The income tax threshold of PLN 120,000 has not been index-linked since 2022, causing a growing number of Poles to fall into the higher 32% bracket. By 2025, nearly 10% of taxpayers using the progressive scale – about 2.4 million people – are affected, mostly salaried employees. The richest, however, often avoid this rate through flat-tax schemes or family foundations.
Three years ago, only 800,000 taxpayers paid the higher rate. That number rose to 1.9 million last year and now stands at a record high of 2.4 million. The progressive tax system, designed to burden the wealthiest, is increasingly hitting ordinary workers. According to money.pl, the threshold of PLN 120,000 has remained frozen despite high inflation and wage growth, eroding the system’s intended fairness.
Who really pays the 32% rate?
Higher earners with business income, especially sole proprietorships, can choose a flat 19% tax, a lump-sum tax on revenue, or use family foundations with an effective rate of 15%. These options are largely unavailable to employees on contracts of employment. As a result, the progressive scale mainly catches white-collar workers earning gross monthly salaries above PLN 12,000.
– To start paying 32% tax on part of your income, a salary above PLN 12,000 gross per month is enough. With a gross salary of PLN 13,000 monthly, the December net pay drops to PLN 7,000 precisely because of the second tax bracket – stressed money.pl.
Government defends inaction
The Ministry of Finance has no plans to raise the threshold or increase the tax-free allowance, which remains at PLN 30,000. Deputy Finance Minister Jarosław Neneman, replying to a parliamentary query, explained that Poland entered an excessive deficit procedure in July 2024.
– The government is implementing a plan to reduce the general government deficit below 3% of GDP and stabilise public debt – said Neneman. Doubling the tax-free allowance would cost the state budget over PLN 50 billion annually, a sum deemed unaffordable under current fiscal constraints.
Political promises vs. fiscal reality
The ruling coalition had pledged during the election campaign to raise the tax-free allowance, but those plans have been shelved. The progressive tax scale, originally intended to redistribute income from the rich to the state, now functions as a de facto surcharge on the middle class. Critics argue that without indexation, the system automatically pushes more people into higher brackets each year through wage growth alone – a phenomenon known as fiscal drag.
– This is not about taxing the wealthy anymore; it is about taxing ordinary professionals like teachers, engineers and middle managers – an anonymous tax advisor noted in the original report. The government’s priority remains fiscal consolidation, and tax relief for the middle class appears to be off the table until at least 2027.
Źródło: WNP.PL, Fot. PAP/Leszek Szymański
