This chapter includes data on the income tax paid by workers, their social security contributions, the family benefits they receive in the form of cash transfers as well as the social security contributions and payroll taxes paid by their employers. Results reported include the marginal and average tax burden for eight different family types.

Methodological information is available for personal income tax systems, compulsory social security contributions to schemes operated within the government sector, universal cash transfers as well as recent changes in the tax/benefit system. The methodology also includes the parameter values and tax equations underlying the data.


The national currency is the Zloty (PLN). In 2018, PLN 3.61 was equal to USD 1. In that year, the average worker earned PLN 54 191 (Secretariat Estimate).

1. Personal income tax system

An individual being a tax resident in Poland is liable to tax on the basis of world-wide income, irrespective of the source and origin of that income. (The term “residency” is understood similarly to Article 4 paragraph 2 point a) of the OECD Model Tax Convention on Income and Capital).

1.1. Central government income tax

1.1.1. Tax unit

Individuals are taxed on their own income, but couples married during the whole calendar year1 can opt to be taxed on their joint income. In the latter case, the ‘splitting’ system applies: the tax bill for a couple is twice the income tax due on half of joint income, provided the joint income does not include capital income taxed at the flat 19% rate. Single individuals with dependent children are also entitled to use the splitting system (their family quotient is two). For the purpose of this report, it is assumed that married couples are taxed on joint income. Tax base Gross employment income

For taxation purposes, taxable gross employment income in Poland includes both cash income and the value of benefits in kind. More specifically, gross employment income includes base salary, overtime payments, bonuses, awards, compensation for unused holidays, and costs that are paid in full or in part by the employer on behalf of the employee.

1.1.2. Tax allowances and tax credits Standard reliefs

  • Basic relief: A non-refundable tax credit of:2

    • PLN 1 440 – for the tax base not higher than PLN 8 000;

    • PLN 1 440 minus the amount resulting from the following formula: PLN 883.98 × (tax base PLN 8 000) ÷ PLN 5 000, for the tax base higher than PLN 8 000 and not higher than PLN 13 000;

    • PLN 556.02 - for the tax base higher than PLN 13 000 and not higher than PLN 85 528;

    • PLN 556.02 minus the amount resulting from the following formula: PLN 556.02 × (tax base– PLN 85 528) ÷ PLN 41 472, for the tax base higher than PLN 85 528 and not higher than PLN 127 000

  • Marital status relief: None.

  • Relief for children: Yes3.

A taxpayer can deduct from the due tax decreased by the amount of health contributions specified in the PIT Act, the amount, which is equal for each month of raising a child:

  • PLN 92.67 (annually PLN 1 112.04) for the first child, if the income received by parents (married or single parent, who meets special requirements) doesn’t exceed in the tax year the amount of PLN 112 000. For other parent the threshold of income is PLN 56 000;

  • PLN 92.67 (annually PLN 1 112.04) for the second child;

  • PLN 166.67 (annually PLN 2 000.04) for the third child;

  • PLN 225.00 (annually PLN 2 700.00) for the fourth and every next child.

Since 1st of January 2015 taxpayers whose due tax is lower than the amount of relief for children, may claim for cash refund for amount of relief which has not been utilized. However, such cash refund cannot exceed the amount of deductible social security and health insurance contributions paid by taxpayer (with some exceptions).

  • Relief for health insurance contributions: A tax credit is almost equal to health insurance contribution paid to the National Health Fund. The contribution is 9% of the calculation basis whereas the tax credit is 7.75% of this basis.

  • Relief for other social security contributions: An allowance is provided for all social insurance contributions paid by the taxpayer.

  • Relief for selected work-related expenses: Standard deductions depend on the number of workplaces and on whether place of residence and workplace are within the same town/city or not. The annual amounts in PLN (deductible from income) are:

One workplace

Two/more workplaces

Workplace in the same town/city as place of residence

1 335.001

2 002.05

Workplace in different town/city as place of residence

1 668.72

2 502.56

Note: If the actual commuting expenses exceed standard deduction, relief can be determined by the actual expenses incurred solely on personal season tickets.

