Effective 1 January 2018, Poland increased the personal tax allowance (credit) for lower incomes from PLN 1,188 to PLN 1,440, resulting in an exemption for individual income up to PLN 8,000. Under new rules introduced in 2017, the allowance is reduced as incomes increase. For 2018, the personal tax allowance applies as follows:

• For income up to PLN 8,000, an allowance of PLN 1,440 applies, resulting in a tax exemption (PLN 1,440 / 18% tax rate = PLN 8,000);
• For income over PLN 8,000 up to 13,000, the allowance is gradually reduced to PLN 556.02 (PLN 1,400 - 883.98 x (income - PLN 8,000) / 5,000);
• For income over PLN 13,000 up to 85,528, a fixed allowance of PLN 556.02 applies; and
• For income over PLN 85,528, the PLN 556.02 allowance is gradually reduced to 0 for income of PLN 127,000 or more (PLN 556.02 - 556.02 x (income - PLN 85,528) / PLN 41,472).

The tax amount payable is determined by applying the progressive rate and deducting the personal allowance amount. For 2018, the tax brackets and rates are unchanged: 18% on income up to PLN 85,528 and 32% on the excess.