On 01.01.2022, a major amendment to the tax regulations changing the existing rules of tax settlements, called by the government the Polish Deal (“Polski Ład”), came into force.
The changes introduced by Polish Deal also apply to personal income tax (PIT). Below there are described the most important information on the impact of the Polish Deal on the amount of PIT tax for employees.
New tax-free amount and tax thresholds
Polish Deal introduces a higher amount of tax-free income to the level of PLN 30,000 per year and changes the amount of the remuneration threshold, on which the tax is 17%, to PLN 120,000.
|up to 30 000 PLN||0%|
|from 30 000 to 120 000 PLN||17%|
|over 120 000 PLN||15 300 PLN + 32% of surplus over the 120 000 PLN|
Polish Deal among many changes provides for the possibility of settling the so-called the middle-class relief (“ulga dla klasy średniej”). The aim of the legislator was to introduce a mechanism that would ensure that people earning from PLN 5,701 to PLN 11,141 gross per month would not lose as a result of the tax reform.
The middle-class relief applies to employees whose annual earnings range from PLN 68,412 to PLN 133,692 gross. To benefit from the middle-class relief, it is not necessary to make any declaration, as it is calculated as a rule.
The right to the middle-class relief in a given month (deducting it in monthly advances on PIT) does not guarantee that by making an annual settlement an employee will benefit from this relief.
The Polish Deal introduced a change regarding the health contribution deducted from remuneration. Employee will still have to pay a health contribution of 9% of the base, but the possibility of reducing income tax by the amount of the contribution paid has been eliminated. This means that the full advance tax payment (17% or 32%) and the full 9% health contribution shall be paid by the employee.
For detailed information on the changes to the polish tax system and the application of the Polish Deal in your company request a meeting with Calan specialists.