Planned changes to taxation under the progressive tax scale from 2027 – a third tax band, a higher second band and an increase in the solidarity levy (Part 1/3)

September 16, 2026

On 19 August 2026, Prime Minister Donald Tusk and the Minister of Finance and Economy, Andrzej Domański, announced the most significant package of changes to the Polish income tax system since the Polish Deal. The draft bill was submitted to the Government Legislation Centre on 21 August 2026. The new regulations are planned to enter into force on 1 January 2027.

Current situation – why does the PIT tax scale require reform?

The PIT tax scale in force since 2022 consists of two bands: 12% for annual income up to PLN 120,000 and 32% on the excess above that amount. As stated in the explanatory memorandum to the draft bill, such a large gap between the rates results in a sudden increase in the tax burden when the first threshold is exceeded, amounting to as much as 20 percentage points. In practice, a taxpayer whose annual income exceeds PLN 120,000 immediately pays 32% on every additional zloty earned, which drastically reduces their disposable income. This phenomenon is sometimes referred to as the “tax cliff effect”.

The tax-free allowance remains at PLN 30,000 and is not affected by the changes. The reform therefore does not concern taxpayers with annual income below PLN 120,000. For this group, representing more than 86% of all taxpayers taxed under the scale, nothing will change.

Proposed changes – three tax bands instead of two

According to the draft bill, from 1 January 2027 the PIT tax scale will consist of three bands:

• income up to PLN 130,000 per year: 12% rate (unchanged, but the threshold increased from PLN 120,000 to PLN 130,000);
• income above PLN 130,000 up to PLN 150,000: new 24% rate;
• income above PLN 150,000 per year: 32% rate (unchanged, but the threshold increased from PLN 120,000 to PLN 150,000).

The introduction of a new 24% rate for income between PLN 130,000 and PLN 150,000 is intended to mitigate the tax cliff effect. A taxpayer exceeding PLN 130,000 is no longer immediately taxed at 32%, but instead experiences a gradual increase in taxation. Only after exceeding PLN 150,000 does the rate rise to 32%.

Who will benefit and by how much?

The reform will benefit taxpayers taxed under the progressive scale with income above PLN 120,000, namely those who have so far paid 32% on every zloty above PLN 120,000. The Ministry of Finance estimates that approximately 3.5 million taxpayers will benefit from the changes. The maximum annual tax saving for a single taxpayer may amount to PLN 3,600.

The reform will not provide any benefit to persons taxed under the flat-rate income tax regime (19%), lump-sum taxation on recorded revenue, or those conducting special agricultural production activities. The progressive tax scale applies only to those who have chosen taxation according to the progressive tax scale, including employees under employment contracts, management board members remunerated on the basis of appointment, and some entrepreneurs.

It is worth noting that the Ministry of Finance indicates that, according to its simulations, the proportion of individuals paying the 32% rate should decrease by almost half after the reform, from approximately 14% to approximately 7.2% of taxpayers taxed under the progressive scale.

The solidarity levy will increase from 4% to 5%

Alongside the restructuring of the tax scale, the draft provides for an increase in the solidarity levy, an additional tax paid by individuals with annual income exceeding PLN 1 million. Pursuant to Article 30h of the PIT Act, the levy is calculated on the excess income above PLN 1,000,000. Under the planned changes, the levy rate will increase from 4% to 5%, applying to income reported in PIT returns submitted from 1 May 2027 onwards.

The change affects a relatively small group of taxpayers. The Ministry of Finance estimates that approximately 39,000 individuals are currently subject to the solidarity levy. The levy is settled through a separate DSF-1 declaration submitted by 30 April of the following year.

Status of the draft and what comes next?

The draft bill published on 21 August 2026 on the website of the Government Legislation Centre is currently undergoing public consultation and review. According to the timetable, the Council of Ministers should adopt the draft in the third quarter of 2026 and submit it to the Sejm. The regulations are scheduled to enter into force on 1 January 2027, which means that legislative work will proceed very quickly.

It is worth monitoring the legislative process. Naturally, the draft may be amended during the parliamentary stage, especially considering that a competing proposal is simultaneously being processed in the Sejm, providing for a simpler solution: increasing the second tax threshold from PLN 120,000 to PLN 180,000 without introducing an additional rate.

Taxpayers will begin paying advances under the new tax scale as early as January 2027. Employers will be required to adapt payroll systems to the new thresholds and rates. For employees whose annual gross remuneration exceeds approximately PLN 145,000 to PLN 170,000 (depending on contributions and other deductions), the change may translate into a real increase in net pay from the very first salary payment in 2027.

Tags income tax, PIT, podatek dochodowy, skala podatkowa, tax reform