PIT-0 for Young People Under 26 and Business Income in Poland in 2026

The PIT-0 relief for people under 26 — why it does NOT cover sole proprietorship (JDG) income. The 85 528 zł limit, conditions, and pitfalls for young entrepreneurs.

Under 26 and starting a sole proprietorship (JDG)? You've probably heard about "zero income tax (PIT)" and are wondering whether your business will benefit from it too. The short answer: no, revenue from a sole proprietorship is not covered by the PIT-0 relief. This is one of the most common misconceptions among young entrepreneurs.

In this article, we explain how the relief for young people works (Art. 21 ust. 1 pkt 148 of the PIT Act), what types of income it covers, why business income is excluded, and what this means in practice for a young entrepreneur taxed on the tax scale, at the flat rate, or under the lump-sum tax (ryczałt).

How the PIT-0 relief works (relief for young people)

The relief for young people is an exemption from income tax on revenue earned by individuals who have not yet reached 26 years of age. The exemption applies up to 85 528 zł per tax year (Art. 21 ust. 1 pkt 148 of the PIT Act).

The amount of 85 528 zł is a combined limit for four reliefs: for young people, for returning to Poland, for families 4+, and for working seniors. If you benefit from more than one, the total exempt income cannot exceed this amount.

The age condition must be met at the time the income is earned — the right to the relief applies through your 26th birthday inclusive.

What income is exempt

The exemption covers only income from specific sources listed directly in the provision:

employment contract (full-time), including service relationship, outwork, cooperative employment relationship,
mandate contract concluded with an entity conducting business activity (but not a contract for managing an enterprise or a management contract),
graduate internship (Act of 17 July 2009),
student apprenticeship (Art. 121a of the Educational Law),
maternity allowance.

The list is closed. If a source of income is not listed in the provision, the relief does not apply — regardless of the taxpayer's age.

Why a sole proprietorship is not covered by PIT-0

Revenue from non-agricultural business activity (JDG) is not listed in Art. 21 ust. 1 pkt 148 of the PIT Act. This means that:

business income taxed on the tax scale (12%/32%) is subject to taxation — the tax-free allowance of 30 000 zł applies, but the PIT-0 relief does not,
business income taxed at the flat rate (19%) is also fully taxable,
revenue under ryczałt is taxed at the rate applicable to the given activity — without the PIT-0 relief.

Business income also does not count toward the 85 528 zł limit. If you have both an employment contract and a sole proprietorship, the PIT-0 limit applies only to employment income.

Legal context

The PIT-0 relief was designed for people starting their professional careers on the labor market — hence the restriction to employment contracts, mandate contracts, internships, and apprenticeships. Entrepreneurs benefit from other support mechanisms: preferential social insurance (ZUS) ("Reduced ZUS Plus," "Relief for Start"), the 30 000 zł tax-free allowance on the tax scale, and investment reliefs (R&D, IP Box).

Scenarios for a young entrepreneur

Scenario 1: Only a sole proprietorship on the tax scale

You are 24 and run a sole proprietorship taxed on the scale (12%/32%). Your annual income is 60 000 zł.

Tax-free allowance: 30 000 zł — income up to 30 000 zł is not taxed,
Above 30 000 zł: 12% on the excess,
Tax base: 60 000 zł − 30 000 zł = 30 000 zł,
Tax: 30 000 zł × 12% = 3 600 zł.

The PIT-0 relief does not apply. The 30 000 zł tax-free allowance is the only preference.

Scenario 2: Employment + sole proprietorship on the tax scale

You are 25, employed full-time (70 000 zł per year) and run a sole proprietorship on the scale (income 40 000 zł).

Employment income up to 85 528 zł: exempt from PIT (relief for young people),
Sole proprietorship income: taxed on the scale (with the 30 000 zł tax-free allowance, but the allowance is consumed by employment income),
Joint settlement: employment and sole proprietorship income are combined on PIT-36. The 30 000 zł tax-free allowance applies once — to the combined income.

