Tax-free pensions in Poland 2026: rules, indexation, contributions

Tax-free pensions – the rules in place since 2022

A "tax-free pension" (emerytura bez podatku) is the colloquial name for an effect of the Polish Deal (Polski Ład) reform that took effect on 1 January 2022: the tax-free amount was raised to PLN 30,000 a year (tax-reducing amount of PLN 3,600, Article 27(1) of the PIT Act). There is no separate exemption of pensions from personal income tax – as at 8 November 2026 no act exempts pensions from PIT (personal income tax). The relief for working seniors (Article 21(1) point 154 of the PIT Act, up to PLN 85,528 a year) covers income from work earned by people who, despite being entitled to a pension, do not draw it – it does not cover the pension itself. A pensioner who runs a firm settles tax under different rules; the details are in our guide on tax settlement for pensioners running a business.

Because PLN 30,000 a year equals PLN 2,500 a month, a retirement or disability pension of up to PLN 2,500 gross a month – if there is no other income – does not give rise to income tax, and on a higher benefit the tax is in practice 12% of the excess over PLN 2,500. This translates directly into a higher net benefit.

An important feature of this solution is that it works automatically. Pensioners do not have to file any applications – the pension authority reduces the tax advance by 1/12 of the tax-reducing amount with every payment, unless the pensioner applies to stop this reduction (for example, when the employer already applies the tax-reducing amount).

For pensioners receiving benefits above PLN 2,500 a month, income tax in practice affects only the excess over this threshold. However, the tax-free amount is available once a year, regardless of the number of income sources – if a pensioner also has other income taxed on the tax scale (12% and 32%), for example from work, a total of PLN 30,000 a year remains tax-free. How the allowance works for someone in regular employment is shown in our post on the employee tax-free amount and net salary.

Filing a tax return with a tax-free pension

Seniors' tax obligations are simple whatever the amount of the benefit. The pension authority prepares an annual tax calculation, PIT-40A (Article 34(7) of the PIT Act), and a pensioner who had no income or deductions other than the benefit from ZUS does not have to file a tax return – not only with a pension of up to PLN 2,500 a month, but at any benefit level. Where ZUS does not prepare a PIT-40A, it issues a PIT-11A information slip (Article 34(8)), and the taxpayer then files the return themselves.

How pensioners file a tax return

1. Check whether you must file - with only a pension settled by ZUS in a PIT-40A, no return is required
2. Assess the benefits of joint filing - review the family situation and the spouse's income
3. Choose how to file - online, in person or by post
4. Prepare the documents - the PIT-40A or PIT-11A from ZUS
5. File by 30 April - meet the statutory deadline

Even without an obligation to file, pensioners keep the right to submit a tax return. This can be particularly beneficial in certain personal and family situations. The decision to file remains entirely voluntary and depends on the pensioner's individual circumstances.

The most common situation in which filing a return may pay off for a pensioner is joint filing with a spouse. If the pensioner's spouse earns taxable income above the tax-free amount, a joint tax return can significantly reduce the tax due for the whole family.

Joint filing by spouses works by splitting income, which may move part of the spouse's income into a lower tax bracket. Where one spouse has a tax-free pension and the other earns higher taxable income, joint filing can bring tangible financial benefits.

The filing procedure for pensioners is the same as the standard rules. You can file online through the e-Tax Office (e-Urząd Skarbowy, Twój e-PIT service), in person at the tax office (urząd skarbowy) or by post. The deadline remains unchanged: 30 April of the year following the tax year.

Health insurance contribution on a tax-free pension

One of the most important points to understand about tax-free pensions is the health insurance contribution. Even when no income tax is withheld from a pension, all retirement and disability pensioners still have to pay the health insurance contribution. This rule did not change with the new tax regulations.

The health insurance contribution on a pension is 9% and is withheld by the Social Insurance Institution directly from the gross amount of the benefit. Pensioners pay this contribution in full, which means it is deducted from every pension payment – except for the very low benefits described below.

Main charges on a pension in 2026:

• Health insurance contribution - 9% of the gross amount (all pensioners)
• Income tax - a 12% advance reduced by PLN 300 a month, i.e. in practice 12% of the amount above PLN 2,500 gross. If the pensioner also runs a business, we can handle its taxes as part of our accounting services.
• No deduction of the health insurance contribution from tax

An important change introduced with the Polish Deal is the treatment of the health insurance contribution for income tax purposes. Until the end of 2021, pensioners could deduct almost the whole health insurance contribution from income tax, which significantly reduced their tax burden. When the new rules took effect in 2022, pensioners and other taxpayers lost this option.

