The income tax advance payment (zaliczka na podatek dochodowy) is one of the key elements of the Polish tax system, and it often worries new business owners. The main reason is that you have to make a payment without a tax return that documents it. Once you understand the detailed rules for paying advances, you can operate smoothly within the tax system and stop worrying about the lack of traditional paperwork. Our accounting office calculates the advance due for each month or quarter for its clients.
The income tax advance system has changed significantly in recent years, and these changes have simplified procedures for entrepreneurs. Today, entrepreneurs pay the calculated advance directly to their tax micro-account (mikrorachunek podatkowy), stating its type and settlement period in the transfer. If no advance is due for a given period, no payment is made and you do not have to report this to the tax office (urząd skarbowy).
Under the tax scale (12% and 32%), the advance is calculated taking into account the tax-reducing amount, which in 2026 is still PLN 3,600 a year, and the obligation to pay starts from the month in which your income since the beginning of the year exceeds PLN 30,000. Under the flat 19% tax (podatek liniowy), the tax-reducing amount does not apply
History of changes in the tax advance system
Until the end of 2006, entrepreneurs had to document income tax with a return. Under the tax scale, the PIT-5 return was used, and under the flat tax the PIT-5L return. This system required entrepreneurs not only to calculate and pay the advance, but also to prepare and file the relevant documents.
The breakthrough came on 1 January 2007, when the obligation to prepare periodic income tax returns was abolished completely. This reform significantly simplified administrative procedures for entrepreneurs, removing the need to prepare monthly or quarterly tax returns.
Today's system is simpler and more efficient. Entrepreneurs only pay the calculated advance to their tax micro-account, stating the form symbol and the period in the transfer order, for example PIT-36 and 26M02 (February 2026). This identification allows the tax authorities to allocate the payment correctly to the right taxpayer and settlement period.
If no advance is due for a given period, the entrepreneur makes no payment and does not report this to the tax office. Not having to report a zero advance greatly simplifies administration
Income tax advance payment deadlines
Income tax advances are settled monthly or quarterly. Quarterly settlement is available to small taxpayers (mały podatnik) and taxpayers starting a business, and under the flat-rate tax on recorded revenue (ryczałt) – to taxpayers starting a business and those whose revenue in the previous year did not exceed EUR 200,000. Whichever system you use, the payment deadlines are the same for all forms of taxation: the tax scale, the flat tax and the flat-rate tax on recorded revenue.
Monthly settlement
If you settle monthly, the income tax advance is due by the 20th day of the month following the month to which the advance relates. This means that the advance for January must be paid by 20 February, the advance for February by 20 March, and so on throughout the tax year.
Quarterly settlement
If you settle quarterly, the advance must be paid by the 20th day of the month following the quarter to which it relates. For example, the advance for the first quarter (January–March) must be paid by 20 April, for the second quarter by 20 July, for the third quarter by 20 October and for the fourth quarter by 20 January of the following year.
If the 20th of the month falls on a public holiday or a non-working day, the advance must be paid no later than the first working day after the 20th. This rule means that entrepreneurs do not suffer consequences for delays caused by the calendar
The choice between monthly and quarterly settlement matters for managing your company's cash flow. Monthly settlement spreads the tax burden more evenly over time, while quarterly settlement lets you use the funds for longer before transferring them to the tax office.
The PLN 1,000 limit for advances
One of the most important reliefs in the income tax advance system is the option to defer payment when the advance does not exceed PLN 1,000. This rule makes life much easier for small businesses, which may generate low income in their first periods of activity. The provision (Article 44(15) of the PIT Act) applies to advances under the tax scale and the flat tax – there is no such rule under the flat-rate tax on recorded revenue.
The rule means that you do not have to pay an advance to the tax office if the tax due on income earned since the beginning of the year, reduced by the advances already paid, does not exceed PLN 1,000. You can therefore postpone the payment instead of following the standard deadline of the 20th of the following month.
How the limit works
The PLN 1,000 limit is calculated cumulatively from the beginning of the tax year. This means that if the advance for January is PLN 500, the entrepreneur does not have to pay it. If the advance for February is then PLN 700, the total of both advances exceeds the limit (500 + 700 = PLN 1,200), so the entire accumulated amount must be paid.
