11 February 2026

Tax relief, part 5: relief for innovative employees

In the next article in our series on tax relief, we present information on the tax relief for innovative employees. The tax relief for innovative employees is a relatively new income tax measure. It was introduced as part of a package of changes known as the “Polish Deal” in 2022.

This is another incentive for innovative activity – the tax relief for innovative employees is a supplement for entities conducting research and development activities. The tax relief for innovative employees allows for more efficient use of eligible costs incurred as part of R&D activities – that is, the relief allows these costs to be used when the amount of income earned by the taxpayer in the tax year or a loss does not allow for the full use of the eligible costs pool.

How the relief for innovative employees works

If a taxpayer has a pool of eligible costs not deducted in their annual tax return, they can use it to pay personal income tax advances for employees engaged in R&D activities in the current period.

The relief involves selecting employees who qualify for the innovative employee relief and reducing their PIT advances. Consequently, advances are collected from these employees but not transferred to the tax office (the employer retains these advances within the company).

The amount by which the advances can be reduced is calculated as the product of the undeducted amount of eligible costs and the tax rate applied by the taxpayer (employer).

What are the conditions for applying the relief for innovative employees?

Firstly, the relief applies to innovative employees – understood as employees (individuals) who are directly engaged in research and development activities in a given month – for a period of time that accounts for at least 50% of the total working time of these employees.

Secondly, the tax relief applies to innovative employees – those employed under:

A service relationship, an employment relationship, homework, a cooperative employment relationship, a social security cash benefit, a contract of mandate, or a contract for specific work,

Whose advance payments were made on copyright.

Thirdly, the taxpayer (employer) must file an annual income tax return for the previous tax year.

Fourthly, the taxpayer did not take advantage of the cash refund for research and development tax relief, as referred to in Article 18da of the Corporate Income Tax Act.

Fifth, this does not apply to advance payments made under the terms provided for:

• payers who are sheltered workshops or professional activity establishments (referred to in Article 38c, Section 2, Items 1-2 of the Personal Income Tax Act),
• payers who have lost their sheltered workshop status (referred to in Article 38c, Section 2a of the Personal Income Tax Act),

Five years have not passed since the end of the year in which the payer lost their sheltered workshop status (referred to in Article 38c, Section 3c of the Personal Income Tax Act).

When can the innovative employee relief be applied?

Pursuant to Article 18db, Section 4 of the Personal Income Tax Act, the reduction under the innovative employee relief is available from the first month following the month in which the taxpayer filed their annual income tax return and is valid until the end of the tax year in which the taxpayer filed their return. The relief can be applied again after filing their annual tax return in the following year. Below is an example:

Example 1. The taxpayer’s tax year aligns with the calendar year, and the taxpayer filed the annual CIT-8 tax return for 2023 in March 2024. Eligibility for the relief is from April to December 2024.

Example 2. The taxpayer’s tax year is the same as the calendar year, and the taxpayer filed the annual CIT-8 tax return for 2024 in February 2024. Eligibility for the relief is from March to December 2025.

Working Time Ratio and Reduction Amount

One of the conditions for applying the relief is that the employee must have worked at least 50% of their total (standard) working time. The regulations do not specify whether the proportion calculated based on the working time worked for R&D purposes should also be applied to the amount of advance payments (reductions).

Therefore, regardless of whether an employee devoted 55%, 75%, or 95% of their standard working time to research and development activities in a given month, the taxpayer (employer) is entitled to reduce the entire income tax advance payment for an innovative employee. This issue has been repeatedly addressed in individual interpretations issued by the Director of the National Tax Information (KIS), who has also repeatedly confirmed that taxpayers are entitled to reduce the entire advance payment regardless of the established proportion.

Important: It is crucial that the employee actually exceeds the statutory threshold of 50% of their working time devoted to R&D activities.

As ARPI Accounting, we can prepare analyses of ongoing projects in terms of research and development activities and help in implementing the research and development tax relief and the tax relief for innovative employees – contact our experts.