For people under the age of 26 the Zero PIT will be applicable from 1 August 2019
Getting rid of the need for young people to complete a PIT does not mean that they do not have to pay social insurance contributions (ZUS). The allowance, which includes revenues from business, employment, home-based work, cooperative employment and commission contracts (except for those concluded with private persons) up to an amount not exceeding PLN 85,528 in the tax year (in 2019 the limit is lower and amounts to PLN 35,636.67). The amount of discount does not depend on the number of contracts and payers.
“Taxpayers below 26 years of age earning the gross amount of PLN 7,127 or less per month will not pay income tax at all. There will be no tax for shorter agreements with higher salaries as well, because the limit applies to the entire year. Revenues discounted from income tax will not be taken into account when the amount of the discount is calculated. For example the value of material benefits available under health and safety regulations, allowances and receivables for business trips. The above means that an employee may also not pay PIT, when the total value of the benefits received by them exceeds the limit.” Agnieszka Telakowska-Harasiewicz, senior associate, SSW Pragmatic Solutions.
The disount for young people does not eliminate the payment of contributions to social and health insurance. Regardless of the tax discount, the revenue constitutes the basis for social and health insurance contributions in the same scope as the currently applicable.
“The rule is that deduction (as appropriate, from revenue or tax) is not applied to contributions which are based on the discounted revenues, Therefore, a young taxpayer obtaining both a discount and taxed revenues in a given year will be able to deduct only the contributions related to taxed revenues in the annual settlement.” Patrycja Goździowska, partner, tax advisor, SSW Pragmatic Solutions
Note: a surplus of revenues over the discount limit will be subject to taxation according to the general rules. This will be calculated by use of the tax scale.