Rules for calculating sector pay and the Mobility Package - How to correctly calculate sector pay?

What is sector pay vs. minimum wage for drivers?

W europejskim transporcie drogowym pojęcie wynagrodzenia kierowców zyskało nowy wymiar po wprowadzeniu Pakietu Mobilności. Szczególnie istotne stało się rozróżnienie między tradycyjną płacą minimalną, a bardziej złożonym pojęciem płacy sektorowej.

Definition of sector pay

Sector pay is the full remuneration due to a driver according to the regulations of the country in which they provide transport services. Unlike the simple concept of minimum wage, sector pay includes all components of remuneration resulting from the regulations of a given country, including laws, executive acts, administrative regulations, collective agreements, and arbitration rulings. It is therefore a comprehensive remuneration package, not just a basic hourly rate.

According to the Posted Workers Directive, the employer is obliged to pay a posted worker not the minimum wage amount, but the full sector pay with all its components due to drivers in a given country. This means that when a driver performs a foreign trip, the employer must pay the driver the difference when the sector pay in the country of the trip is higher than the remuneration in Poland.

For example, remuneration in the Netherlands concerns a basic minimum wage of about 10 euros per hour, but after taking into account all components of sector pay, the amount of driver remuneration increases to about 14 euros per hour.

Differences between minimum wage and sector pay - Components of international driver remuneration

The basic difference lies in the range of remuneration components taken into account. The minimum wage is only the basic hourly or monthly rate established by the regulations of a given country. Sector pay, on the other hand, is much more extensive, and wage supplements include:

• Work experience – professional experience directly affects the amount of sector pay
• Type of vehicle – rates may differ depending on the mass and type of vehicle driven
• Supplements for work on Sundays and holidays – in many countries, additional rates are provided for work on days off
• Supplements for night work – it is necessary to take into account higher rates for night work
• Driver’s age – in some countries, rates also depend on the employee’s age
• Overtime supplements

Another significant difference concerns the possibility of including allowances and lump sums. While for minimum wage, it was often possible to include daily allowances and accommodation lump sums as part of the remuneration, for sector pay this is completely prohibited. Daily allowances and lump sums are treated exclusively as reimbursement of costs and cannot constitute part of the proper remuneration of international drivers.

At this point, we also encourage you to read our article Virtual diet allowances demystified: A simple guide with examples

Why does sector pay matter in transport?

The introduction of sector pay as part of the Mobility Package aims to implement the principle of “equal pay for equal work.” This principle guarantees drivers remuneration at the level applicable in the country where they work, which is intended to prevent social dumping and ensure decent employment conditions.

However, it’s worth emphasizing that sector pay only applies to certain types of transport.

Which types of transport does sector pay apply to?

The obligation to apply sector pay occurs in the case of:

• Cabotage operations (transport within a given country)
• Cross-trade operations (transport between two countries other than the carrier’s headquarters)

Bilateral (two-way, to or from Poland) and transit transports are exempt from the obligation to apply sector pay.

The introduction of these regulations, on the one hand, has led to an increase in the remuneration of Polish drivers. On the other hand, this change means higher costs and administrative challenges for Polish transport companies. Effective management of driver remuneration therefore requires detailed knowledge of regulations, labor law, the act on drivers’ working time, the mobility package, and proper classification of the types of transports performed.

Mobility Package and employer obligations

The Mobility Package, introduced in stages from August 2020, has fundamentally changed the rules for the functioning of international road transport in the European Union. This set of legal regulations imposes a number of obligations on transport companies, particularly in terms of posting drivers and the method of calculating remuneration for international drivers.

If you’re looking for more information on what the Mobility Package is and what changes it introduces, we encourage you to read our article:

When is an international driver subject to posting?

Not every driver performing foreign transports is automatically treated as a posted worker. The Mobility Package precisely defines in which situations the posting regulations apply:

A driver is subject to posting when performing:

• Cabotage operations (transport within one country by a carrier from another country);
• Cross-trade operations (transport between two countries by a carrier from a third country).

When is an international driver not subject to posting?