1. For the purpose of the calculations in this publication, it is assumed that the worker has the same town/city as place of residence. Main non-standard tax reliefs applicable to an average worker


  • Expenses for the purpose of rehabilitation incurred by a taxpayer who is a disabled person, or a taxpayer, who supports the disabled;

  • Equivalent of blood donations, donations made for the purposes of public benefit activity and of religious practice – in the amount of donation, no more than 6% of income;

  • Donations made for charity church care - in the amount of the donation;

  • Expenses incurred for the use of the Internet – a taxpayer is entitled to deduct the Internet tax allowance within the next two years, providing that during the phase preceded this period he did not deduct expenses for the use of the Internet (up to PLN 760);

  • Abolished allowance (since 2007 continued on the acquired right basis) for interests payments on mortgage loans raised no later than in 2006 on acquisition of housing property on the primary market – up to the amount of interests related to the part of loan not exceeding PLN 325 990 for investments finished in 2017.

Tax credits:

  • Donation made to public benefit organizations – up to 1% of due tax.4

  • Abolished tax credits (continued on the acquired rights basis), i.e. expenses for saving with the aim of buying a house or flat, the amount of social contributions paid on income of an unemployed person hired by a taxpayer in order to take care of their children and/or house.

1.1.3. Tax schedule

The tax schedule is as follows:

Tax base (in PLN)

Tax amount



less a basic tax credit


85 528

18% of the tax base,

85 528

PLN 15 395.04+ 32% of surplus over PLN 85 528

1.2. State and local income tax

There are no regional or local income taxes.

1.3. Wealth tax

There is no wealth tax.

2. Social Security Contributions

2.1. Employees’ contributions

Employees pay 13.71% of the gross wage. This contribution includes:

  • Pension insurance contribution – 9.76% of the gross wage5.3.65 percentage points of the pension contribution are treated as non-tax compulsory payments because these payments are either made to the OPF (1.46%) and to personal sub-account in ZUS (2.19%) or only to sub-account in ZUS (3.65%).Disability insurance contribution – 1.5% of the gross wage,

  • Sickness/maternity insurance contribution – 2.45% of the gross wage,

  • In case of pension and disability insurance, contributions are not paid on the part of the wage that exceeds PLN 133 290.6

2.2. Employers’ contributions

In respect of income paid under an employment contract with a Polish entity, employers have an obligation to pay social security contributions equal to 20.07% of gross wage. This value consists of:

  • 9.76 percentage points are aimed for pension insurance7. 3.65 percentage points of the pension contribution are treated as non-tax compulsory payments because these payments are either made to the OPF (1.46%) and to personal sub-account in ZUS (2.19%) or only to sub-account in ZUS (3.65%).

  • 6.5 percentage points are aimed for disability insurance,

  • 3.81 percentage points are aimed for other insurances i.e. 1.26 percentage points (on average) accident insurance, 2.45 percentage points for Labour Found and 0.1 percentage points for the Guaranteed Employee Benefit Fund.

  • In case of pension and disability insurance, contributions are not paid on the part of the wage that exceeds PLN 133 290.

3. Universal Cash Transfers

3.1. Transfers related to marital status


3.2. Transfers for dependent children

From 1st of November 2012 families where the average monthly income per household member for the previous period is no greater than PLN 539 or PLN 623 when there are one or more disabled children in the household) are entitled to family allowances. From 1st of November 2015 the income criteria will be as high as PLN 674 and PLN 764. Families receive PLN 89 (from 1st of November 2016 – PLN 95) monthly for a child no older than 5 years, PLN 118 (from 1st of November 2016 – PLN 124) monthly for a child of 5 up to 18 years old, and PLN 129 (from 1st of November 2016 – PLN 135) monthly for a child of 18 up to 24 years old. The calculations in this Report are based on the assumption that the children are aged between 5 and 11 years inclusive.

