Only working retirees or those running JDGs with income in the range of 5,701 – 11,141 per month (i.e. from PLN 68,412 to PLN 133,692 annually) will benefit from the allowance for the middle class.
No, pensioners do not have to submit PIT-2 to ZUS. The tax relief is calculated automatically when paying your retirement benefits. On the other hand, working pensioners cannot take advantage of the tax relief with their current employer again.
Which means an increase in the free amount to 30 thousand. PLN for pensioners?
This means that retirement benefits up to the amount of PLN 30,000 PLN are exempt from taxation, which in turn translates into higher net pensions.
Do all retirees with the benefit above 2.5 thousand? PLN will lose on the Polish Lada?
No, such a general conclusion cannot be drawn. Beneficiaries receiving old-age pensions up to 2.5 thousand PLN will not pay the tax at all, while the others will pay only on amounts exceeding the free amount of PLN 30,000. zloty.
At the same time, everyone, both those with benefits up to 2.5 thousand and above this amount, will have to pay the full health insurance premium. The threshold from which retirees start to receive the lower benefit is PLN 4,920. This limit is different than for other income, e.g. principals (who, due to the lack of the right to apply the middle class tax relief, lose more than 5,700 annually, this may be completely different on a monthly basis), because pensions are not burdened with ZUS contributions. Above this amount, as the middle class tax credit cannot be applied, your net pay will be lower.
But the way we hear is to change through an amendment to the act, which is to be sent to the Sejm.
Does the Polish Deal change anything for the participants of Employee Capital Plans?
As for participation itself, and the method of calculating payments does not change. However, it should be remembered that for employee participants, the amount of the employer’s contribution, which is the taxable amount (income), will be included in the income on which the entitlement to the (middle class) employee relief depends.
Therefore, participation in the PPK may result in exceeding the income limit entitling to a relief – PLN 11,141, but on the other hand, it may increase the income above PLN 5,701, and then the discount will be charged. It is only necessary to remember that with the income close to the upper or lower limit of the middle class tax credit, the amount of this tax credit is low.
How does the Polish Order affect retirees who receive benefits and earn extra money?
Retirees who continue to work will experience a reduction in the net amount of their monthly salary under their employment contract. This is due to the fact that the tax-free amount is first settled by the Social Insurance Institution (ZUS). This means that from the employment contract they will pay the full tax advance, not reduced by the amount of the so-called tax relief – PLN 425 and the entire health insurance contribution. If it is not possible to consume the entire amount of the pension (with low benefits), its recovery will be possible only with the annual tax settlement.
It is worth pointing out that the Polish Governance introduces a new “PIT-0” tax relief for working seniors, but it only applies to people who, despite the right to receive a pension, do not receive it.
Some people, e.g. teachers, saw lower remuneration at the beginning of January due to the entry into force of the Polish Order. There are also people in the protective period before retirement. What are they supposed to do?
The provisions of the Polish Governance do not provide for any additional protection for pre-retirement workers. First of all, everyone should analyze their tax situation individually.
You can find more questions and answers in connection with the Polish Order and other areas here.
The answers to the questions were developed by:
Monika Smulewicz, Partner, Payroll and HR Outsourcing, Grant Thornton
Małgorzata Samborska, Partner, Tax Advisory, Grant Thornton
Agnieszka Wachowicz, Manager, Payroll and HR Outsourcing, Grant Thornton