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All individuals earning income in Poland pay personal income tax (PIT). The rules for determining it are governed by the Act of 26 July 1991 on Personal Income Tax. The fundamental principle of this tax is progression. This means that a different tax rate applies depending on the amount of income. Poland’s tax system provides for two tax brackets, meaning income ranges that determine the applicable tax rate.
What tax brackets apply in 2026?
Poland’s system provides for two tax rates for income taxed under the general rules: 12% and 32%. Crucially, the bracket refers to income, meaning revenue less costs and certain deductions, rather than merely the amount credited to an account or shown on an invoice.
The 12% rate applies up to an annual tax base of PLN 120,000.
Once this amount is exceeded, the excess, meaning the portion of income above the limit, is taxed at 32%.
Who is subject to the income brackets?
Income brackets apply to individuals settling tax under the general rules, meaning the progressive tax scale. They matter primarily to people working under employment contracts or contracts of mandate, and entrepreneurs running sole proprietorships, provided they have not chosen flat-rate income tax or lump-sum taxation.
The tax-reducing amount and the tax-free allowance are related to tax brackets. The tax-reducing amount is the amount by which the taxpayer (employer) reduces the tax advance calculated for the month. Since July 2022, it has been PLN 300 per month. It is calculated using the following formula:
PLN 30,000 (tax-free allowance) × 12% (tax rate) = PLN 3,600
PLN 3,600 / 12 months = PLN 300 per month
Thanks to this arrangement, taxpayers reduce the tax withheld from their salary every month as advance payments and receive higher income. However, this does not happen automatically. For the tax-reducing amount to be reflected in their pay, taxpayers should submit a request to their employer to reduce the advance payment by 1/12 of the tax-reducing amount, using the PIT-2 declaration.
The tax-free allowance, in turn, is the maximum amount not covered by income tax, meaning no tax needs to be paid on it in the annual tax settlement. People with income not exceeding PLN 30,000 per year are entirely exempt from tax. Those with income above PLN 30,000 pay 12% tax until they exceed the second tax bracket.
In 2026, the tax-free allowance is PLN 30,000. Although taxpayers would like it to be raised, the Ministry of Finance states that this will not be possible in the coming quarters because it would excessively reduce budget revenue.
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Tax brackets in 2026 — table
Poland’s tax system has two tax brackets. No tax is payable if annual income does not exceed PLN 30,000.
Annual income | Tax rate | Notes |
Up to PLN 30,000 | 0% | Income does not exceed the tax-free allowance, so the taxpayer pays no tax |
PLN 30,001–120,000 | 12% | Taking into account a tax-reducing amount of PLN 3,600 per month |
Above PLN 120,000 | 32% | The higher rate applies only to the portion above PLN 120,000 — income up to this amount is taxed at 12% |
How much do you need to earn net to exceed the second tax bracket?
The second tax bracket is exceeded when the taxpayer’s income during the year exceeds PLN 120,000. Remember that the higher rate applies only to the portion of income exceeding that threshold, meaning the excess above PLN 120,000.
It is difficult to give an unequivocal answer to how much you need to earn to enter the second bracket. Imagine two people with monthly revenue of PLN 50,000. Each may enter the second bracket at a different point in the year, because tax rates depend on income, meaning revenue less tax-deductible costs. Looking at monthly revenue alone does not tell us about tax obligations.
However, if we rephrase the question and ask how much income is needed to exceed the second bracket, the answer is much clearer. Monthly income of PLN 10,001 is enough for part of the income to be taxed at the higher rate.
For an employee working under an employment contract, income means gross remuneration less ZUS contributions, approximately 13.71%, and tax-deductible costs of PLN 250 per month.
Employees commuting to work from another locality have higher tax-deductible costs of PLN 300, so their gross threshold is higher. The same applies to creators entitled to use 50% tax-deductible costs.
Tax bracket calculator
Various tax bracket calculators for 2026 are available online. They are designed similarly: someone wishing to check whether and when they will exceed the second bracket enters their monthly gross salary, tax-deductible costs and any additional bonuses relevant to their tax obligations.
The calculators take into account:
The 30-times ZUS contribution cap of PLN 282,600 — the annual contribution assessment base limit for 2026. Once it is exceeded, the taxpayer stops paying pension and disability insurance contributions, increasing their net pay towards the end of the year.
The young persons’ relief limit of PLN 85,528 — the limit up to which employees under 26 pay no PIT. Tax advance payments begin to be withheld once this amount is exceeded.
How can you avoid the second tax bracket?
There are legal ways to avoid exceeding the second tax bracket or postpone this unfavourable moment for personal finances. The most popular is filing jointly with a spouse. From a tax perspective, joint filing makes sense when one partner earns less. For example, a wife earned income of PLN 150,000, exceeding the second bracket. However, she files jointly with her husband, whose income was PLN 60,000. Their incomes must be added and divided by two. In this example, combined income is PLN 210,000, or PLN 105,000 per person. Both therefore remain in the first bracket.
To learn about other ways of reducing tax burdens and better plan household finances, it is worth consulting a tax adviser. We encourage you to contact the TaxCoach tax advisory firm to plan beneficial tax measures. The TaxCoach accounting team, in turn, guarantees correct and timely tax settlements. Our accountants remain at the client’s disposal and guide them through the monthly complexities of taxation.
We encourage you to explore our services and contact us to arrange a meeting during which we will learn about your needs and propose further steps.
Interested in this article? Explore our tax advisory services and see how we can help:
Summary
Frequently asked questions about tax brackets
What is the second tax bracket?
The second tax bracket is the threshold above which part of the income becomes subject to a higher tax rate. Importantly, the 32% rate applies only to income exceeding PLN 120,000. For example, if a taxpayer earned PLN 140,000, only PLN 20,000 would be subject to the higher rate.
What is income, and how does it differ from revenue?
Revenue is the value of benefits received or receivable, such as employment remuneration or amounts from selling goods and services. Income is revenue less the costs of earning it. For an employee, taxable income is not the same as net remuneration, the amount actually paid into their account after contributions and tax advance payments have been deducted.
What is the second tax bracket in 2026?
In 2026, the second bracket starts once income taxable under the progressive scale exceeds PLN 120,000. The taxpayer then pays PIT at 32%, but the higher rate applies only to the portion above PLN 120,000. Up to that amount, the 12% rate applies.
Are the tax-free allowance and the tax-reducing amount the same?
No. The tax-free allowance determines the income level up to which tax calculated under the progressive scale is PLN 0. In 2026, the allowance is PLN 30,000 per year.
The tax-reducing amount is directly linked to the allowance and equals PLN 3,600 per year, or 12% of PLN 30,000. This is the amount by which tax calculated under the progressive scale can be reduced in accordance with the applicable rules.
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