Single parents are entitled to a supplement of PLN 185 (from 1st of November 2016 – PLN 193) for each child up to a maximum of PLN 370 (from 1st of November 2016 – PLN 386) for all children (and PLN 265 (from 1st of November 2016 – PLN 273) for a disabled child up to a maximum of PLN 530 (from 1st of November 2016 – PLN 546) for all children).

There are several supplements to family allowances:

  • for large families – PLN 90 (from 1st of November 2016 – PLN 95) monthly for the 3rd and next children in the family;

  • for education of disabled children – PLN 80 (from 1st of November 2016 – PLN 90) monthly for children not older than 5 years and PLN 100 (from 1st of November 2016 – PLN 110) for children older than 5 years.

Parental benefit

On 1 January 2016 a parental benefit was introduced, aside from the already existing family and care benefits. The parental benefit is provided to families to which a child is born but whose members had not been eligible to a parental or maternity leave: students, the unemployed (regardless of registration with a labour office), people employed on the basis of civil law contracts, employees and people pursuing non-agricultural economic activity if they are not collecting maternity benefit. The parental benefit is granted regardless of income in the amount of PLN 1 000 a month for 52 weeks (after giving birth to one child in one labour), 65 weeks (after giving birth to two children in one labour), 67 weeks (after giving birth to three or four children in one labour) and for 71 weeks (after giving birth to five or more children in one labour).

Family 500 Plus Programme

Financial support for families with children

1 April 2016 (Act on state support for upbringing children entered into force 1 April 2016)

The Act on state support for upbringing children introduced new benefits- in amount of 500 PLN monthly per child until the child turns 18, which would be means-tested for the first child and available for all families for every additional child. The new benefit of PLN 500 a month (untaxed) is available for parents, actual guardian or legal guardian of a child until the child turns 18. The benefit will also be paid for the second child and any subsequent child without application of any income criteria. It will be paid for the first child if income of the family per one member does not exceed PLN 800 a month (PLN 1,200 if there is a disabled child in the family)8. Eligibility to this benefit is established for a year (from 1 October to 30 September).

Good Start Programme

Since 2018 a new benefit of 300 PLN was introduced. Every child that is attending school until it turns 20 is eligible for this benefit which is paid once a year at the start of the school year. There is no income test.

4. Main Changes in Tax/benefit Systems Since 2012

Since January 2017, the tax schedule has been changed by introduction of degressive basic tax credit. The work-related expenses, tax allowances, relieves are the same as in previous years.

Since 2012 there were also changes in Social Security Contribution. Since February 2014, 14.96% of the old-age insurance contribution (2.92 percentage points) are transferred by ZUS to a privately-managed fund (OPF) but since July 2014 this part of contribution will be transferred only if insured persons decides to – otherwise all 7.3 percentage points of the contributions will be passed to subaccount in ZUS.

5. Memorandum Items

5.1. Identification of AW and valuation of earnings

The Polish Central Statistical Office calculates average monthly wages and salaries for employees on the basis of reports of enterprises. The figures include overtime and bonus payments and also include information for part-time employees converted to full-time equivalents. Male and female workers are included. The information, which includes estimates for different sectors, is published in the monthly Statistical Bulletin.

5.2. Employers’ contributions to private pension, health and related schemes

No information provided.

2018 Parameter values

Average earnings/yr


54 191

Secretariat Estimate

Work expenses


1 335.001

Income tax schedule



85 528


Tax credits

Basic credit

















Health insurance







1 112.04


112 000

Social security contributions




old-age pension and disability pension insurance











other insurances






old-age pension and disability pension insurance











sickness insurance



Contribution ceiling


133 290

Family benefit


1 488

single parent additional family benefit



single parent additional family benefit ceiling



income limit


8 088

income limit for single parent


8 088

Family 500 Plus Programme





“Good start” benefit



1. Lump-sum annual work expenses for an employee having one workplace and living in the place (town, city) where the workplace is; employees living outside the city (town) where their workplace is may deduct 1668,72 PLN annually.

