Ryczałt and linear tax: services for a former or current employer

Not every sale to a former employer means losing eligibility for the chosen form of taxation. The restrictions discussed here require consideration of both whether the activities correspond to those performed in employment and the relevant years in which those employment activities were performed. Ryczałt, the tax on recorded revenue, and linear tax have different time windows and different consequences when the conditions are breached.

Below, we compare the rules described by Poland’s Ministry of Finance (MF) in its documents on ryczałt on recorded revenue and linear tax. This is a comparison of specific personal income tax (PIT) restrictions, not a complete assessment of an individual’s eligibility for either form of taxation.

Ryczałt: the preceding year and the tax year

According to MF — ryczałt, the restriction covers sales of trading goods or products and the provision of services to a former or current employer that correspond to activities which the taxpayer, or their business partner where the business is operated through a partnership:

• performed in the year preceding the tax year, or
• performs in the tax year

under an employment relationship or a cooperative employment relationship.

For the 2026 tax year, the comparison therefore covers employment activities in 2025 and 2026. The mere fact that the customer is a former employer does not replace the requirement that the activities correspond.

Sales or services meeting these conditions cause the loss of eligibility for ryczałt from the day revenue from those sales or services is earned. This wording should not be replaced with the date payment is received without separately establishing when the revenue arises.

Linear tax: employment activities in the tax year

According to MF — linear tax, a taxpayer using this form of taxation must not provide services to a former or current employer that correspond to activities the taxpayer performed or performs in the tax year under an employment relationship or a cooperative employment relationship.

In this description, the restriction concerns services, and the comparison covers the current tax year—not also the preceding year, as with ryczałt.

Providing such services causes the loss of eligibility for linear tax and an obligation to pay advance income tax payments calculated under the tax scale from the beginning of the year, together with late-payment interest on those advance payments. This is not the same consequence as the loss of ryczałt eligibility from the day revenue from the specified sales or services is earned, as stated by MF.

Actual activities, not just the job title

Both MF descriptions use the condition that the services or sales must “correspond to activities.” Consequently, merely changing a job title, the name of a service or the designation from “employee” to “consultant” does not demonstrate a change in the activities performed.

As optional preparation for an analysis, you can compare the specific tasks performed in employment with the specific tasks performed in the business. This is an organizational recommendation, not an additional obligation established by the cited documents.

Business partners: the limits of this comparison

The MF document on ryczałt expressly mentions activities performed by the taxpayer or their business partner where the business is operated through a partnership. The comparison should therefore not be limited to the taxpayer’s own employment history.

The cited description of the restriction in the MF document on linear tax refers to activities performed by the taxpayer and does not describe its coverage of business partners. We do not treat that omission as an exception for partnerships or as a basis for determining their position.

Three hypothetical examples

All the situations below are fictional. They illustrate only the employer-related conditions, timing and activities discussed here; they do not confirm any individual’s eligibility for either form of taxation. In particular, the MF document on ryczałt also lists other exclusions.

Example 1 — the same services, employment only in the preceding year

• Assumptions: a person operating a business individually performed programming for an employer under an employment relationship in 2025. The employment ended in 2025; in 2026, the person does not perform those activities under an employment relationship or a cooperative employment relationship. In 2026, the person provides the former employer with services corresponding to that programming and earns revenue from them.
• Ryczałt: the preceding year falls within the stated time window. On these assumptions, services corresponding to the employment activities cause the loss of ryczałt eligibility from the day revenue from those services is earned.
• Linear tax: performing those activities in employment only in 2025 does not meet the stated condition of performing them in the 2026 tax year. This is a conclusion about this one restriction, not confirmation that all conditions for linear tax are met.
• Source: MF — ryczałt and MF — linear tax.

Example 2 — the same activities in employment and business in one year

• Assumptions: a person operating a business individually performed programming for an employer under an employment relationship at the beginning of 2026. Later, also in 2026, the person provides the former employer with business services corresponding to those activities and earns revenue from them. The person changed the role’s name to “consultant,” but the actual activities remained the same.
• Ryczałt: the employment activities fall within the tax year. Services meeting the stated conditions cause the loss of ryczałt eligibility from the day revenue from those services is earned.
• Linear tax: the employment activities also fall within the required tax year. Providing services corresponding to those activities causes the loss of linear tax eligibility and an obligation to pay advance income tax payments under the tax scale from the beginning of the year, together with late-payment interest on those advance payments.
• Source: MF — ryczałt and MF — linear tax.

Example 3 — the same customer, genuinely different services

• Assumptions: a person operating a business individually performed only translation work for an employer under an employment relationship in 2025 and at the beginning of 2026. Later in 2026, the person provides product photography for the former employer. For this example, we expressly assume that the actual photography services do not correspond to any activities performed in that employment.
• Ryczałt: the employment years fall within the stated time window, but on the assumptions given, the condition that the activities correspond is not met. The customer’s status as a former employer alone is not sufficient for this restriction to apply.
• Linear tax: the employment includes the tax year, but on these assumptions, the condition that the services correspond to employment activities is likewise not met. This does not determine whether the other conditions for this form of taxation are met.
• Source: MF — ryczałt and MF — linear tax.

Scope: PIT, without determinations on ZUS or employment status

This article does not analyze ZUS conditions or employment-status tests. We draw no conclusions from this comparison about contributions, ZUS reliefs, the classification of a contract under labour law or an individual’s tax eligibility.

Treat the article Employment and a sole proprietorship solely as complementary context on combining employment with business activity, not as a source determining the PIT restrictions described here.