The simplified income tax advance payment (uproszczona zaliczka) is one of the ways of paying income tax advances in Poland, and it makes settling taxes considerably easier for business owners. It lets you pay fixed monthly amounts of tax, calculated on the basis of income from previous tax years. This helps business owners plan their finances better and avoid calculating the advance every month.
The system of simplified advances was introduced to make life easier for business owners who run a stable business and want predictable tax charges. The rules on this way of paying tax have changed considerably in recent years, which has affected who can use simplified advances and on what terms.
Simplified income tax advances can be used only by taxpayers whose income comes from non-agricultural business activity. Individuals paying the flat-rate tax on recorded revenue (ryczałt) cannot pay advances in this simplified form
Changes in the rules on simplified advance payments
The most important change in the rules on simplified income tax advances was the abolition of the obligation to notify the tax office (urząd skarbowy) in advance of the intention to use this way of paying tax. Until the end of 2018, taxpayers had to file a special notice with the tax office no later than 20 February of the year in which they planned to use simplified advances.
From 2019 this requirement was repealed entirely, which made the procedure much simpler. Today the taxpayer does not have to notify the head of the tax office in advance about choosing simplified advances. However, the chosen method applies for the whole tax year (Article 44(6c)(2) of the PIT Act), and the taxpayer reports the choice in the annual tax return filed for the year in which the advances were paid in the simplified form (Article 44(6d)).
This change means fewer formalities, but not complete freedom during the year. The decision has to be made before paying the first advance for a given tax year – you cannot switch to simplified advances in the middle of the year or abandon them before the year ends.
If a taxpayer decides in 2026 to pay simplified advances, there is no need to inform the tax office beforehand. It is enough to state in the annual tax return filed for 2026 that the advances were paid in the simplified form
Who can use simplified advance payments in 2026
Simplified income tax advances are not available to all taxpayers. Under the PIT Act (personal income tax act), only taxpayers whose income comes from non-agricultural business activity can pay advances this way.
This means that simplified advances are open to owners of a JDG (sole proprietorship), whichever of these forms of taxation they have chosen. They can be business owners taxed under the tax scale (12% and 32%) as well as those who have chosen the flat 19% tax (podatek liniowy).
An important restriction is that individuals who have chosen the flat-rate tax on recorded revenue are excluded from simplified advances. This group of taxpayers has to pay in the standard way, calculating the amounts on the basis of current revenue. Calculating advances – under the lump-sum tax, the tax scale or the flat tax – is part of our accounting services.
Simplified advances must be paid monthly only. The rules do not allow them to be paid quarterly, even if the taxpayer meets the conditions for paying standard advances quarterly
Special restrictions apply to people starting a business. Taxpayers who start a business for the first time in a given tax year cannot use simplified advances. The same restriction applies to business owners who started a business for the first time in the previous tax year (Article 44(6e)). Simplified advances are also not used by an enterprise in probate (przedsiębiorstwo w spadku) (Article 44(6b)).
These restrictions follow from the fact that the amount of the simplified advance is calculated on the basis of income shown in previous tax years. New business owners do not yet have an income history on which the advance could be based.
Conditions for using simplified advance payments
To use simplified income tax advances, the taxpayer must meet a number of conditions set out in the tax rules. The basic condition is having income from non-agricultural business activity shown in the relevant tax returns from previous years.
The amount of the simplified advance is calculated on the basis of income shown in the tax return filed in the tax year preceding the given tax year. This means that a business owner planning to use simplified advances in 2026 will calculate them on the basis of income shown in the annual return filed in 2025, that is, the return for 2024.
If in that return the taxpayer did not show any income from non-agricultural business activity, or the income did not exceed PLN 30,000 (the tax-reducing amount of PLN 3,600 divided by the 12% rate), the advance is based on income shown in the return filed one year earlier. For advances for 2026, this would be the income shown in the return for 2023, filed in 2024.