In practice: employment up to 85 528 zł is exempt, but the business pays tax from the first złoty above the used-up tax-free allowance.

Scenario 3: Only a sole proprietorship under ryczałt

You are 23 and run a sole proprietorship under ryczałt (8,5%). Your annual revenue is 100 000 zł.

Ryczałt: 100 000 zł × 8,5% = 8 500 zł tax,
PIT-0 relief: does not apply,
Ryczałt health contribution: 498,35 zł/month (at annual revenue up to 60 000 zł) or 830,58 zł/month (above 60 000 zł).

Common misconceptions

"But I'm under 26, so why am I paying tax"

The PIT-0 relief is limited to specific types of income. Age is a necessary but not sufficient condition — the source-of-income condition must also be met.

"Unregistered business activity isn't a sole proprietorship"

Revenue from unregistered business activity (below the quarterly limit of 10 813,50 zł in 2026) is also not covered by the PIT-0 relief, because it is not listed in Art. 21 ust. 1 pkt 148. Unregistered activity is subject to taxation on the tax scale (PIT-36, with the 30 000 zł tax-free allowance) — however, it does not require CEIDG registration or ZUS contributions as long as revenue stays below the limit.

"If not PIT-0, what discounts do I get"

Young entrepreneurs can use the following mechanisms:

Relief for Start — no social ZUS contributions for the first 6 months (the health contribution remains),
Reduced ZUS Plus — reduced social contributions for 2 years after the Relief for Start,
30 000 zł tax-free allowance — on the tax scale,
One-time depreciation — for brand-new fixed assets (annual limit of 100 000 zł). A comparison of taxation forms can help you choose between the scale, flat rate, and ryczałt.

Pitfalls

Assuming PIT-0 exempts sole proprietorship income from PIT — this is the most common mistake. The relief covers only employment, mandate contracts, internships, and apprenticeships.
Not accounting for the 85 528 zł combined limit — if you use PIT-0 and the relief for families 4+, the sum of exempt income cannot exceed 85 528 zł.
Skipping PIT advance payments in the first year — even if you are 22, a sole proprietorship on the tax scale requires paying PIT advances on income above the tax-free allowance.
Ignoring the health contribution — the PIT-0 relief does not exempt you from the health contribution on business activity. Under ryczałt you pay 498,35–1 495,04 zł/month, under the flat rate 4,9% of income, on the scale 9% of income.
Signing a management contract instead of an employment contract — management contracts and contracts for managing an enterprise are excluded from PIT-0 even for people under 26.

FAQ

Can I use PIT-0 from employment and run a sole proprietorship at the same time?

Yes. Employment income up to 85 528 zł is exempt, and sole proprietorship income is taxed normally. You report both sources in a single PIT-36 return.

Does the PIT-0 relief work under ryczałt?

No. Ryczałt is a separate form of taxation (Act on lump-sum income tax). The PIT-0 relief from the PIT Act does not apply to ryczałt.

Do I lose the relief on my 26th birthday, day by day?

Yes. The right to the relief applies through your 26th birthday inclusive. Income earned after that date is taxed under general rules.

Does unregistered business activity benefit from PIT-0?

No. Revenue from unregistered business activity is not listed in Art. 21 ust. 1 pkt 148 of the PIT Act. Unregistered activity is subject to taxation on the tax scale (PIT-36) — but does not require CEIDG registration or ZUS contributions below the revenue limit.

Are PIT-0 and the 30 000 zł tax-free allowance the same?

No. PIT-0 is an exemption for specific types of income (employment, mandate contracts) up to 85 528 zł. The 30 000 zł tax-free allowance is an element of the tax scale that reduces the tax base for all income sources on the scale, including sole proprietorship income.

Sources

Need help with your sole proprietorship taxes?

Oxyok handles full sole proprietorship accounting — from 49 zł + VAT per month. We'll help you choose the right form of taxation and optimize your tax burden.

Write to Paweł or see Oxyok's accounting services.

This material is for informational purposes. The choice of taxation form and application of reliefs depends on your individual situation.