Example of the impact of the changes on a pension:

Mr Jan receives a pension of PLN 2,200 gross. Before 2022 he paid a health insurance contribution of PLN 198, but could deduct about PLN 170 from tax. His real contribution burden was about PLN 28, and the tax advance after this deduction was about PLN 160 (17% minus the PLN 43.76 tax-reducing amount and minus PLN 170 of the contribution). After the changes he pays the full PLN 198 health insurance contribution, but no income tax. Net effect: he gains about PLN 160 a month (comparison at the same gross amount).

The compensation for losing the deduction of the health insurance contribution was raising the tax-free amount to PLN 30,000 a year – from PLN 8,000 for the lowest incomes, and for incomes from PLN 13,000 to PLN 85,528 a year from about PLN 3,089 (tax-reducing amount of PLN 525.12). This change was meant to offset the negative effects of losing the health contribution deduction, but in practice not all pensioners benefited equally.

The pensioners who gained the most were those whose annual pension is closest to the tax-free amount, i.e. PLN 30,000. Pensioners with lower benefits paid less tax before, so the higher tax-free amount brought them smaller financial benefits.

The rules for paying the health insurance contribution on a pension remain unchanged. ZUS withholds the contribution automatically with each benefit payment, and the pensioner does not have to take any action. The system is fully automated and requires no intervention from the pensioner.

Gross and net pension in 2026

Tax-free pensions have significantly changed the relationship between the gross and net amounts of pension benefits. Understanding this relationship is key to planning a household budget and assessing pensioners' real income. In 2026 the net benefit results from three figures: the 9% health insurance contribution, the 12% tax advance and the monthly reduction of PLN 300 (the advance is rounded to whole zloty).

For a pension of PLN 1,588 gross the net amount is PLN 1,445. The difference comes only from the health insurance contribution, because the benefit does not exceed the PLN 2,500 threshold and is completely free of income tax. The same applies to a pension of PLN 1,750 gross, which comes to PLN 1,593 net after the health insurance contribution.

With a pension of PLN 1,952 gross the pensioner receives PLN 1,776 net. For a pension of PLN 2,296 gross the net amount is PLN 2,089. These examples show how the health insurance contribution affects the final benefit when the pension does not exceed the tax-free threshold.

The situation changes for benefits above PLN 2,500 gross. A pension of PLN 2,870 gross gives PLN 2,568 net, which means that, besides the health insurance contribution, income tax is also withheld on the PLN 370 above the threshold. For a pension of PLN 3,444 gross the net amount is PLN 3,021.

With even higher benefits, the gap between gross and net becomes more significant. A pension of PLN 4,018 gross means PLN 3,474 net, and a pension of PLN 4,592 gross gives PLN 3,928 net. In the highest example – a pension of PLN 5,740 gross – the net amount is PLN 4,834.

These calculations show that tax-free pensions do bring tangible financial benefits, especially for pensioners with low and medium incomes. The gap between gross and net is smallest for pensions not exceeding PLN 2,500, where the only charge is the health insurance contribution.

Pension indexation in 2026

Pension indexation (waloryzacja) is an annual mechanism that adjusts benefits to changing economic conditions. On 1 March 2026 retirement and disability pensions were indexed again, by 5.3% (index of 105.3%, announcement of the Minister of Family, Labour and Social Policy of 11 February 2026, M.P. 2026 item 202). This is slightly less than in 2025, when indexation was 5.5%.

Pension indexation step by step:

1. Calculating the indexation rate - based on inflation and at least 20% of real wage growth (Article 89(1) of the Act on pensions from the Social Insurance Fund, FUS)
2. Setting the new minimum pension - the basis for other benefits
3. Recalculating all benefits - automatically in the ZUS system
4. Updated payments from 1 March - new amounts in March benefits
5. Informing pensioners - about the new pension amounts

In 2026 indexation was purely percentage-based – without a guaranteed minimum increase, which the legislator introduced in some earlier years. The pension indexation rate in 2026 was 105.3%, which means benefits rose by 5.3% compared with the amounts in force before 1 March.

Indexation directly affects benefits in the context of tax-free pensions. The increased amounts follow the same rules – pensions of up to PLN 2,500 a month remain free of income tax, and for higher benefits tax is withheld only on the amount above this threshold.

Example of the impact of indexation:

Ms Maria received a pension of PLN 2,300 gross before indexation. After indexation by 5.3% her benefit rose to PLN 2,421.90 gross. She still pays no income tax, because the amount does not exceed PLN 2,500. Her net gain after the health insurance contribution is about PLN 111 a month.

Indexation is automatic and requires no action from pensioners. The Social Insurance Institution recalculates all benefits using the applicable rate and starts paying the new amounts from March each year.

