes the basis for calculating ZUS contributions. Since attendance at a holiday event does not provide the employee with a measurable financial benefit, it is not subject to social security contributions..

How should Christmas Eve event costs be recorded in the accounting books / KPiR?

The costs of a company Christmas Eve event with an integrational or motivational purpose may be recognised as tax-deductible expenses. In the KPiR, they should be recorded in Column 13 – “Other expenses”.

In full accounting (księgi rachunkowe), such expenses are classified as other employee-related benefits and recorded under the relevant employee cost accounts.

Want to ensure your company Christmas Eve event is settled correctly?

BPiON specialists support HR, payroll and finance teams in assessing the tax, HR and social security implications of corporate events — including holiday celebrations.
If you are also interested in employee benefits, see our article “Holiday Recognition Bonuses – How to Grant and Settle Them Correctly?”.