Zero PIT for employees and service providers under the age of 26


On 1 August 2019, the Act of 4 July 2019 amending the Act  on Personal Income Tax, the Act on Family Allowances and the Act on Health Services Financed from Public Funds, came into force  (Journal of Laws item 1394).

In Article 21 paragraph 1 sub-paragraph 148 of the PIT Act, the act introduced a new tax exemption item.

pit tax zero

According to it, the following items shall be free from income tax: 

  • revenues from labour based relationship,
  • revenues from employment relationship,
  • revenues from outwork,
  • revenues from cooperative member relationship,
  • revenues generated under a contract of mandate specified in Article 13 section 8 of PIT Act.

earned by tax payer under the age of 26 years with a threshold of PLN 85,528 in a given tax year.

This amount specified in the Act is an annual limit which will apply from 2020. Because the Act enters into force in August, the limit for 2019 is PLN 35,636.67 (PLN 85,528 : 12 x 5).

It is worth noting that income tax cut does not apply to young workers who work under a specific task contracts, apprenticeship contracts or contracts of mandate for less than PLN 200 gross (which are subject to flat rate income tax). Similarly, the exemption does not apply to sole traders under 26.  

The exemption does to apply to social security benefits either as they are not considered revenues from employment relationship.


Learn more: Lower PIT rate - to whom will it apply?


The eligibility for tax cut depends on the age of a tax payer at the time of earning the revenue and not concluding the employment contract or performing the work (the age will be determined upon reaching the age of 26).

The tax cut will not apply to revenues earned from 1 August 2019 to 31 December 2019, when calculating tax advances (a tax payer will settle the exemption in an annual tax  return for 2019) unless a tax payer submits to tax withholder a written declaration that revenues to be generated from 1 August 2019 to 31 December 2019 from sources specified in Article 21section 1 item 148 of the PIT Act will not exceed PLN 35,636.67 and therefore will be subject to tax cut under this provision.

A tax withholder who receives such declaration should discontinue withholding tax starting from the month following the month in which it received the declaration until the month in 2019 in which the revenue earned by the tax payer exceeds the annual limit or in which the tax payer reaches the age of 26.

Starting from 2020, employers withholding tax advances will apply the exemption automatically.  



Monika Roman
Director of Personnel Department
Contract Administration

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