Taxation with a tax card and employment of employees under a civil law contract


The tax deduction card is the simplest form of taxation. Taxpayers using it have many privileges and facilities, as well as limitations. For example, they do not have to keep tax books or submit an annual income statement, which is a definite plus. However, on the other hand, taxation with a tax card entails restrictions on the employment of employees. What? We answer below.

Taxation with a tax card - forms of employment

Taxation with a tax card excludes employment of employees on the basis of civil law contracts - i.e. contracts for specific work and mandate contracts. The ban also applies to using the services of other companies and establishments. Employing an employee on the basis of such an agreement will result in the loss of the right to use this form of taxation. It should be emphasized that the ban does not apply to specialist services.

Specialist services are understood as services performed in relation to the conducted activity, the performance of which has not been reported as the subject of activity, but are necessary for running one's own business.

The only acceptable form of employment in the case of a tax card is an employment contract.

Taxation with a tax card and the employee limit

The employment limit for taxation with a tax card means that the number of employees that can be employed by a taxpayer paying with a tax card is limited. This limit is 5 people, and in certain types of activity it is reduced to 3 people.

When determining the number of employees for the purposes related to the tax card, persons employed under an employment contract, persons employed under a tolling contract and family members with a permanent or temporary residence other than the taxpayer, as well as partners of a civil law partnership are counted.

Exclusions from the limit of employees when taxed with a tax card

Only employees employed to provide the services in question are included in the above limit. For example, in a beauty salon, there will be a limit to employing beauticians, as they are employees who provide the services in question. However, this limit does not include employees employed exclusively at:

  • sale of products,
  • accepting orders for services,
  • maintaining cleanliness in the plant,
  • keeping a cash register and accounting,
  • drivers and escorts,

- provided that the employer has specified in writing the scope of activities of these employees.

The limit is not limited to employing:

  • family members living in a common household with the taxpayer, and if the business is conducted by partners - only family members of one of the partners,

  • students for the purpose of apprenticeship or apprenticeship,

  • persons on whose account the activity is conducted after the taxpayer's death, if these persons do not take part in the business,

  • no more than four unemployed graduates referred by the competent employment office to internships with the employer for a period not exceeding twelve months,

  • in total, not more than three employed unemployed or graduates registered in the labor office, while the period of registering the unemployed in the labor office must last at least 6 months in the period immediately preceding his employment.

Referring to the example of a beauty salon, the owner of which uses taxation with a tax card, he may employ 5 employees providing cosmetic services (beauticians), because the services of these beauticians are closely related to his subject of activity and any number of employees dealing with, for example, cleaning, delivery of goods or running a cash register and registering customers, as these services are not specialist services, but are necessary for running a business.