- Calculate the advance for the current settlement period
- Add up all unpaid advances since the beginning of the year
- Check whether the total exceeds PLN 1,000
- If it does, pay the entire accumulated amount
- If it does not, you can defer the payment to the next period
Importantly, when you exceed the limit and have to pay the accumulated amount, no late-payment interest arises on the earlier advances. Under tax law, the taxpayer was not obliged to pay them earlier
Practical example of the limit
Consider an entrepreneur running a JDG (sole proprietorship) taxed under the general rules (the tax scale) and settling income tax monthly. The advance for January 2026 was PLN 500. As it does not exceed the PLN 1,000 limit, the entrepreneur does not pay it to the tax office.
In February the advance is PLN 700, so the total advances for January and February exceed the statutory limit (500 + 700 = PLN 1,200). The entrepreneur must then pay the entire accumulated amount of PLN 1,200. The key point is that no interest arises for the late payment of the January advance.
In March the advance is PLN 500 again. The entrepreneur can defer payment once more, because the tax due on income earned since the beginning of the year, reduced by the advances paid since the beginning of the year, has not exceeded the statutory limit.
| Month | Monthly advance | Total unpaid | Payment required | Amount to pay |
|---|---|---|---|---|
| January | PLN 500 | PLN 500 | No | PLN 0 |
| February | PLN 700 | PLN 1,200 | Yes | PLN 1,200 |
| March | PLN 500 | PLN 500 | No | PLN 0 |
| April | PLN 600 | PLN 1,100 | Yes | PLN 1,100 |
Rules for calculating income tax advances
The income tax advance is calculated on the basis of revenue less tax-deductible costs. The fundamental principle of the system is cumulative calculation from the beginning of the tax year, which means that each subsequent advance takes into account all revenue and costs incurred since January of that year.
The cumulative method
When calculating the advance for May, all revenue and costs from January up to and including May are taken into account. This method ensures that tax is calculated on the actual income earned over the whole period, not just in a single month or quarter.
The cumulative system matters for tax fairness. If an entrepreneur had high revenue in January but incurred significant costs in February, the February advance will take into account both the January revenue and the February costs, which may result in a lower advance or no advance at all.
The income tax advance is finally settled in the annual PIT return filed after the end of the tax year, by 30 April of the following year. The difference between the advances paid and the tax due for the whole year is paid in addition or refunded
Alternative method – the simplified advance
An alternative to the standard way of calculating advances is the simplified income tax advance. It is paid in the same amount throughout the tax year, which makes the tax burden predictable and helps with financial planning.
The simplified advance is 1/12 of the tax calculated on the business income shown in the tax return filed in the year before the given tax year (and if that return showed no income above PLN 30,000 – in the return from two years earlier). You report this choice in the annual return for the year in which you used it, and you must apply it for the whole year (Article 44(6b)–(6d) of the PIT Act). It is not available to taxpayers who started a business for the first time in the given year or the previous year (Article 44(6e)).
- The simplified advance is paid in a fixed amount throughout the year
- You report the choice in the annual tax return
- The amount is based on income from the return filed in the previous year
- It makes the tax burden predictable
- It makes financial planning easier for the business
How ZUS contributions affect tax advances
The income tax base is reduced by the social security contributions paid to ZUS (Social Insurance Institution). This rule is fundamental for calculating advances, because these contributions are deducted from income (Article 26(1)(2)(a) of the PIT Act, and under the flat tax Article 30c(2)(1)), which directly affects the amount of tax payable.
How social security contributions are deducted
Social security contributions can be deducted from the tax base in the month in which they were paid. This means that the tax base for February can be reduced by the social security contributions for January paid in February. This rule helps you manage your tax burden effectively.
Under the flat tax, the annual limit for deducting the health insurance contribution in 2026 is PLN 14,100. This is the maximum amount of contributions that can be deducted from income or included in costs in a tax year (Article 30c(2)(2) of the PIT Act). The limit matters especially for entrepreneurs with high income, because the health contribution under the flat tax is 4.9 percent of income. Under the tax scale, the health contribution is not deductible.
Under the flat-rate tax on recorded revenue, revenue may be reduced by 50 percent of the health insurance contributions paid. This preference reflects the nature of ryczałt, where the tax base is revenue, not income
Settling tax losses
Income tax advances can be reduced by tax losses incurred in previous years. Losses can be settled for a limited time of 5 tax years and up to 50 percent of the amount of the loss in a single tax year.
Special rules apply to losses incurred from 2019 onwards, which can be settled once up to PLN 5 million or under the standard 50 percent method (Article 9(3) of the PIT Act). The part of the loss not deducted in this way is settled in the remaining years of the five-year period, subject to the limit of 50 percent of the loss per year.