However, a driver is not subject to posting during:

• Transit operations (traveling through the territory of a country without loading or unloading)
• Bilateral (two-way) operations between the carrier’s country of establishment and another country

It’s worth noting that since February 2022, the obligation to report the posting of drivers is exclusively through the IMI (Internal Market Information System), which has replaced earlier national systems such as SIPSI or MiLOG. The declaration can be made in Polish for a period of up to 6 months, which significantly simplifies the administrative procedure.

Impact of the Mobility Package on payroll calculations

First and foremost, the Mobility Package introduces a fundamental change in paying remuneration to drivers. In the case of posting, the driver must receive remuneration not according to the regulations of the country of origin, but in accordance with the rates applicable in the country where they work.

Another key change concerns the status of drivers in international transport – they are no longer treated as employees on business trips. Therefore, the employer is obliged to:

• Pay remuneration to drivers in accordance with the regulations of the host country, including all components resulting from industry regulations and collective agreements
• Respect the prohibition of including daily allowances and accommodation lump sums in the driver’s remuneration
• Adjust the base for contributions and taxation of remuneration

The effect of these changes is an increase in the cost of employing drivers by even 20-40% for Polish transport entrepreneurs.

Moreover, entrepreneurs must have access to current labor law regulations in the countries to which they post drivers, which is an additional administrative challenge.

At the same time, the legislator has introduced certain reliefs – in income tax, the employer can deduct from the driver’s gross remuneration an amount corresponding to 30% of daily allowances, and in terms of exemption from contributions, the regulations concerning employees employed abroad apply.

How to determine the sector pay rate in different countries?

Determining the appropriate sector pay for drivers is one of the most important challenges for transport companies operating in different European Union countries. Correctly establishing the rate requires knowledge not only of general regulations but also of specific industry regulations in each country.

Sources of information on sector rates

First of all, transport companies should regularly monitor current minimum rates applicable in countries to which they post drivers. Reliable information can be obtained from:

• Official government portals of a given country
• IMI (Internal Market Information System) information systems
• Transport associations and chambers of commerce
• Specialized programs for settling drivers’ working time, which update rates in accordance with changes in regulations

It’s worth emphasizing that since February 2022, the obligation to report the posting of drivers is exclusively through the IMI system, which has replaced earlier national systems such as SIPSI or MiLOG, which has significantly streamlined the process of settling sector pay.

Examples of rates in Germany, France, and the Netherlands

The minimum wage in Poland differs depending on the EU member state. In selected EU countries, it is at the following levels:

• Remuneration in Germany – From January 1, 2025, the new minimum wage is €12.82 per hour. It is planned to be further increased to the level of €14-15 in 2026. In the case of settlements in Germany, only driving time and other work time are included in the total working time.
• Remuneration in France – From November 2024, the basic minimum wage rate is €11.88 per hour. However, in the case of professional drivers, higher rates apply, depending on the driver’s category and length of service:
• The lowest remuneration in France (€12.09) applies to drivers with up to 2 years of service, driving vehicles up to 3.5 tons and trucks up to 11 tons.
• The highest rate (€14.71) is due to highly qualified tourist coach drivers with a minimum of 15 years of work experience.
• Remuneration in the Netherlands – The amount of sector pay in the Netherlands is on average over 14 euros per hour and takes into account seniority supplements to remuneration, overtime supplements, night work supplements, and reimbursement of business travel costs.
• For drivers over 21 years of age, the basic rate is €11.16 per hour, but after adding all supplements, this amount increases significantly.

Practical rules for calculating sector pay

Correct settlement of sector pay requires a systematic approach and thorough knowledge of regulations. Calculating the remuneration due to an international driver is a process that can be divided into three key stages.

Most common mistakes and how to avoid them?

Despite clear guidelines, many transport companies still make mistakes when settling sector pay. These irregularities can lead to serious financial consequences and legal problems during inspections.

