Amount free from deductions - what is it and how to calculate it?

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The amount free from deductions is a mechanism to protect the employee's salary from too large deductions from the salary. Read the article and learn more about it.

Amount free from deductions - how to calculate it?

The amount free from deductions is valid in the case of:

  • deductions of non-maintenance payments,

  • advances granted to the employee,

  • financial penalties imposed on the employee from the liability of order,

  • voluntary deductions.

The amount free from deductions is calculated on the basis of the minimum wage applicable in a given year (in 2019 it is PLN 2,250 gross). The amount of remuneration in the amount of:

  • the minimum remuneration for work due to full-time employees, after deduction of social security contributions and advance payments for personal income tax when deducting amounts enforced under enforcement titles to cover debts other than maintenance payments;

  • 75% of the above remuneration - with the deduction of cash advances granted to the employee;

  • 90% of the above remuneration - with the deduction of fines provided for in the Labor Code, art. 108.

In the case of voluntary deductions made on the basis of the employee's written consent, the amount free of deductions is the amount:

  • the minimum remuneration for work referred to above - when deducting amounts due to the employer,

  • 80% of this amount - with the deduction of other charges.

Deductions made for maintenance payments do not benefit from this protection due to the special purpose of these benefits. In the case of the enforcement of these receivables, only the upper limit of deductions fulfills the security function.

Amount free from deductions - statement from October 1, 2019

For a full-time employee working in the second and subsequent year, who does not pay contributions to the PPK, taking into account the differences resulting from the amount of tax deductible costs and the application of the tax-reducing amount, the amounts free of deductions are as follows:

Basic tax-deductible costs and tax-reducing amount

Basic tax-deductible costs and no tax-reducing amount

Increased tax deductible costs and tax reduction amount

Increased tax deductible costs and no tax-reducing amount

100% of the minimum wage after deduction of social security contributions and personal income tax advance payments

PLN 1 673.78

PLN 1,629.78

PLN 1681.78

PLN 1,637.78

90% of the minimum wage after deducting social security contributions and advance personal income tax

PLN 1,506.40

PLN 1 466.80

PLN 1,513.60

PLN 1,474.00

80% of the minimum wage after deducting social security contributions and withholding income tax from natural persons

PLN 1 339.02

PLN 1 303.82

PLN 1 345.42

PLN 1,310.22

75% of the minimum wage after deducting social security contributions and withholding income tax from natural persons

PLN 1 255.34

PLN 1 222.34

PLN 1,261.34

PLN 1 228.34

The amount is free of deductions and part-time work

It should be taken into account that the amounts listed in the table are proportionally reduced if the employee works part-time. The position of the Ministry of Labor and Social Policy of January 7, 2014 describes that in this situation, the minimum wage should first be calculated taking into account the working time of a part-time employee, and only in the next step the tax and contribution charges should be deducted.

Example 1.

The employee is employed on a half-time basis and receives a gross remuneration of PLN 1,200. On October 24, 2019, the employer received a letter from the bailiff regarding non-maintenance payments in the amount of PLN 2,000. The employee works outside the place of residence, so he is entitled to increased tax deductible costs (PLN 300). In addition, the employer takes into account the tax-free amount in the remuneration. What is the amount free of deductions for this employee?

  • social security contributions:

    • pension contribution: 1,200 x 9.76% = 117.12 PLN

    • disability pension: 1200 x 1.5% = 18 PLN

    • sickness contribution: PLN 1,200 x 2.45% = PLN 29.40

    • in total - PLN 164.52

  • health care contribution:

    • health insurance 9% to be collected: (PLN 1,200 - PLN 164.52) x 9% = PLN 93.19

    • health insurance contribution to be deducted from the tax: (PLN 1,200 - PLN 164.52) x 7.75% = PLN 80.25

    • health insurance premium reduced to the amount of the advance payment: 735 * 17% -43.76 = 81.19 PLN

  • advance on personal income tax:

    • basis for calculating the advance payment: PLN 1,200 - (PLN 300 + PLN 164.52) = PLN 735.48 ~ PLN 735

    • advance income tax: (PLN 735 x 17%) - PLN 43.76 = PLN 81.19

    • advance payment after deduction of health insurance: PLN 81.19 - PLN 80.25 = PLN 0.94 ~ PLN 1

  • net remuneration: PLN 1,200 - (PLN 164.52 + PLN 81.19 + PLN 1) = PLN 953.29

The minimum remuneration for work is PLN 2,250 gross in 2019. Per ½ time - PLN 1,125 gross. After deduction of social security contributions and income tax advance, the amount free from deductions is PLN 900.45. The employee's net salary is PLN 941.29.

PLN 953.29 - PLN 900.45 = PLN 52.84 - such a deduction can be made from the salary.

As of 2017, the provisions allowing to set the employee's remuneration in the first year of work in the amount of 80% of the minimum wage in a given year have ceased to apply.