Tax-free amount 2026 - how much is it and who benefits from it in JDG — in Poland
The tax-free amount in 2026 is PLN 30,000. Guide for JDG: how the tax reduction amount of PLN 3,600 works, who can benefit, how to complete PIT-2 and when the tax-free amount does not matter (lump sum, linear).
The tax-free amount is PLN 30,000 - the amount on which you do not pay income tax. But this does not mean that the first PLN 30,000 of earnings is "free". It works differently than most people think.
In this guide, I explain how the tax-free allowance works in practice for sole proprietorships, who benefits from it and who loses money because of it.
How much is the tax-free amount in 2026?
PLN 30,000 per year - tax-free amount on the tax scale (general rules). Reduces tax by PLN 3,600 per year (PLN 300 per month).
This is a fixed amount from 2022 (Polish Order). It has not changed in 2026.
How it works in practice
The free allowance is not the amount you get. This is a mechanism to reduce your tax. Here's how it works:
- You calculate tax on your income (12% up to PLN 120,000, 32% above)
- You subtract PLN 3,600 (tax reducing amount)
- If the result is below zero, the tax is PLN 0
Tax-free allowance 2026 — table and comparison
See how the tax-reducing amount affects your taxes at different income levels. Tax-free amount: 30,000 zł, reducing amount: 3,600 zł.
Tax table by income
| Annual income | Tax before reduction | Reducing amount | Tax to pay | Effective rate |
|---|---|---|---|---|
| 0 zł | 0 zł | −3600 zł | 0 zł (exempt) | 0.0% |
| 15 000 zł | 1800 zł | −3600 zł | 0 zł (exempt) | 0.0% |
| 30 000 zł | 3600 zł | −3600 zł | 0 zł (exempt) | 0.0% |
| 45 000 zł | 5400 zł | −3600 zł | 1800 zł | 4.0% |
| 60 000 zł | 7200 zł | −3600 zł | 3600 zł | 6.0% |
| 90 000 zł | 10 800 zł | −3600 zł | 7200 zł | 8.0% |
| 120 000 zł | 14 400 zł | −3600 zł | 10 800 zł | 9.0% |
| 150 000 zł | 24 000 zł | −3600 zł | 20 400 zł | 13.6% |
| 200 000 zł | 40 000 zł | −3600 zł | 36 400 zł | 18.2% |
| 300 000 zł | 72 000 zł | −3600 zł | 68 400 zł | 22.8% |
Effective rate = actual tax ÷ income. “Exempt” = tax is 0 zł thanks to the tax-free allowance.
When does the tax scale with tax-free allowance win?
Comparison of three tax forms with low costs (costs = 0 for simplicity). Green = cheapest option at a given income.
| Income | Tax scale (with allowance) | Flat tax 19% | Lump sum 8.5% | Cheapest |
|---|---|---|---|---|
| 30 000 zł | 0 zł | 5700 zł | 2550 zł | ✓ Tax scale |
| 60 000 zł | 3600 zł | 11 400 zł | 5100 zł | ✓ Tax scale |
| 90 000 zł | 7200 zł | 17 100 zł | 7650 zł | ✓ Tax scale |
| 120 000 zł | 10 800 zł | 22 800 zł | 10 200 zł | ✓ Lump sum 8.5% |
| 150 000 zł | 20 400 zł | 28 500 zł | 12 750 zł | ✓ Lump sum 8.5% |
| 200 000 zł | 36 400 zł | 38 000 zł | 17 000 zł | ✓ Lump sum 8.5% |
| 300 000 zł | 68 400 zł | 57 000 zł | 25 500 zł | ✓ Lump sum 8.5% |
Lump sum calculated on revenue (no costs). With costs > 0, lump sum may be cheaper. Use the calculator below to check your situation.
Key rule: The tax scale with tax-free allowance is cheapest for incomes up to approx. 120,000 zł per year (if you have costs). Above 120,000 zł the second bracket of 32% kicks in and flat/lump sum become cheaper. Exception: joint settlement with a spouse doubles the threshold to 240,000 zł.
Want to know if the tax-free allowance is enough to make the tax scale worthwhile for you?
Rates and amounts based on the Polish PIT Act (Dz.U. 2025 poz. 163), art. 27 (rates) and art. 27f (reducing amount). Lump sum: Act on lump-sum income tax (Dz.U. 2025 poz. 775). The table does not include the health contribution, social security (ZUS), or additional reliefs.
Example: income PLN 20,000 per year
- Tax before the free amount: 20,000 × 12% = PLN 2,400
- Reducing amount: -PLN 3,600
- Tax payable: PLN 0 (because 2,400 − 3,600 < 0)
Example: income PLN 50,000 per year
- Tax before the free amount: 50,000 × 12% = PLN 6,000
- Reducing amount: -PLN 3,600
- Tax payable: PLN 2,400
Example: income PLN 120,000 per year
- Tax before the free amount: 120,000 × 12% = PLN 14,400
- Reducing amount: -PLN 3,600
- Tax payable: PLN 10,800
Tax-Free Allowance Calculator
Enter your annual income (revenue minus costs) to see how the tax-free allowance reduces your tax. Check joint settlement if you file with your spouse.