Example of loss settlement: an entrepreneur incurred a loss of PLN 100,000 in 2022. In 2024 they earned income of PLN 80,000. Under the standard method they can deduct PLN 50,000 (50% of the loss), so advances will be calculated on income of PLN 30,000, and the remaining PLN 50,000 of the loss can be settled in later years (until 2027). With a one-off deduction they can reduce income by the full PLN 80,000 and settle the remaining PLN 20,000 in later years.
Practical aspects of paying advances
Paying income tax advances requires knowledge of the practical side of the process. Entrepreneurs must remember that advances are calculated cumulatively from the beginning of the year, so all revenue and costs since January of the given tax year have to be taken into account.
Identifying the payment
When paying an advance to the tax micro-account, it is crucial to identify the payment correctly. The transfer should state the type of tax and the period it relates to, for example PIT-36 and 26M03 for the March 2026 advance under the tax scale (under the flat tax the symbol is PIT-36L, under ryczałt PIT-28). Correct identification ensures that the tax system allocates the payment properly.
Consequences of late payment
Late payment of income tax advances results in late-payment interest. Interest is charged from the first day after the payment deadline up to and including the day of payment (Article 53 § 4 of the Tax Ordinance Act (Ordynacja podatkowa)). The interest rate is 200 percent of the NBP Lombard rate plus 2 percentage points, but not less than 8 percent (Article 56 § 1 of the Tax Ordinance Act).
The exception to the interest rule is when an advance was not paid on time because the PLN 1,000 limit was used. In that case no late-payment interest arises, because the taxpayer was not obliged to pay it earlier
Correcting advances
If an entrepreneur finds a mistake in an advance after paying it, they can correct it in the next advance. Because the calculation is cumulative, any errors are automatically corrected in later settlement periods. However, if an earlier advance was understated, late-payment interest may arise on the part not paid on time (Article 53 § 1–2 of the Tax Ordinance Act).
If an advance is overpaid, the entrepreneur can apply for a refund of the overpayment or have it offset against future tax liabilities. The overpayment is refunded on the basis of an application, after the tax authority has carried out the relevant checks.
Differences between taxation systems
The income tax advance system covers various forms of taxation, each with its own specific rules. Whichever form of taxation you choose, the advance payment deadlines remain the same, which simplifies the administration of the tax system.
The tax scale
Entrepreneurs taxed under the tax scale calculate advances using progressive tax rates. The first rate of 12 percent applies up to the threshold of PLN 120,000 of income, above which the higher rate of 32 percent applies. The advance is reduced by the tax-reducing amount of PLN 3,600 a year.
The flat tax
The flat tax has a fixed rate of 19 percent on all income. Entrepreneurs using this form of taxation calculate advances at a single rate, regardless of the amount of income earned. In this case the tax-reducing amount (PLN 3,600 a year) does not apply – it is part of the tax scale in Article 27(1) of the PIT Act.
Flat-rate tax on recorded revenue
The flat-rate tax on recorded revenue (ryczałt) is calculated on revenue, not on income. Ryczałt rates vary depending on the type of business and range from 2 percent to 17 percent. Entrepreneurs using ryczałt can reduce revenue by 50 percent of their health insurance contributions.
| Form of taxation | Tax base | Tax rate | Tax-reducing amount |
|---|---|---|---|
| Tax scale | Income | 12% / 32% | PLN 3,600 |
| Flat tax | Income | 19% | None |
| Ryczałt | Revenue | 2% - 17% | None (revenue reduced by 50% of the health contribution) |
Documenting and recording advances
Although there is no obligation to file periodic returns, entrepreneurs should keep proper records of how they calculate and pay income tax advances. These records are essential when preparing the annual PIT return and may be required during a tax audit.
Record of calculations
Entrepreneurs should keep a detailed record of advance calculations, with information on revenue, costs, the tax base and the amount of the advance for each settlement period. The record should be kept chronologically and make it possible to reconstruct how each advance was calculated.
Proof of payment
All proofs of advance payments should be kept for 5 years from the end of the year in which the tax payment deadline expired. Proofs of payment are the basis for showing the advances paid in the annual PIT return and may be required in tax proceedings.
Proper documentation of income tax advances makes it easier to prepare the annual PIT return and can help prevent problems during a tax audit. Keeping systematic records of calculations and storing proofs of payment are basic duties of every entrepreneur
