PL: Self-employment/contractor earnings
The take-home amount calculator for B2B (Business to business, invoice based) contract. If you work (or going to work) as contractor in Poland, then this calculator helps you to calculate how much you will earn as self-employed.

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Information about your work and your company

Tax year and tax model
Year of work
Income tax model
Insurance contributions (polish ZUS)
Contribution payment on preferential principles (allowances and breaks in ZUS contribution payments eligible to those conducting business activities which fulfil certain criteria)
Small ZUS Plus - preferential ZUS for entrepreneurs achieving income below 120,000 PLN
Income achieved during previous yearPLN
Number of business days during previous yeardays
Voluntary sickness insurance
Working time
Number of working days within single month
Number of working days within year

Net incomes (without VAT)

Incomes categoryDailyMonthlyYearly
Regular incomes
Casual incomes

Net outgoings (without VAT)

Outgoings categoryDailyMonthlyYearly
Accountings
Phone
Billings (electric, heat etc)
Auto
Workers
Outgoing diets
Other outgoings

Results - what is going on with money seen on invoice

DailyMonthlyYearly
Net incomes (without VAT)250.005000.0060000.00
Net expenses (without VAT)0.000.000.00
Net profit250.005000.0060000.00
Advance payment towards income tax21.70434.005208.00
ZUS (insurance)71.571431.4817177.76
Net earnings ("take-home")156.733134.5237614.24

Your money month by month

MonthNet incomes (without VAT)Net expenses (without VAT)ZUS (insurance)Advance payment towards income taxNet earnings ("take-home")
Pension insuranceDisability insuranceVoluntary sickness insuranceAccident insuranceLabour Fund (FP)Health (NFZ)Total
January (1)5000.000.00612.19250.9076.8452.3776.84362.341431.48434.003134.52
February (2)5000.000.00612.19250.9076.8452.3776.84362.341431.48434.003134.52
March (3)5000.000.00612.19250.9076.8452.3776.84362.341431.48434.003134.52
April (4)5000.000.00612.19250.9076.8452.3776.84362.341431.48434.003134.52
May (5)5000.000.00612.19250.9076.8452.3776.84362.341431.48434.003134.52
June (6)5000.000.00612.19250.9076.8452.3776.84362.341431.48434.003134.52
July (7)5000.000.00612.19250.9076.8452.3776.84362.341431.48434.003134.52
August (8)5000.000.00612.19250.9076.8452.3776.84362.341431.48434.003134.52
September (9)5000.000.00612.19250.9076.8452.3776.84362.341431.48434.003134.52
October (10)5000.000.00612.19250.9076.8452.3776.84362.341431.48434.003134.52
November (11)5000.000.00612.19250.9076.8452.3776.84362.341431.48434.003134.52
December (12)5000.000.00612.19250.9076.8452.3776.84362.341431.48434.003134.52
Total (%)100.000.0012.245.021.541.051.547.2528.638.6862.69
Total60000.000.007346.283010.80922.08628.44922.084348.0817177.765208.0037614.24

