Changes for the Employees

The most significant changes are listed below:

Higher tax-free amount

Heretofore, the amount was PLN 8,000 and it was one of the lowest tax-free amounts in Europe. From January 1, 2022, the tax-free amount will be PLN 30,000, which means that individuals earning up to this amount will not pay Personal Income Tax (PIT).

Higher tax threshold

The new regulation provides for an increase in the PIT scale from PLN 85,528 to PLN 120,000 per year. Due to the change, individuals with an annual income of up to PLN 120,000 will pay tax using the 17% rate, while the individuals entering the higher income tax bracket will pay 32% rate.

Non-deductible health insurance contributions

A significant change that will affect every employee is the inability to deduct the health insurance contribution from the personal income tax due. In practice, this means a significant increase in the tax burden, which in some cases is offset by a higher tax-free amount and a higher tax threshold.

Tax Relief for Middle-Class

Tax relief for the middle class is a relief that is intended to compensate for negative changes for employees who earn between PLN 68,412 and PLN 133,692 per year. This limit does not include the amount of the author’s royalties tract for the transfer of proprietary copyrights, as well as revenues from the mandate contract or management contract.

Lump sum amount for using a company car for private purposes

According to the current regulations, the engine capacity is taken into account when determining the lump sum. After the changes, to determine the amount of the lump sum, the engine power will be taken into account, i.e. for the use of company cars with an engine power of up to 60 kW and electric vehicles or hydrogen-powered vehicles, the lump sum is PLN 250 per month. In the case of other cars – the lump sum is PLN 400 per month.

Who would be affected by the changes?

The changes will be beneficial or neutral for employees earning up to about PLN 13,000 gross a month. For other employees, the new regulations mean a reduction in net salary. This will that both Employees and Employer will lose out. In addition, the new regulation does not provide for changes that would increase the financial burden on the part of employers. Nevertheless, wage pressure may appear in many industries, which will result in the need to raise wages by the Employers.

Changes for employees

*Estimated ZUS CAP for 2022 – EUR 38 276

**Amounts are presented in EUR with NBP average rate as at 1.12.2021 being 4,64 PLN = 1 EUR

How can we help?

prepare the cost-effective remuneration structures for employees, including creative employees
analyze the possibility of introducing non-wage forms of remuneration, including additional benefits and incentive programs
increase employees’ awareness of the upcoming changes and their effects by preparing appropriate comparative calculations and conducting workshops

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