Maciej Jankowski

maciej.jankowski@ptpodatki.pl

Poland’s current tax scale has two distinctive features. First, it is characterized by a sharp and particularly steep increase in the tax rate: once the PLN 120,000 threshold is exceeded, the rate rises by as much as 20 percentage points, from 12% to 32%. Second, the top rate applies at a relatively low income level. According to 2025 data, the PLN 120,000 threshold represents just 112% of the average annual salary in the national economy.

It can therefore be argued that the tax scale has clearly failed to keep pace with the rapid growth in wages in recent years. Since 2020, average earnings in the national economy have increased by 72%.

This phenomenon should also be examined from the perspective of the overall tax wedge. As wages increased, the cap on the contribution assessment base (the so-called 30-times limit) also rose significantly. As recently as 2022, it stood at only 1.5 times the income tax threshold, at PLN 177,660. As a result, after exceeding PLN 120,000 in taxable income, the highest-paid individuals would relatively quickly stop paying pension and disability insurance contributions, cushioning the sharp increase in the PIT rate. Today, the 30-times limit is 2.4 times the tax threshold, at PLN 282,600. Consequently, a significantly larger proportion of income is now subject to the maximum tax and contribution burden, which exceeds 50%.

The current structure of the tax and social security system gives rise to a number of distortions. Higher-paid employees experience a painful drop in their take-home pay during the year, while the sharp increase in the burden once income exceeds PLN 120,000 has created a strong incentive to seek tax optimization arrangements, such as switching to a business-to-business (B2B) model.

The proposal to raise the tax threshold to PLN 130,000 and smooth the jump between tax brackets by introducing an intermediate 24% rate for income between PLN 130,000 and PLN 150,000 should therefore be assessed unequivocally positively. It is worth noting, however, that the measure has a limited scope. It applies to an income band of just PLN 30,000, between PLN 120,000 and PLN 150,000. It is therefore difficult to describe this as a revolution: the structural shortcomings identified above will merely be given a cosmetic fix. Poland’s tax scale will remain steep, and the top tax rate will still apply at a relatively modest income level.

The announced reform also includes unfavorable changes. Once again, the government plans to target the lump-sum tax regime, which it has identified as a common component of tax optimization arrangements. These include arrangements involving tax arbitrage between shareholders and companies, as well as mechanisms used to avoid the solidarity levy. The revenue threshold for this form of taxation is set to be reduced eightfold, to EUR 250,000. The solidarity levy itself is expected to increase by one percentage point, while additional revenue is also expected to come from raising the CIT rate for the largest companies to 22%. In this case, the effectiveness of tax collection will remain a key challenge.

Perhaps the most significant consequence of the proposed changes, however, is that the planned reform effectively rules out the prospect of increasing the personal income tax allowance in the coming years. Such an increase would provide crucial support for the lowest earners. The main beneficiaries of the proposed reform will instead be taxpayers with above-average incomes.