If the taxpayer did not show income from non-agricultural business activity either in the preceding year or in the year two years earlier, or if in both periods the income did not exceed the amount equal to the tax-reducing amount divided by the lowest tax rate, simplified advances cannot be used
These conditions are meant to ensure that simplified advances are used only by business owners running a stable business that generates regular taxable income. The system is not designed for people whose business is occasional or generates minimal income.
Calculating the simplified advance under the tax scale
Business owners taxed under the tax scale calculate the simplified advance according to detailed rules set out in the tax legislation. The basis of the calculation is income from non-agricultural business activity shown in the relevant tax return from previous years.
The simplified advance is one twelfth of the tax calculated on business income using the applicable tax scale. In other words, the taxpayer first calculates the annual tax that would be due on the reference income and then divides it by twelve months.
Example calculation for a taxpayer taxed under the tax scale:
- Reference income from the return for 2024: PLN 67,654
- Tax calculated using the scale for 2026: 67,654 × 12% - 3,600 = PLN 4,518.48
- Monthly simplified advance: 4,518.48 ÷ 12 = PLN 376.54, rounded to the nearest full zloty: PLN 377 (Article 63 § 1 of the Tax Ordinance Act (Ordynacja podatkowa))
For taxpayers taxed under the tax scale, the simplified income tax advance equals one twelfth of the tax calculated on income from non-agricultural business activity using the applicable tax scale
This method ensures that the monthly advance reflects the business owner's actual tax burden, taking into account both the progressive tax scale and the tax-reducing amount. As a result, the taxpayer pays a fixed amount throughout the year that should be close to the actual tax due.
Calculating the simplified advance under the flat 19% tax
Taxpayers using the flat 19% tax calculate the simplified advance in a similar way, but taking into account the specific features of this form of taxation. The basis of the calculation is still income from non-agricultural business activity shown in the relevant tax return from previous years.
Under the flat tax, the simplified advance is one twelfth of the tax calculated at the 19% rate on income from non-agricultural business activity. The calculation is simpler than under the tax scale because there is no progression and no tax-reducing amount. The taxpayer may reduce the advance calculated this way by 19% of the health insurance contribution paid in the given month, within the annual limit for deducting the contribution (PLN 14,100 in 2026) – Article 44(6h) and (6j) of the PIT Act.
Procedure for calculating the simplified advance under the flat tax:
- Determine the reference income from the relevant year
- Calculate the annual tax: income × 19%
- Divide the annual amount by twelve months
- Obtain the monthly simplified advance
For taxpayers using the flat tax, the simplified advance is calculated as one twelfth of the tax at the 19% rate on income from non-agricultural business activity
This method is particularly useful for business owners running a stable business who want predictable tax charges. A fixed monthly amount makes financial planning easier and removes the need for monthly calculations.
Payment deadlines for simplified advances
Simplified income tax advances are subject to strictly defined payment deadlines, which are the same as for standard monthly advances. Knowing and meeting these deadlines is essential to avoid tax sanctions.
The basic payment deadline for a simplified advance is the 20th of each month for the previous month. This means that the advance for January must be paid by 20 February, for February by 20 March, and so on throughout the tax year.
A special deadline applies to the advance for the last month of the tax year. The advance for December must be paid by 20 January of the following year. This longer deadline takes into account the Christmas and New Year period and gives taxpayers extra time to meet their tax obligations.
| Month | Advance payment deadline | Notes |
|---|---|---|
| January | 20 February | Standard deadline |
| February | 20 March | Standard deadline |
| March | 20 April | Standard deadline |
| December | 20 January of the following year | Longer deadline |
Simplified income tax advances must be paid by the 20th of each month for the previous month. The advance for December is paid by 20 January of the following year
Missing the payment deadline for a simplified advance results in late-payment interest, calculated from the first day after the payment deadline. The interest rate is set under the Tax Ordinance Act and can considerably increase the business owner's tax costs.
Advantages of simplified advance payments
Simplified income tax advances offer a number of important benefits for business owners running a stable business. The main advantage is predictable tax charges, which make financial planning and budgeting easier.
With a fixed monthly advance, business owners can better forecast their cash flow and plan investments. They do not have to calculate the advance every month based on current income, which considerably simplifies bookkeeping and reduces the risk of errors.