Some facts

  • Company in in Poland is defined in several different ways depending on the context in which we speak about it.
    • According to the Act on Freedom of Economic Activity it is: "gainful manufacturing, construction, trade and service activities as well as the search, exploration and extraction of minerals from the fields, as well as professional activities, carried out in an organized and continuous manner".
    • According to the Law on personal income tax: "gainful activity (manufacturing, construction, trade, service or: consisting of the search, exploration and extraction of minerals from deposits; Intangible assets) carried out on its own behalf, irrespective of its expenses, in an organized and continuous manner from which the revenue obtained is not included in other income from the sources referred to in article 10."
    • According to the VAT Act: "economic activity covers all activities of producers, traders or service providers, including natural resource and farmer as well as freelance workers, also when the activity has been Performed once in circumstances indicating the intention to perform activities on a frequency basis. Business activities also include activities involving the use of goods or intangible assets continuously for profit."
  • When you register company in in Poland, you automatically become obligated to pay insurance contributions (polish ZUS). This obligation arises under the Social Insurance System Act of 13 October 1998.
  • Obligatory insurance contributions are:
    • health fund contribution,
    • retirement contribution,
    • disability insurance contribution,
    • accident insurance contribution,
    • labor fund contribution.
    • You can also pay (but you're not obligated to do it) voluntary sickness insurance contribution. Then you get access to benefits such as: sickness allowances, care allowances, rehabilitation benefit and maternity allowance.
    • Unfortunately, the amount of insurance contribution (polish ZUS) doesn't dependent on income. This means, that you need to pay about 1400 PLN (as of 2020) each month - doesn't matter if you earn money or not.
    • New entrepreneurs can pay lower insurance contributions (so called "small ZUS" in Poland) for the first 2 years after company was registered. In order to benefit from preferential ZUS contributions, the following conditions must be met:
      • 1. You did not register company in Poland in the last 5 years,
      • 2. If you're contractor for your former employer, you can't do the same work for him in current or previous tax year.
    • Setting up own company is common pratice for freelencers. In that case, their company is informally treated as an alternative form of employment (although in the legal sense there is no employee-employer relationship). Such form is often used by programmers, doctors or any other specialists. These people are often called contractors.
    • Replacing contract of employment employment by one-person bussiness can bring many benefits, but it's not always a best solution. Each decision depends on many factors like kind of activity, work expense and should always be analysed individually.
    • Common benefits of starting your own bussiness are:
      • you can take into account the costs incurred and reduce tax in this way. NOTE: This privilege does not apply if you use flat rate tax.
      • you can give VAT (incluing VAT EU) invoice to your contrahent, which make cooperation with foreign companies much easier,
      • you get more options to optimize you costs e.g. by choose tax model, which bests your case in the best way (linear tax, progressive tax, flat rate tax).
    • Own business have some disadvantages too:
      • you're not employee, so you have no any privileges related to contract of employment employment. All depends on contract beetwen your company and your contrahent. So, of course you can negotiate better conditions, but also you can negatiate worse. It's simply your business now.
      • you need to manage accountancy on your own. Also, you can hire accounting office to do it for you, but it's extra cost.
      • you're obligated to pay insurance contributions (polish ZUS) each month, no matter if you earn money or not.

      More about progressive tax:

      • Currently (as of 2020), taxpayers who settle on general rules are subject to the so-called tax thresholds. This means that the tax rate (percentage) depends on achieved incomes. Until September 2019, income below 85 528 PLN was taxed with 18% rate. Starting from October 2019 the rate for the first threshold was reduced to 17%. Income above this amount is taxed with 32% rate.
      • ⚠ WARNING! Because the tax rates changed during the tax year, the annual settlement for income earned during 2019 should use effective 17.75% tax rate:
        912×18%+312×17%=17.75%\frac{9}{12} \times 18\% + \frac{3}{12} \times 17\% = 17.75\%
      • The tax base (ie the amount from which the tax is calculated) is the sum of revenues obtained in a given year decreased by social insurance contributions (polish: ZUS) and costs of getting incomes.
        tax base = gross earnings - social insurance - cost of getting income
      • There is a tax-free amount in the Poland, from which we will not pay any tax. In this case, the final tax would be slightly lower than it would appear from the tax thresholds alone.
      • Before 2017 year the tax-free amount was fixed (in 2009-2016 it amounted to 3091.00 PLN) and was entitled to all taxpayers using general rules.
      • Starting from 2017, the tax-free amount depends on income, in such a way that the taxpayers with very small income are fully covered, then the tax-free amount is gradually reduced as revenue increases.
      • In practice, the so-called tax reduction amount is more common, when calculating income tax (PIT). This is the effective amount that should be deducted from the tax already calculated, to apply the allowance associated with the tax-free amount.
      • To calculate the tax for 2019 year, use the below formula:
        • in the case of income below 85 528 PLN:
          tax = 17.75% × tax base - tax reduction amount
        • in the case of an income of 85 528 PLN or more :
          tax = 15181.22 PLN + 32% × (tax base - 85528 zł) - tax reduction amount
      • To calculate the tax for 2020 year, use the below formula:
        • in the case of income below 85 528 PLN:
          tax = 17% × tax base - tax reduction amount
        • in the case of an income of 85 528 PLN or more :
          tax = 14539.76 PLN + 32% × (tax base - 85528 zł) - tax reduction amount
      • To calculate the tax reduction amount for income earned in 2019 or 2020 year, use the following formula:
        • in case of income in the amount of 8000 PLN or less:
          tax reduction amount = 1420 PLN,
        • in case of income from 8001 PLN to 13000 PLN:
          tax reduction amount = 1420 PLN - 871.70 PLN × (tax base - 8000 zł) / 5000 zł,
        • in case of income from 13001 PLN to 85528 PLN:
          tax reduction amount = 548.30 PLN,
        • in case of income from 85529 PLN to 127000 PLN:
          tax reduction amount = 548.30 PLN - 548.30 PLN × (tax base - 85528 zł) / 41472 zł,
        • in case of income above 127000 PLN there is no tax-free amount, so tax reduction amount is 0.
    • In addition, tax should be decreased by health insurance (polish: NFZ), but not more than 7,75% of the basis.
      ⚠ WARNING! Health insurance contributions (polish: NFZ) are deducted from already calculated tax, instead of tax base like in case of other expenses.
    • Starting from August 2019, people under 26 y.o. in Poland do not need to pay income tax (PIT).
      In 2019, the tax-relief covers annual revenues up to 35636.67 PLN, and from 2020, this limit will be increased to 85528 ​​PLN. Revenues exceeding the annual limit remain taxed using tax-scale.