Tax scale
WITH TAX-FREE ALLOWANCETax-free allowance: 30 000 zł
Flat tax
NO TAX-FREE ALLOWANCENo tax-free allowance, no deductions, no joint settlement
The tax scale with tax-free allowance saves you 6960 zł per year compared to flat tax.
Not sure if the tax scale with tax-free allowance is best for you?
This calculator is for guidance only. It does not include additional deductions (children, internet, thermal modernization), loss carry-forward, or health contributions. Figures for tax year 2026.
Who can benefit from the free allowance?
The tax-free amount applies only on the tax scale (general rules). If you are on:
- Tax scale - yes, you have a tax allowance of PLN 30,000 ✓
- Flat tax (19%) - no, no tax allowance
- lump sum - no, no tax allowance
This is one of the most important differences between forms of taxation. If you're on a low income, a tax-free rate scale may be cheaper than a straight-line or lump-sum rate — even though the percentage rate (12%) is higher.
Exempt amount and PIT-2
PIT-2 is a declaration you submit to your employer to reduce your tax advances by PLN 300 per month (1/12 of the reducing amount).
- Salary employee - you submit PIT-2, the employer collects a smaller advance every month
- JDG on the tax scale - the reducing amount is automatically included in monthly advance payments (so-called "lump sum advance payment")
- Two sources of income - you submit PIT-2 to only one payer
⚠️ Important: You deduct the tax-free amount only once. If you have income from a full-time job and from JDG, you are entitled to a total of one amount reducing PLN 3,600 - not two.
Exempt amount and forms of taxation in JDG
This is a key decision. The choice of the form of taxation determines whether you benefit from the tax-free allowance:
Tax scale - you use the tax-free allowance
- Free amount: PLN 30,000
- Tax reducing amount: PLN 3,600 per year
- You can settle jointly with your spouse (double tax-free amount: PLN 60,000)
Flat tax - no tax allowance- 19% rate on the first zloty
- No free allowance, no reducing amount
- You cannot settle your taxes jointly with your spouse
- Profitable with high income (above PLN 120,000)
Lump sum - no tax allowance
- Income tax (excluding costs), rates from 2% to 17%
- No free allowance
- Profitable at low cost
Quick rule: If your income is below approximately PLN 80,000 per year, the tax scale with a tax-free allowance is usually cheaper than the flat tax scale. Higher - depends on costs.
Exempt amount and joint settlement with your spouse
If you settle jointly with your spouse, the tax-free amount double:
- Total: PLN 60,000 free allowance
- Total: PLN 7,200 amount reducing tax
But note - joint settlement is possible only on the tax scale. Linear and flat rate don't allow it.
Common settlement terms
- Marriage lasting the entire tax year
- Community of property (or separation by contract/law)
- Both spouses on the tax scale
- The sum of both incomes on the scale
FAQ
Is the tax-free amount the same as the tax-reducing amount?
No. The tax-free amount (PLN 30,000) is the amount of income on which you theoretically do not pay tax. The tax reducing amount (PLN 3,600) is the amount by which you reduce the calculated tax. These are two different concepts describing the same mechanism.
Is there a tax-free amount in the lump sum?
No. There is no tax-free allowance for the lump sum on recorded income. The tax is calculated from the first zloty of revenue, at a rate depending on the type of activity (2%-17%).
Is there a tax-free amount on the flat tax?
No. The 19% flat tax has no tax-free amount or tax-reducing amount. The tax is calculated as 19% of the entire income.
How much is the tax-free allowance for people under 26?
For people up to 26 years of age PIT-0 relief applies under an employment contract or mandate contract - zero tax up to PLN 85,528 per year. In JDG, this relief does not apply - business activity is excluded from it.
Does unregistered activities benefit from the tax-free allowance?
Unregistered activities are not automatically exempt from PIT. From 2026, the limit conditioning the lack of the obligation to register a business is calculated quarterly and amounts to 225% of the minimum wage, i.e. PLN 10,813.50 per quarter with the minimum wage of PLN 4,806. Income from unregistered activities is generally settled in PIT-36 on a scale; he can therefore use the tax-free amount together with other income taxed at a scale.
Legal basis
- Tax-free and tax-reducing amount: PIT Act, art. 27 — Dz.U. 2026 poz. 592
- Tax scale rates: PIT Act, art. 27 section 1 - the same legal act
- Relief for young people (PIT-0): Art. 21 section 1 point 148 - applies only to employment and mandate contracts, not JDG
- Joint settlement with your spouse: Art. 6 section 8 - concerns the tax scale