Tax thresholds and tax-free allowance in Poland in the year 2017

Tax thresholds are percentage rates of income tax from individuals. Paying this tax is an obligation of all individuals who do business or work for another employer (in which case the employer pays the tax and reduces the wage by that amount).

Tax thresholds in 2017 are the same as in 2016, despite the amended provisions of the law on personal income tax (in terms of the tax-free allowance).

The tax thresholds in 2017 are as follows:

- The first tax threshold - 18%; up to the amount of 85 528 PLN,

- The second tax threshold - 32%; above the amount of 85 528 PLN.

Remember that if you run a company and at the same time have income from other sources, in result exceeding a total income amount of 85 528 PLN, it pays to decide on flat-rate taxation. Otherwise you will reach the second tax threshold and will thus be required to pay more tax.

Tax-free allowance

The amount reducing the tax obligation (the tax free allowance) in the year 2017, which is to be deducted in the annual PIT tax return you will need to fill out in 2018, is:

- 1 188 PLN - for the taxable amount not exceeding 6 600 PLN;

- 1 188 PLN reduced by an amount equal to 631,98 PLN × (taxable amount reduced by 6 600 PLN) ÷ 4 400 PLN, if the tax base exceeds 6 600 PLN but does not exceed 11 000 PLN;

- 556,02 PLN - for the taxable amount exceeding 11 000 PLN but not exceeding 85 528 PLN;

- 556,02 PLN reduced by an amount equal to 556,02 PLN × (taxable amount reduced by 85 528 PLN) ÷ 41 472 PLN, if the tax base exceeds 85 528 PLN but does not exceed 127 000 PLN.

This means that in 2017 the tax-free allowance for low earners will increase to 6 600 PLN while individuals earning over 127 000 PLN per year will lose the right to deduct.

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