What is the meaning of each calculator field ?

  • Year of work - select the year of the employment.
    Every year is slightly different. The employment taxation rules and rates in Poland are little bit changing from time to time. Most of the time the changes are just minor adjustments to rates (numbers, factors, percentages). When you select the year of the employment here, the calculator will use the rules and rates for particular year.
    This calculator supports all years from 2007 to 2020 including changes introduced in-the-middle of 2019 tax year and we will update it every year to follow changes of the labour law and tax rates in Poland.
  • Contribution payment on preferential principles - Tick it if you use so-called "small ZUS", which allow you to pay smaller insurance contributions (polish ZUS). Preferential principles can be applied for new companies during first 24 months of activity on market only.
  • Voluntary sickness insurance - Tick if you want to pay optionally sickness insurance contribution (part of polish ZUS). This contribution is not obligatory, but gives you extra benefits when you're sick.
  • Number of working days within single month - simply the number of days, when you work during single month. Most typical value is +/- 20 days (four weeks with five working days each).
  • Number of working days within year - the same as above (number of working days withing single month), but for whole tax year.
  • Income tax model - select your tax model, which you declared during company registration or using special form sent to the tax office later. Possible tax models are:
    • linear tax - a fixed 19% tax based on profit i.e. the amount you earned decreased by the costs you incurred. This model takes into account both incomes (e.g. sales of services) and costs (e.g. internet bills). The tax rate is constant regardless of the profit (incomes minus outgoings).
    • progressive tax - in this model, the tax rate depends on the generated profit i.e. if you earn more, then you pays higher tax rate and vice versa. For example taxthresholds in 2020 were are 17% (below 85528 PLN) and 32% (above 85528 PLN). Like linear tax, this model takes into account both incomes and outgoings. The difference between them is the profit used as tax base.
    • flat rate tax - this is the easiest way how the tax can be calculated. In this model, the tax depends only on the incomes (e.g. hairdresser can pay 8.5% tax per each haircutted client). The tax rate depends on the kind of goods or services being sold (industry). In the most cases, flat tax rates are much lower than in other models, but it's not allow to deduct costs (e.g. internet bill). In other words flat tax rate takes into account incomes only and ignores the outgoings.
  • Table: net incomes (without VAT) - enter incomes, which you generate during single working day, a month or a whole tax year.
  • Table: net outgoings (without VAT) - enter your outgoings (costs) during single working day, month or whole tax year. For example you can enter telephone or internet bills, employee salaries, travel expenses etc.

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