Another important advantage is the time saved on tax calculations. Business owners using simplified advances do not have to analyse their income and costs every month to determine the advance. It is enough to pay the fixed amount set at the beginning of the year.
- Predictable monthly tax charges
- Simpler bookkeeping and settlements
- Time saved on tax calculations
- Better cash-flow planning
- Lower risk of calculation errors
Simplified advances are particularly beneficial for business owners running a stable business with regular income. They allow better financial planning and remove the need to calculate the advance every month
The system of simplified advances can also be convenient for settlements with the tax office, because fixed amounts are easier to check and record.
Disadvantages and limitations of simplified advance payments
Despite their many advantages, simplified income tax advances also have some disadvantages and limitations that business owners should consider before deciding to use them. The main limitation is the rigidity of the system, which does not take current changes in the taxpayer's income into account.
If a business owner earns considerably less in a given year than in the reference year, they still have to pay advances calculated on the basis of the higher income from the past. This may lead to an overpayment of tax, which will be refunded only after the annual tax return has been filed.
The opposite happens when a business owner earns considerably more in a given year than in the reference year. In that case the simplified advance may be too low, which means additional tax to pay in the annual settlement.
A business owner running a trading business showed income of PLN 60,000 in the return for 2024 and in 2026 paid simplified advances calculated on that basis. In 2026 his income rose to PLN 120,000, but he kept paying the low advances. In the annual settlement he had to pay a considerable amount of additional tax – without interest, provided he paid it by the deadline for filing the return.
The simplified advance does not reflect current changes in the taxpayer's income, which can lead to overpayments or underpayments of tax. The system is rigid and does not respond to changing business conditions
Another limitation is that simplified advances cannot be used by people starting a business or running an unstable business. The system requires an income history from previous years, which new business owners do not have.
Comparison with other ways of paying advances
The simplified advance is one of three ways in which business owners can pay income tax advances. Comparing it with the other options helps you choose the best way of settling your taxes.
Standard monthly advances are calculated on the basis of the taxpayer's current income and costs. This is the most flexible option because it reflects the business owner's actual financial situation in a given month. However, it requires regular calculations and can be time-consuming.
Quarterly advances are available to business owners whose revenue in the previous tax year did not exceed a certain amount. This option combines flexibility with less frequent settlements, but still requires regular calculations.
| Type of advance | Frequency | Flexibility | Calculations required |
|---|---|---|---|
| Standard monthly | Monthly | High | Every month |
| Quarterly | Quarterly | Medium | Every quarter |
| Simplified | Monthly | Low | Once a year |
The choice of how to pay advances depends on the nature of the business, the stability of income and the taxpayer's preferences in financial planning. Each option has its advantages and limitations
Simplified advances work best for business owners running a stable business with regular income who value predictability and simple settlements. Standard monthly advances suit businesses with fluctuating income, while quarterly advances are a compromise between flexibility and frequency of settlements.
How to switch to simplified advance payments
Switching to simplified income tax advances is simple and does not involve complicated formalities. Thanks to the changes introduced in 2019, taxpayers do not file any notice in advance, but they apply this method for the whole tax year, starting with the advance for the first month of the year.
The first step is to check whether the taxpayer meets the conditions for using simplified advances. You need to verify that the income comes from non-agricultural business activity and that taxable income was shown in the relevant reference years.
Next, calculate the monthly simplified advance on the basis of the income shown in the relevant tax return. The calculation should reflect the chosen form of taxation – the tax scale or the flat tax.
- Check the conditions for using simplified advances
- Determine the reference income from the relevant year
- Calculate the annual tax on the reference income
- Divide the annual amount by twelve months
- Start paying the fixed monthly amount
Switching to simplified advances does not require notifying the tax office in advance. The taxpayer pays simplified advances for the whole tax year and reports this in the annual tax return
Remember to mark correctly in the annual tax return that you used simplified advances. Missing this information may cause problems with the annual settlement and the need to provide explanations to the tax office.
