No income tax for young employees in Poland

The Polish parliament has recently passed a new bill exempting young employees from the obligation to pay their income tax (PIT). The so-called Zero PIT programme applies to all Polish residents under the age of 26 who are employed under a contract of employment (umowa o pracę) or a contract of mandate (umowa zlecenie) and whose total annual income does not exceed PLN 85,528 (around EUR 20,000). This year however, the tax relief cap is lower and amounts to PLN 35,636 - 5/12 of the yearly limit, since the act came into effect on 1 August 2019.

As explained by the Polish government, the aim of the new bill was to encourage young Polish citizens to plan their professional future and build their careers in their home country. Still, employees from abroad will also benefit from the Zero PIT programme, regardless of whether they reside and work in Poland permanently or temporarily, or if they are citizens of other European Union countries or third-country nationals.

However, it is worth noting that the new rules do not apply to paid student internships or specific-task contracts (umowa o dzieło) and that they do not exempt young employees from paying mandatory social and health insurance contributions (deducted by the employer from the employee’s monthly salary).

It is estimated that around 2 million Polish employees will benefit from the new tax bill. Job market experts believe that the Zero PIT programme may also attract more foreign employees to the Polish job market - nowadays, there seems to be a growing need for skilled workers in Poland, due to very low unemployment rates and labour shortages.

How do you avoid double taxation when living in Poland?

Learn more about tax residency certificate.