One of the key changes proposed under the Polish Deal is the increase of the tax-free threshold for income tax to PLN 30 000 for all taxpayers who calculate their tax according to the tax scale. In addition, under the Polish Deal, the second tax threshold will be raised to PLN 120 000, beyond which a 32% tax rate will apply.
The bill would change the amount of the healthcare contribution paid by businesses. As a rule, the calculation base for this contribution would be the actual income of a person running a business instead of a fixed payment. This will mean that the healthcare contribution will be 4.9% of income. A minimum contribution will also be introduced, of 9% of the minimum wage – next year PLN 270 (the minimum wage in 2022 has been set at PLN 3000). The proposed changes to the tax system also envisage that the health contribution will not be tax-deductible.
Employees will also pay a 9% healthcare contribution calculated on income. Moreover, it will no longer be possible to deduct 7.75% of the healthcare contribution calculation base from tax. In the case of some employees, this effect will be compensated by the increase of the tax scale threshold (from PLN 85,528 to PLN 120,000) and the introduction of the middle class relief, available to persons with income from an employment relationship up to PLN 133,692 per year. Employees whose income level makes it impossible to take advantage of the middle class relief will be in a different situation. These are persons earning more than PLN 11,141 gross per month. In their case, the proposed changes will reduce the level of their net salaries. This may cause an increase in labor costs, as these employees may demand pay increases to compensate for the net amount paid to date.
The middle class relief will be calculated by an algorithm to indicate the relief entitlement. This algorithm will be included in the e-PIT service. It is addressed to taxpayers employed on the basis of a service relationship, employment relationship, contracted work, or co-operative employment relationship.
The changes also involve the introduction of a new deduction from income in respect of contributions paid to trade unions by their members. Membership fees paid in a tax year to a trade union, documented with a payment receipt, will be deductible. The amount of membership fees paid in the tax year would be deductible, but not more than PLN 300.
The regulations are intended to come into force on January 1, 2022. However, the tax and contribution changes are to be introduced by November (announced in the media by the Prime Minister).