Indexation also affects other pension-related benefits. The minimum pension, which is the basis for the thirteenth pension, is also indexed. From 1 March 2026 the minimum pension is PLN 1,978.49 gross (an increase of PLN 99.58 – announcement of the President of ZUS of 17 February 2026), and this amount serves as the reference point for the additional benefits.

Thirteenth pension in 2026

The thirteenth pension is an additional benefit paid to retirement and disability pensioners, irrespective of the tax-free pension rules. In 2026 the thirteenth pension was paid in April – together with the benefit due for that month (Article 6(2) of the Act on the additional annual cash benefit for pensioners, Dz.U. (Journal of Laws) 2024 item 891). The amount of this additional benefit equals the minimum pension in force from 1 March of the given year (Article 5 of that Act).

After indexation in 2026 the thirteenth pension is PLN 1,978.49 gross. This amount equals the minimum pension after indexation and is paid to all eligible pensioners regardless of the amount of their basic benefit. The thirteenth pension is paid in full, without reductions or limits linked to the amount of the basic pension.

Key facts about the thirteenth pension:

• Amount in 2026: PLN 1,978.49 gross
• Payment date: April 2026
• Eligible: people who on 31 March were entitled to a retirement or disability pension (including from ZUS, KRUS (Agricultural Social Insurance Fund) and the uniformed services system) or a social pension
• Taxation: subject to income tax and the health insurance contribution
• Automatic payment: no application needed

An important aspect of the thirteenth pension is its taxation. In 2026 the thirteenth pension is not exempt from income tax – for PIT purposes it is treated as a retirement or disability pension (Article 12(1) of the Act on the additional annual cash benefit). In most cases the two benefits together exceed PLN 2,500 gross in that month, which means both income tax and the health insurance contribution are withheld.

The taxation of the thirteenth pension works as follows: if the basic pension and the thirteenth pension together exceed PLN 2,500 gross in April, income tax is withheld on the excess over this amount. In addition, a 9% health insurance contribution is withheld from the whole thirteenth pension.

Example of taxation of the thirteenth pension:

Ms Anna receives a basic pension of PLN 1,400 gross. In April 2026 she also received the thirteenth pension of PLN 1,978.49 gross. In total she received PLN 3,378.49 gross in April. Because the amount exceeds PLN 2,500, income tax (PLN 105) was withheld on the excess of PLN 878.49, together with the health insurance contribution on the whole amount (PLN 304). Her net benefit in April was about PLN 2,969.

The practical example shows how this mechanism works. A pensioner with a basic pension of PLN 1,400 gross also received, in April 2026, the thirteenth pension of PLN 1,978.49 gross. In total she received PLN 3,378.49 in April, which exceeds the tax-free PLN 2,500. Therefore, in addition to the 9% health insurance contribution, ZUS withheld an income tax advance on the amount above the threshold.

Concurrent benefits and tax-free pensions

Concurrent benefits (zbieg świadczeń) means that one person receives two or more different benefits from the social insurance system at the same time. In the context of tax-free pensions this matters, because it affects how income tax is calculated and how the tax relief is applied.

People who receive several benefits at the same time, for example a retirement pension and a disability pension due to an occupational disease, will pay no income tax provided that the total of all benefits does not exceed PLN 2,500 gross a month. If this threshold is exceeded, income tax is withheld only on the amount above PLN 2,500.

The most common cases of concurrent benefits:

• Retirement pension + disability pension due to an occupational disease
• Survivor's pension + military or police disability pension
• Retirement pension + survivor's pension
• Different types of disability pensions received at the same time
• ZUS retirement pension + uniformed services pension

The practical example shows how this mechanism works. A pensioner receiving a retirement pension of PLN 1,550 gross and 50% of a disability pension due to an occupational disease of PLN 720 gross has total benefits of PLN 2,270 gross. Because the total does not exceed PLN 2,500, all the benefits are free of income tax.

Example of concurrent benefits without tax:

Mr Kowalski receives a retirement pension of PLN 1,550 gross and 50% of a disability pension due to an occupational disease of PLN 720 gross. In total he receives PLN 2,270 gross a month. Because the amount does not exceed PLN 2,500, he pays no income tax. His only charge is the health insurance contribution of PLN 204 (9% of the total amount). His net benefit is PLN 2,066.

Another example concerns total benefits above the threshold. A pensioner receiving a retirement pension of PLN 1,800 gross and 50% of a disability pension due to an occupational disease of PLN 800 gross has total benefits of PLN 2,600 gross. In this case the benefits up to PLN 2,500 are tax-free, while income tax is withheld on PLN 100.

