Poland Taxation: Part 3: PIT

in 2020 Katarzyna is working for a sweets factory in Warsaw and from January to the end of September also for a dry cleaner in pruszkow. calculate the flat rate cost for her in 2020 knowing that she lives in Pruszkow.

Solution:

Place of living: pruszkow

she works in two places. so she will have some exemptions for PIT.

From 1.01–31–12 Warszawa — 12month*300= 3600 PLN

From 1.01 till 30–09 Pruszkow — 9 months*250= 2250 PLN

Total: 5850 is the exemption but the limit in this case is 5400.

PIT Employment- Relief from Income

Social insurance is one of the reliefs from taxable income.

PIT Employment ZUS and NFZ:

ZUS: it is financed partly by employer and employee. the employer is a tax and ZUS emitter. Basis= Taxable Gross income from employment. (some exemptions: anniversary award (taxed but no ZUS), leaving award, benefits financed from the social fund.

Limited up to 157770 PLN (30 times of the base salary)for some contribution.

NFZ:

Example: what is the take home value of a person with 16000 PLN gross salary based on 2019 rules.

Calculation 2: the gross salary of John is 4000 PLN per month. he lives and works in Krakow. calculate net salary which he receives in the bank.

Solution: Salary gross: 4000

1. ZUS contribution: the base is gross salary

4000*(Pension+Disability+sickness)= 4000*(9,76%+1.5%+2.45%)= 4000*13.71=548 → transferred to ZUS till 15th of next month

NFZ calculation= Salary- ZUS financed by Employee

4000–548 = 3452 (Base of NFZ)

3452*9%=311 → ZUS (15th of next month)

3452*7.75= 268 relief

3. PIT

Rev: 4000

cost -250

Income= 4000–250 =3750

remove zus= 548

Tax base=3750–548=3202

3202*17%-525/12=500 this tax advance

tax advance to pay is= 500-relief of tax insurance=232 → tax office (20th of next month)

net salary: 2908

Example: Robert Earns 10,000 Per month. Calculate the amount of the tax that he has to pay each month, based on the calculations of 2018.

January Calculations:

Gross Salary: 10,000 PLN

Less: Social Security (13.71%): 1371 PLN

HSC Base: 8629 PLN

Less Allowable costs= 111

Taxable Income=8518

tax rate= 18% → Tax= 1533

Less tax free rate= 525/12=463= (463)

Total tax to be paid: 1070

AAdditional HSC: 1.25*8629=107

— — — — -

recieveable= 8518–1533+463–107= 7341

This is for the time that his salary is below the Bracket of 85258. if the taxable income summation increases to the value higher than this bracket, we use the taxation of 32%.

after 10 months he will reach the criteria. so the cumulated revenue in November should be calculated differently. as November is the month in which the bracket border is reached, we should consider it 18%, so the calculation of the tax will be the same, just the tax-free rate is not the same. and the tax free rate is 0. so the calculation will be:

Gross Salary: 10,000

Less Zus (13.71%) : 1371

— — — — — — — — — — -

Basis for HSC: 8629

Less Cost of revenue: 111

— — — — — — — — — — —

Taxable Income: 8518

tax rate: 18%

Tax: 1533

tax free rate: 0

Tax of HSC: 1.25%*8629 =107

— — — — — — — — — — —

total paid: 6985 -107= 6878