2018 Tax equations

The equations for the Polish system are mostly calculated on a family basis.

The standard functions which are used in the equations (Taper, MIN, Tax etc) are described in the technical note about tax equations. Two additional functions (Tax93 and ftax) have been incorporated to carry out an iterative calculation for central government tax. These allow for the fact that the church tax is calculated as 9% of Central Government tax and is also allowed as a deduction when calculating taxable income. Variable names are defined in the table of parameters above, within the equations table, or are the standard variables “married” and “children”. A reference to a variable with the affix “_total” indicates the sum of the relevant variable values for the principal and spouse. And the affixes “_princ” and “_spouse” indicate the value for the principal and spouse, respectively. Equations for a single person are as shown for the principal, with “_spouse” values taken as 0.


Line in country table and intermediate steps

Variable name






Quotient for tax calculation








work_exp+MIN(earn_spouse,work_exp)+SSC+SSC_old_e_OPF*MIN(earn, SSC_c)


Credits in taxable income





CG taxable income





CG tax before credits





Tax credits :

Basic credit




Health insurance



health_ins_credit*(earn-SSC-SSC_old_e_OPF*MIN(earn, SSC_c))

Child credit




Total tax credits





CG tax





State and local taxes





Employees' soc security



(earn-(MIN(earn, SSC_c)*(SSC_old_e+SSC_dis_e)+earn*SSC_s))*health_ins






Cash transfers



='MAX(0,(fam_net_inc<fam_ben_lim*(1+Married+Children)-240+(Children*fam_ben+(1-Married)*(Children>0)*MIN(fam_ben_Spsup*Children,fam_ben_Spsup_lim)))*(Children*fam_ben+(1-Married)*(Children>0)*MIN(fam_ben_Spsup*Children,fam_ben_Spsup_lim))-IF(fam_net_inc>fam_ben_lim*(1+Married+Children),fam_net_inc-fam_ben_lim*(1+Married+Children),0))+Positive(IF((fam_net_inc'/(1+Married+Children))<plus_ben_lim,Children*plus_ben,(Children-1)*plus_ben))+ (gs_ben*Children)





Employer's soc security




Key to range of equation:

B calculated separately for both principal earner and spouse,

P calculated for principal only (value taken as 0 for spouse calculation),

J calculated once only on a joint basis.


← 1. However, a widowed spouse is entitled to apply the joint income taxation.

← 2. Applicable only in a tax return.

← 3. It concerns a child of 18 years old or younger or a child up to 25 years old provided they are students or a disabled child irrespective of their age. The actual description in section 4.

← 4. This relief is distinct from an allowance for donations deducted from income.

← 5. Since July 2014 out of total 19.52% of social contributions 7.3% goes to subaccount in ZUS either – if voluntarily stated by insured person – 2.92% goes to account in open ended funds and 4.38% to subaccount in ZUS.

← 6. The contribution ceiling of pension and disability insurance funds for a given calendar year may not exceed thirty times the amount of the projected average monthly remuneration in the national economy for that year, as set forth in the Budgetary Act.

← 7. Since July 2014 out of total 19.52% of social contributions 7.3% goes to subaccount in ZUS either – if voluntarily stated by insured person – 2.92% goes to account in open ended funds and 4.38% to subaccount in ZUS.

← 8. Some of the features (namely, joint taxation and child tax credit) of the Polish tax system are optional and therefore can influence eligibility to “500+” family, and in a consequence tax wedge, in a non-linear way. As they both determine “net income for income test” and because of no tapering of “500+” sometimes it may be preferable not to use joint taxation or child tax credit (or to use it partially) in order to get the most appropriate net income to maximize the family benefit payments. As for now model treats both joint taxation and child tax credit as obligatory. With the parameters in the excel file (average wage etc.) it does not alter the results. However, if any of the parameters change, the previous statement may not hold.

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