Lump-sum, flat tax or tax scale — which to choose for your Polish JDG in 2026

Choosing your tax form is a decision that can cost (or save) you thousands of zlotys per year. Most entrepreneurs make it based on a forum post or what "a friend's accountant said."

This guide compares all three tax forms available for JDG (sole proprietorships) in Poland in 2026 — with real numbers, not generalities.

Use the calculator below to instantly see which form is cheapest for you.

Three tax forms for JDG

Every sole proprietorship in Poland must choose one of three income tax forms:

1. Tax scale (general rules) — 12% and 32%

Tax calculated on income (revenue minus costs). Two brackets:

• First bracket: 12% on income up to 120,000 PLN per year
• Second bracket: 32% on income above 120,000 PLN per year
• Tax-free allowance: 30,000 PLN (reduces tax by 3,600 PLN)
• Tax reduction amount: 3,600 PLN per year

Best for: people with low income, those who benefit from joint settlement with spouse.

2. Flat tax — 19%

Flat 19% rate on income (revenue minus costs), no brackets, no tax-free allowance.

• Rate: 19% on all income
• No tax-free allowance
• No joint settlement with spouse
• Health contribution deduction limit: 14,100 PLN per year

Best for: entrepreneurs with high costs and income above 120,000 PLN where the tax scale would hit the 32% bracket.

3. Lump sum (ryczałt) — 2% to 17%

Tax calculated on revenue (without deducting costs). Rate depends on business type (PKD/PKWiU):

• 2% — Trade, production of own goods (some)
• 3% — Gastronomy
• 5.5% — Construction, transport services
• 8.5% — Most services (IT, consulting, some care services)
• 12% — Financial and insurance services
• 14% — Veterinary services, some medical services
• 15% — Some services (e.g. eldercare PKWiU 88.10.1 per KIS interpretation)
• 17% — Unlisted services (catch-all rate)

Best for: entrepreneurs with low costs relative to revenue (IT, consulting, services).

⚠️ Important: The lump-sum rate depends on PKWiU classification, not PKD. The same PKD can cover services with different lump-sum rates. Verify your exact PKWiU classification.

Health contribution — the biggest difference

Since the Polish Deal (2022), each tax form has a different health contribution. This is often the deciding factor, not the income tax itself.

Tax scale

Health contribution is 9% of income. No upper limit. Minimum monthly contribution is 432.54 PLN.

Flat tax

Health contribution is 4.9% of income. Annual deduction limit is 14,100 PLN (max monthly ~1,175 PLN).

Lump sum

Health contribution depends on annual revenue thresholds:

• Up to 60,000 PLN: 461.66 PLN/month (fixed)
• 60,000 – 300,000 PLN: 699.11 PLN/month
• Above 300,000 PLN: 1,258.39 PLN/month

This makes lump sum attractive for high-revenue, low-cost businesses — the health contribution is cheap compared to the scale and flat tax.

Comparison with concrete examples

Let's look at three scenarios. Each assumes full social ZUS (1,926.76 PLN/month), i.e. an entrepreneur 2.5+ years into running the business.

Scenario A: IT developer, 180,000 PLN revenue, 20,000 PLN costs

Tax scale: income 160,000 PLN → tax 28,400 + health 12,348 = 40,748 PLN Flat tax: income 160,000 PLN → tax 30,400 + health 7,056 = 37,456 PLN Lump sum 8.5%: revenue 180,000 PLN → tax 15,300 + health 5,540 = 20,840 PLN

Lump sum wins decisively. The IT developer has low costs relative to revenue, so paying tax on full revenue at a low rate is cheaper.

Scenario B: Construction services, 120,000 PLN revenue, 70,000 PLN costs

Tax scale: income 50,000 PLN → tax 2,400 + health 3,456 = 5,856 PLN Flat tax: income 50,000 PLN → tax 9,500 + health 2,352 = 11,852 PLN Lump sum 5.5%: revenue 120,000 PLN → tax 6,600 + health 8,389 = 14,989 PLN

Here the tax scale wins — high costs reduce income, and 9% health on low income is cheaper than the lump-sum health on high revenue.

Scenario C: Consulting, 300,000 PLN revenue, 40,000 PLN costs

Tax scale: income 260,000 PLN → tax 64,400 + health 20,520 = 84,920 PLN Flat tax: income 260,000 PLN → tax 49,400 + health 7,056 = 56,456 PLN Lump sum 8.5%: revenue 300,000 PLN → tax 25,500 + health 15,100 = 40,600 PLN

At high revenue with low costs, lump sum saves 40,000+ PLN per year vs the scale.

How to change your tax form

You can change your tax form only by the 20th day of the month following the month in which you first earned revenue in the tax year.

In practice:

• For scale/flat tax: choose for 2027 by January 20, 2027
• For lump sum: resign from lump sum by January 20 of the tax year
• For new businesses: choose in CEIDG at registration, or within the deadline above

Pitfalls that cost money

1. Wrong lump-sum rate for "services"

The standard rate for services is 8.5%. But not always — KIS interpretations show some PKWiU classifications get higher rates. Example: eldercare services (PKWiU 88.10.1) were assigned 17% by KIS, not 8.5% as many assumed.

2. The illusion of low lump-sum tax

Lump sum looks cheap because the rate is low (8.5%). But you don't deduct costs. If you have high costs (car, equipment, materials, subcontractors), lump sum can be more expensive than the scale — despite the lower rate.

3. Health contribution on flat tax

On flat tax, health contribution is 4.9% of income but is not deductible from tax. At high income the 14,100 PLN/year limit helps, but at medium income with high costs, the scale may be cheaper.

4. No tax-free allowance on flat tax and lump sum

The 30,000 PLN tax-free allowance and 3,600 PLN tax reduction apply only on the scale. If you earn below 30,000 PLN income, the scale means zero tax. On flat tax you pay 19% from the first zloty.

5. No loss carry-forward on lump sum

On scale and flat tax, you can deduct losses from previous years. On lump sum, you cannot — losses disappear.

Rules of thumb

Lump sum is best when:

• Your costs are low relative to revenue (below ~30%)
• Your lump-sum rate is 8.5% or less
• You don't use the tax-free allowance or joint settlement
• You don't generate losses

Tax scale is best when:

• Your costs are high (above ~50% of revenue)
• Your income is below 120,000 PLN (avoiding the second bracket)
• You benefit from the tax-free allowance (up to 30,000 PLN)
• You use tax reliefs (children, internet, thermomodernization)
• You want joint settlement with spouse

Flat tax is best when:

• Your costs are low but income is high (above 120,000 PLN)
• You want to avoid the 32% second bracket
• The 14,100 PLN health contribution limit matters to you

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Calculator: lump sum vs flat tax vs tax scale

Enter your annual revenue and costs to see which tax form results in the lowest total cost (tax + health contribution).