How Young People Under 26 Can Save on Taxes in Poland in 2025

In 2025, young individuals under the age of 26 in Poland can access beneficial tax breaks, allowing them to save significantly on their income tax obligations. This initiative, aimed at promoting financial freedom among the youth, raises important questions about eligibility, filing requirements, and the specific benefits available. Let’s delve into this important topic to understand how you can take full advantage of these provisions.

Who Qualifies for the Youth Tax Break?

According to Polish law (Article 21, paragraph 1, subparagraph 148 of the Personal Income Tax Act), individuals under 26 years of age are exempt from paying Personal Income Tax (PIT) on income derived from various employment types, including:

• Standard employment contracts (Umowa o pracę)
• Agency contracts (Umowa zlecenie)
• Official relations
• Freelance work
• Internships (including student internship programs)
• Maternity benefits

To benefit from this tax relief, eligible young people must ensure that their annual income does not exceed PLN 85,528. If their income falls within this limit, they will automatically qualify for the exemption, eliminating the need to file a tax return.

Tax Benefits for Foreigners

Foreign citizens can also take advantage of this youth tax break, provided they are recognized as tax residents in Poland. To meet this criterion, they must:

• Reside in Poland for more than 183 days per year
• Maintain a center of vital interests in Poland, which encompasses personal, social, and financial ties to the country. Relevant documentation is required to demonstrate these connections.

Non-residents are generally ineligible for this tax break, emphasizing the importance of establishing residency.

Filing Requirements: Who Needs to File a Declaration?

1. Income Exceeds PLN 85,528: If an individual's annual income surpasses the threshold, they will need to file a PIT-37 declaration for the taxable amount exceeding PLN 85,528.
2. Income from Other Sources: The youth tax exemption does not apply to income from certain categories, such as:
   • Business activities
   • Contracts for specific tasks (Umowa o dzieło)
   • Rental income
   • Foreign employment
   • Other non-qualifying income streams
     

Joint Filing for Young Couples

Marriage offers additional flexibility for young couples. If both spouses are under 26 and qualify for the youth tax break, they can each benefit from an exemption limit of PLN 85,528. However, it is important to note that the unused portion of one spouse's limit cannot be transferred to the other.

Maximizing Benefits in 2025

Young professionals can potentially maximize their tax savings by understanding the structure of income taxation in Poland. In 2025, the non-taxable minimum amount will be PLN 30,000. Therefore, if a young person earns up to PLN 85,528, they will not owe any Personal Income Tax. For income exceeding that limit, the non-taxable amount can help lower the tax base, minimizing overall tax liabilities. Income above PLN 115,528 will face taxation, with rates set at 12% for earnings up to PLN 120,000 and 32% for amounts exceeding that threshold.

Duration of the Tax Benefit

The youth tax benefit concludes on the day an individual turns 26. Following this date, they will no longer qualify for the exemption, even if earnings are related to contracts executed before reaching the age threshold. For comprehensive guidelines on filing tax returns in Poland, check out articles that explain the intricacies of PIT-37 and PIT-11 forms.

For more tailored advice and valuable job opportunities in Poland and other EU countries, reach out to us at Joras Ventures. We are here to assist you with useful information and connect you with top vacancies. Contact us at info@jorasventures.