As a rule, where a person is entitled to several benefits from ZUS, only one is paid – the higher one or the one chosen (Article 95(1) of the Act on pensions from the FUS). Exceptions include a survivor's pension received together with one's own benefit (Article 95a), a disability pension from accident insurance and some uniformed services pensions (Article 95(2)). In all cases the same rule applies – the tax-free amount corresponding to PLN 2,500 a month covers the total of all benefits.

Concurrent benefits can also come from different systems. For example, a ZUS retirement pension may in some cases be received together with a uniformed services pension. The tax rules remain the same – a total of PLN 30,000 a year is tax-free, i.e. on average PLN 2,500 of benefits a month. If each payer reduces the advances by PLN 300, the difference is paid in the annual tax return – you can avoid this by asking one of them to stop applying the reduction.

Assessing the benefits of the changes

Tax-free pensions have met with mixed reactions among pensioners. Although at first glance the changes seem favourable to seniors, a detailed analysis shows that the real benefits are not as significant as initially announced. The main problem is the loss of the deduction of the health insurance contribution from income tax, which partly cancels out the benefits of the higher tax-free amount.

Until the end of 2021, pensioners could deduct almost the whole health insurance contribution from income tax, which significantly reduced their tax burden. When the Polish Deal took effect in 2022, this option was lost, and in return the tax-free amount was raised to PLN 30,000 a year (previously PLN 8,000 only for the lowest incomes, and about PLN 3,089 for incomes from PLN 13,000 to PLN 85,528).

Comparison of pensioners' situation before and after the changes:

The pensioners who gained the most were those whose annual pension is closest to the new tax-free amount, i.e. PLN 30,000. For this group, the removal of income tax brought tangible financial benefits that outweigh the loss of the health contribution deduction.

Pensioners with lower benefits, who previously paid small amounts of income tax, gained less from the higher tax-free amount. For this group, the loss of the health contribution deduction may mean that the real financial benefits are minimal or in some cases even negative.

In practice:

Lower taxation does not protect the real value of benefits – that is the role of annual indexation. The benefits of the higher tax-free amount are unevenly distributed: pensioners with the lowest benefits gain the least, and those with incomes close to PLN 2,500 a month gain the most.

Another factor in assessing the changes is inflation and the rising cost of living. Even if pensioners feel some increase in their disposable income because of the changes, part of this gain is absorbed by rising prices of goods and services.

The long-term outlook also raises concerns. Rising prices may mean that the benefits of tax-free pensions prove insufficient to maintain pensioners' standard of living. The lack of a mechanism automatically adjusting the tax-free threshold to inflation may mean that over time more and more pensioners exceed PLN 2,500 and start paying income tax again.

Practical aspects of how the system works

Tax-free pensions required significant changes in the IT systems of the Social Insurance Institution and the tax offices. Because the tax relief is applied automatically, pensioners do not have to take any additional action to benefit from it. The system is designed so that the relief is applied automatically with every benefit payment.

ZUS is responsible for correctly calculating and withholding the health insurance contribution and any income tax on benefits above PLN 2,500 gross. The pension authority automatically applies the relevant rates and thresholds, which reduces the risk of errors on the pensioners' side. This automation is particularly important for older people who may find it difficult to settle their taxes on their own.

How the tax relief is applied automatically:

1. Monitoring benefit amounts - the ZUS system tracks each pensioner's pension amounts
2. Automatic application of the threshold - the advance is reduced by PLN 300 (1/12 of the tax-reducing amount) without an application from the pensioner
3. Withholding the health insurance contribution - automatic deduction of 9% of the gross amount
4. Calculating tax on the excess - automatic for benefits above PLN 2,500
5. Producing documents - the annual PIT-40A tax calculation or the PIT-11A information slip

ZUS calculates the tax advance with every benefit payment. If a pension rises through indexation or other changes and exceeds PLN 2,500 gross, the system automatically starts withholding income tax on the excess. Likewise, if the benefit falls below the threshold, tax is no longer withheld.

Particular attention should be paid to documentation and settlement. After the end of the year, pensioners receive from ZUS the annual PIT-40A tax calculation or the PIT-11A information slip, showing the income, advances withheld and the health insurance contribution. These documents are essential if you decide to file a voluntary tax return or file jointly with your spouse.

The pension authority also sends the PIT-40A or PIT-11A to the tax office (Article 34(7) and (8) of the PIT Act), so the office knows the amounts of benefits and advances withheld. Errors in the benefit or the advance are corrected by ZUS – on its own initiative or at the pensioner's request.

Many older people find these rules hard to understand. ZUS publishes information on the taxation of benefits on its website and provides it at its branches.

Frequently asked questions