From a few dozen groszy to almost two hundred zlotys – this is the impact of the middle class tax relief on the monthly net salary, i.e. how much the employee gets on hand. We present calculations for various levels of earnings.
Middle class relief – what is it?
A relief for the middle class concerns, inter alia, persons employed on a full-time basis and the self-employed who settle accounts according to the scale, achieving annual revenues in the range from PLN 68,412 to PLN 133,692.
This means that the relief for the middle class in 2022 is granted to people who they earn from PLN 5,701 to PLN 11,141 gross per month. For these employees, the allowance is calculated automatically.
Middle Class Relief – What Does It Relate to?
“The legislator’s goal was to introduce a mechanism that would prevent people earning around PLN 6,000-11,000 gross a month from losing as a result of the tax reform. However, the wording of the regulations does not guarantee that this goal will be achieved, so it is worth reading the structure of the tax relief now to avoid disappointments in submitting the annual tax return “- points out Małgorzata Samborska from Grant Thornton.
The tax adviser explains that when it comes to employees, it’s important to remember that this is about “all income, not just gross salary”. Income also includes bonuses, awards, free benefits, overtime pay, lump sum for private use of a company car, etc.
“People who earn revenues, e.g. from contracts of mandate / work / revenues from management contracts, remuneration of the management board on the basis of appointment, other sources (e.g. social security benefits such as sickness benefit or maternity benefit) / business activity settled at a flat rate – will not benefit from the right to a discount “- emphasizes Samborska.
Middle Class Relief and Salary. Calculations
As the expert adds, in the case of employees, the allowance is settled by the employer and is obliged to take into account the allowance for the middle class, calculating the amount of the advance payment for PIT every month in each case when the employee’s monthly income from the employment relationship is within the following ranges:
The 1st threshold of the relief is: PLN 5,701 – 8,549, the 2nd threshold of the relief: PLN 8,550 – 11,141.
Samborska calculated the impact of the tax relief for the middle class depending on earnings. A person earning PLN 5,701 gross per month will gain PLN 0.30, PLN 6,000 – PLN 20, PLN 7,000 – PLN 87, PLN 8,000 – PLN 154, and PLN 8,549 – PLN 190.
In turn, employees from the 2nd threshold will benefit in the case of a monthly one gross remuneration in the amount of PLN 9,000 – PLN 158, 10,000 PLN – 84 PLN, and 11,141 PLN – 0.20 PLN.
A relief for the middle class. Watch out for exceeding the threshold
“As a rule, however, on a monthly basis, the tax relief is calculated in relation to the income of a given month, without taking into account the annual income. Thus, it may happen that the employer, acting in accordance with the regulations, during the tax year will be with respect to a given employee a month, or only in selected months, calculates a middle class allowance, while in the annual settlement it will turn out that the employee is not entitled to this allowance “- explains Samborska.
What does it mean in practice, if at the end of the year it turns out that we are not entitled to the tax relief, because, for example, we have exceeded the income threshold by even PLN 1? The need to return to the tax office any profits from the tax relief on the occasion of the annual settlement. Therefore, at least some employees should consider submitting an application to the employer not to take it into account when determining the monthly remuneration on hand.
Read also: Is it worth applying for non-middle class tax relief? >>>
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