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Higher pensions from July 1, 2022! PIT reduced to 12 percent. How much will retirees save?

Rising inflation is not optimistic, in particular when we look at the amount of pensions. However, recent changes to the regulations are intended to remedy this problem. As of July 1, PIT will be lowered to 12 percent. This, in turn, will translate into the amount of pensions received. How much will pensioners gain from it?

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Inflation, which has hit double-digit numbers, affects everyone’s lives. In practical terms, this means a serious increase in prices. It particularly affects retirees, who in many cases do not have too high benefits. For them, even valorization does not seem to help. Drugs, food and maintenance costs more. In response to this problem, it was decided to reduce the PIT tax on pensions from 17 to 12 percent.

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The assumption of the change in the interest rate of the pension tax is to ensure that the pensioners actually feel the cash in the cash register. In this way, they are to be compensated for the high inflation and rising costs of living. In practice, however, not everyone will benefit from this solution, especially not people with the lowest pensions.

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The reduction in PIT means that pensions above PLN 2,500 will be subject to a lower tax than before. Consequently, less money will be deducted from these pensions. However, this will not apply to people with pensions with pensions of up to PLN 2,500. This is due to the fact that they are not subject to income tax anyway, as the total annual income is tax-free (PLN 30,000). Such people actually receive PLN 2,275 on hand, because they pay the compulsory health insurance in the amount of 9%.

In practice, the changes introduced by the government from 1 July will benefit people with higher pensions. Not 17% but 12% of personal income tax will be deducted from each rate. Moreover, the act will not enter into force until July 1, i.e. only the second half of 2022 will be covered by the amendment. Theoretically. In practice, the change is to be calculated from January 1, 2022. This means that the advances overpaid by retirees will be returned to them as part of the PIT settlement.

The calculations are based on simplified data assuming a uniform amount of the old-age pension throughout the year and without taking into account any possible indexation and additional pensions.

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