To avoid them, we have collected the most commonly made mistakes that we encounter during the calculation of sector pay by transport companies. Among these are:

Incorrect assignment of transport to type

One of the most common mistakes is the incorrect classification of the type of transport performed. Many carriers settle drivers based solely on crossed borders, completely ignoring whether a given transport is subject to posting.

In practice, this means that a company may incorrectly classify a cross-trade as bilateral, thus avoiding the obligation to pay higher sector pay.

To avoid this mistake, it is necessary to:

• Carefully analyze transport documents
• Verify the type of transport before starting the settlement

Incorrect data on working time

Another significant problem concerns the incorrect determination of working time in individual countries. According to the guidelines, in some countries (e.g., in Germany) only driving time and other work time are included in working time, while in Poland breakfast breaks are also included. Companies often overlook this aspect, not including all the required components of remuneration on the payroll.

As a result, the employer, without access to complete information from the driver’s card, relies solely on fixed components of remuneration, which leads to underpayments.

Lack of documentation of loading and unloading

Although there are currently no explicit regulations regarding the obligation to mark loading and unloading in the tachograph, appropriate documentation is key for correct settlements. In the case of an inspection, it is the transport documents that form the basis for qualifying individual sections of the route.

It’s worth remembering that each load should have a unique ID assigned (e.g., CMR number), which allows distinguishing transit and bilateral transports from those subject to posting. Lack of this documentation may result in fines of up to 7,000 PLN if irregularities are detected during an inspection.

An example of good practice is keeping a record of loading and unloading, even if it is voluntary. This allows for precise determination of which foreign sections can be excluded from sector pay.

Sector Pay - Summary

In summary, the correct settlement of remuneration - sector pay or minimum wage - in the context of the Mobility Package is a key element of managing a transport company. The changes introduced by the EU have significantly affected the way of settling the remuneration of international drivers, simultaneously increasing the costs of running a transport business.

Above all, it should be remembered that sector pay differs from minimum wage in the range of remuneration components taken into account and the impossibility of including daily allowances and lump sums. Proper settlement requires accurate determination of the type of transport, precise determination of working time in a given country, and comparison of the due amount with national remuneration. Meanwhile, errors in settlements can lead to serious financial and legal consequences.

In order to avoid them, it is worth properly documenting all transports, correctly classifying types of transport, and regularly updating knowledge about rates applicable in various European countries.

Although adapting to the requirements of the Mobility Package involves additional administrative and financial challenges, compliance with these regulations ensures legal compliance. Therefore, it is worth being sure that the settlement of sector pay is carried out correctly. If you need support in this area, we are happy to provide it! Contact us and let Evotax specialists help you!

Transport companies that effectively adapt to the new regulations will not only avoid penalties but also gain a competitive advantage in the European transport market.

Sector Pay - Frequently Asked Questions

Below we have collected the most frequently asked questions that we encounter on the topic of sector pay.

How does sector pay differ from minimum wage for drivers?

Sector pay includes all components of remuneration resulting from the regulations of a given country, including supplements for seniority, type of vehicle, or night work. Minimum wage is only the basic hourly or monthly rate. Unlike minimum wage, daily allowances and lump sums cannot be included in sector pay.

When is a driver subject to posting regulations and sector pay?

A driver is subject to posting and sector pay while performing cabotage operations (within one country) and cross-trade operations (between two countries by a carrier from a third country). This does not apply to transit and bilateral operations.

What factors influence the amount of sector pay?

The amount of sector pay is influenced by: the driver’s length of service, the type and weight of the vehicle driven, the driver’s age, as well as the time of work (e.g., supplements for night work, supplements for work on weekends and holidays) or bonus systems applicable in a given country. Rates also differ depending on the country.

How to correctly calculate working time subject to sector pay?

When calculating working time, only actual driving time and time of other work should be taken into account. On-call time without performing work, unjustified stops, daily rest, and breaks resulting from the working time system are not included.

What are the most common mistakes when settling sector pay?

The most common mistakes are: incorrect classification of the type of transport (e.g., recognizing cross-trade as bilateral transport), incorrect determination of working time in individual countries, and lack of appropriate documentation of loading and unloading, which makes it difficult to settle correctly.