The second tax threshold - a tax on the rich or on the middle class?
When the tax threshold of PLN 120,000 was introduced in 2022 as part of the Polish Deal (Polski Ład), it was meant to affect only the highest earners in Poland. Reality has turned out to be quite different. Ministry of Finance data from the 2025 PIT return season show that as many as 2.411 million taxpayers have already crossed the second tax threshold and paid 32% PIT on part of their income.
That is 480,000 more than a year earlier. By comparison, in 2022 only 3% of taxpayers filing under the tax scale were in the second bracket. Today the figure is almost 10%. The trend is unmistakable: more and more ordinary employees pay a tax that was meant to burden the financial elite.
To start paying 32% PIT on part of your income, you now need to earn only slightly more than PLN 12,000 gross per month. This is a level reached not only by managers and IT specialists, but increasingly also by experienced teachers, nurses working shifts and middle managers.
What is bracket creep and why should it concern you?
The mechanism that pushes more and more people into a higher tax bracket without any real increase in prosperity is known as bracket creep (in Polish: pełzająca progresja). It occurs when tax thresholds remain fixed in nominal terms while salaries rise - even if only in line with inflation.
The PLN 120,000 threshold has not been indexed since it was introduced in 2022. Meanwhile, cumulative inflation in 2022-2025 amounted to several dozen per cent. According to economists' estimates, the real value of the current threshold corresponds to only about PLN 91,000 in 2026 prices - a drop in purchasing power of nearly 24%.
In practice, this means that an employee who received a pay rise merely compensating for higher prices may suddenly find themselves in a higher tax bracket. Their real financial situation has not improved, but their tax burden has increased significantly. This is particularly painful for employees on employment contracts, who cannot choose a more favourable form of taxation.
Why employees pay the most - inequalities in the tax system
A key problem of the Polish tax system is that progressive taxation in practice falls mainly on people employed under an employment contract. The wealthiest - business owners, stock market investors and beneficiaries of family foundations - have a range of legal tax optimisation tools that allow them to pay much lower effective rates.
Here are the main differences in how various sources of income are taxed:
- Tax scale (employment contract) - 12% up to PLN 120,000, then 32% on the excess, plus 9% health insurance contribution and full ZUS contributions
- Flat tax (business activity) - a fixed 19% rate regardless of income level
- Lump-sum tax on recorded revenue - from 2% to 17%, including 8.5% for many services, 12% for programmers and 14% for doctors working on a B2B basis
- Capital income (dividends, stock market gains) - 19% with no health insurance contribution
- Family foundations - the possibility of deferring tax with an effective rate of around 15%
As a result, the marginal burden on employment income is disproportionately high compared with other forms of earning. An employee with a gross salary of PLN 13,000 may receive only about PLN 7,000 take-home pay in December, precisely because of the accumulation of tax in the second bracket in the last months of the year.
Is raising the threshold to PLN 140,000 realistic?
Proposals to raise the second tax threshold to PLN 140,000 per year have appeared in public debate. Such bills have been put forward by both the Polska 2050 party and the President. The Ministry of Finance remains sceptical, however - it estimates that the change would cost the state budget about PLN 12 billion and it is not formally carrying out any legislative work in this direction.
At the same time, the government is signalling work on PIT increases from 2027, which may mean a further increase in tax burdens. In this situation, both individuals and business owners should analyse their tax position now and consider the available optimisation options.
What you can do - legal ways to pay less tax
Although the tax system does not always favour employees, there are legal methods of optimising your tax burden that can help limit the negative effects of bracket creep. The most commonly used solutions include:
- Joint filing with your spouse - allows you to avoid the second threshold where one spouse earns considerably less
- Tax reliefs - including the child relief, the thermal modernisation relief, the IKZE relief and the relief for young people under 26
- Analysis of the form of employment - in some cases, moving to a business activity with flat tax or lump-sum tax may be more beneficial
- Tax-deductible costs - in particular the increased 50% costs for creators, which effectively reduce the tax base
- Income planning - consciously managing the timing of bonuses or additional income
Each of these strategies requires an individual analysis, however. What is beneficial for one taxpayer may prove unprofitable or even risky for another. The details are crucial - sources of income, family situation, career plans and time horizon.
When is it worth consulting a tax lawyer?
If your annual income is approaching PLN 120,000 or has already exceeded this amount, it is worth carrying out a comprehensive tax review. This is particularly important if you are planning to change your form of employment, considering starting a business, or want to make sure you are making full use of the available reliefs and deductions.
Professional legal help allows you not only to reduce your current tax burden, but also to avoid costly errors in your returns, which may result in interest or sanctions from the Polish Tax Office (urząd skarbowy).
Do not wait for the next tax increase - act now
Bracket creep is a mechanism that covers more taxpayers every year. The lack of indexation of tax thresholds combined with rising salaries means that the problem will deepen. Announcements of tax changes from 2027 add further uncertainty.
You do not have to wait passively for unfavourable changes, however. Contact our firm to arrange an individual tax consultation. Our specialists will analyse your situation, identify the available solutions and help you legally optimise your tax burden - before the next filing season brings unpleasant surprises.
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