Lump-Sum Tax and Costs in Poland in 2026 — What You Cannot Deduct and What Still Reduces Revenue

Under lump-sum tax, you calculate tax on revenue, not income. Fuel, leasing, equipment, premises, advertising, salaries and subcontractors do not reduce the lump-sum tax base, even when they are related to the business.

What you cannot deduct as a cost

Lump-sum tax does not allow revenue to be reduced by ordinary business expenses, including:

• purchases of goods and materials,
• fuel, servicing and car leasing,
• equipment, telephone and software,
• rent and utilities,
• advertising and subcontractor services,
• salaries and contributions financed by the employer,
• depreciation of fixed assets.

An invoice is still needed for VAT, asset records, inspections and profitability assessment. It does not, however, create a cost in PIT-28.

What may reduce revenue

The Act allows deductions that are not ordinary business costs. The most common are:

• the business owner's own paid social insurance contributions, if not deducted elsewhere,
• 50% of the business owner's own paid health contribution from activity taxed under lump-sum tax,
• IKZE contributions — up to 16 956 zł for a business owner in 2026,
• selected donations,
• rehabilitation relief,
• internet relief,
• thermal modernization relief,
• certain losses from previous years, if the regulations allow them to be settled against this source.

Reliefs have their own limits and conditions. They should not be called business costs.

Health contribution in 2026

The monthly contribution for a lump-sum taxpayer is:

• 498,35 zł up to 60 000 zł of revenue,
• 830,58 zł after exceeding 60 000 zł and up to 300 000 zł,
• 1 495,04 zł after exceeding 300 000 zł.

If the lowest threshold applies throughout the year, you will pay 5 980,20 zł, but you will deduct 2 990,10 zł from revenue, not the full amount.

Example: revenue of 100 000 zł

A business owner has 100 000 zł of revenue taxed at 8,5% and 40 000 zł of actual business expenses.

Under lump-sum tax:

• the 40 000 zł of costs does not reduce revenue,
• permitted deductions, such as the business owner's own contributions, may be applied,
• tax is calculated on revenue after these deductions.

Under the tax scale or flat tax, the starting point would be income, meaning revenue minus tax-deductible costs. A lower lump-sum rate alone therefore does not determine the result.

How to compare the forms

Compare in one model:

1. the correct lump-sum rate,
2. revenue and actual costs,
3. social insurance contributions,
4. the health contribution for each form,
5. the tax-free amount and reliefs under the tax scale,
6. the option to file jointly,
7. the taxpayer's other income.

For several types of services, revenue must also be correctly allocated to the relevant lump-sum rates.

Employee under lump-sum tax

A lump-sum taxpayer may hire employees and contractors. Salaries, mandate-contract remuneration and payer contributions remain cash expenses with no effect on the lump-sum tax base.

This is one reason why a low-margin business with high personnel costs should compare lump-sum tax with income-based forms especially carefully.

Sources

• Podatki.gov.pl — lump-sum tax on recorded revenue
• Podatki.gov.pl — deduction of the health contribution under lump-sum tax
• Lump-Sum Tax Act — ELI

Want to compare forms of taxation?

Oxyok provides accounting for sole proprietorships — from 49 zł + VAT per month.

Email Paweł or see Oxyok accounting.

This material is general in nature. The result depends on the rate, costs, contributions and reliefs.