Business activity, employment contract and PIT advance payment


In a situation where an entrepreneur running a business is also employed under a contract of employment, the question arises about the correct settlement of advances for personal income tax, and in particular about taking into account the amount reducing the tax.

Because both the scheme for calculating the income tax advance (with general rules) for the conducted activity takes into account the reduction of taxable income by the amount that reduces the tax (PLN 556.02) and the scheme for calculating the tax for an employee includes 1/12 of the tax-reducing amount each month ( 46.33 PLN), there is a problem whether the taxpayer can use these amounts both on the basis of an employment contract and business activity?

The answer is it shouldn't. The amount reducing the tax is due as the total annual amount to be deducted. The taxpayer should therefore deduct it from one title, but it should be remembered that in this case the priority is the activity, not the full-time job.