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PIT-11 - various situations described in the examples

PIT-11, i.e. information on income and withholding advance payments for income tax, is a document that the employer should provide employees by the end of February (Article 39 (1) of the PIT Act). However, there are various situations in which it is not known what the trader should do. In this article, we will present some unusual situations along with the procedure.

The employee leaves the company during the year

An employee who leaves work during the tax year, also in the case of retirement or disability pension, may submit an application to the employer for an early PIT-11 issue. On its basis, the employer, within 14 days from the date of submitting the application, should prepare and submit PIT-11 to the employee and the tax office competent for the employee's place of residence (Article 39 (2) of the PIT Act).

PIT-11 should be prepared in 3 copies: for the employee, the tax office and for yourself.

Example 1.

Ms Iwona on September 30, 2020 terminated the employment contract with immediate effect. She also applied for an earlier PIT-11 issue because she was afraid that the company would no longer exist in February. At the request of Ms Iwona, the employer should, within 14 days, provide her with information on the income and advances collected, and send the second copy to the tax office.

There may also be a situation where the employee concludes another employment contract with the employer after the termination of the contract with the employer. Then also the employer is not obliged to prepare PIT-11 after termination of employment. It is not until the end of February of the following year that PIT-11 is prepared, in which it takes into account all the income that the employee has achieved (including all employment contracts).

However, the employee may, after each termination of the employment relationship, submit an application for PIT-11, for which the employer then has 14 days. However, if an employee receives PIT-11 and takes up another employment with the same employer, only the next employment will be listed in the next PIT-11. The previous one should not be corrected, it will have several PIT-11 for each period of employment.

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Employer liquidation

Due to the liquidation of the workplace, the employer is obliged to provide employees with the PIT-11 declaration:

until the day of cessation of activity - in the case of drawing up PIT-11 under civil law contracts (Article 42 (3) of the PIT Act),
within the standard deadline by the end of February of the following year - in the case of PIT-11 for employees who have earned income from an employment contract.

However, if the employee submits an application for the earlier PIT-11 information, the employer is obliged to prepare it within 14 days.

Takeover of the workplace

In the case of taking over the workplace (Art. 231 of the Labor Code), the new employer is obliged to prepare the PIT-11 document, also taking into account the period of employment in the acquired establishment.

Death of an employee

The death of the employee is a problematic situation, because what to do in such a situation? Should PIT-11 be prepared at all, and if so, who should this document be submitted to?

Well, in the event of the employee's death, the employer is still obliged to prepare PIT-11. The information should be provided to the competent tax office and possibly to the spouse of the deceased employee who would like to make a joint settlement, and the data contained in PIT-11 are necessary for him to do so.

If, after the death of the employee, the employer pays benefits due to the deceased employee, they must be entered in PIT-11, in accordance with Art. 631 § 2 of the Labor Code, after the death of an employee, property rights are transferred to his spouse, as well as other persons who are entitled to a survivor's pension. Therefore, it is the income on which you should collect income tax advances. Additionally, PIT-11 should not include tax deductible costs and tax relief.

To sum up, if an authorized person, e.g. a spouse, receives additional benefits (including a death benefit) after the death of an employee, then after the end of the tax year such person will receive two PITs, one for the deceased person and the other for property rights obtained after the employee's death. .

Example 2.

Mr. Jan was employed in the company X. Unfortunately, he died in May 2020. After the death of the family of the deceased employee, the equivalent was paid for unused leave and death in death. These benefits should be indicated in PIT-11 and the document should be submitted to the tax office and the deceased employee's spouse. The spouse should also receive a second PIT for the deceased husband.

If there are no persons entitled to receive benefits from the employer of the deceased employee, the payer does not collect the advance payment and does not draw up the PIT-11 document.

Childcare leave or unpaid leave

If the employee was on childcare leave or unpaid leave throughout the tax year and did not receive any taxable benefit during that time, the employer is not required to prepare PIT-11.

Cooperating person

The employer may employ a member of his family as a cooperating person. Such a person may be employed on the basis of an employment contract, mandate contract, specific task contract, and may also perform work without remuneration.

If the cooperating person achieved income from cooperation in a given tax year, the employer should issue a PIT-11.

Importantly, if the cooperating person is a family member who lives with a person running a business, social contributions and health insurance are fully financed by the employer, which means that they should not be entered in PIT-11 of the cooperating person. The employer can deduct these contributions from his own tax.

Employment contract and mandate contract

An employee who performs work for the same employer in a given tax year under an employment contract and contract of mandate should receive one PIT-11 information from him, in which the income from both contracts will be taken into account. It does not matter if there was a break between the contracts, showing revenues on one document will be correct.

The revenue from the mandate contract does not exceed PLN 200

A contractor whose remuneration is not higher than PLN 200 gross, has a flat-rate tax of 17% on remuneration, excluding tax deductible costs. In such a situation, the employer does not issue PIT-11.

A mandate contract for an amount not exceeding PLN 200 gross is subject to a flat-rate tax of 17%.

Employees posted to work abroad

If the employee was posted to work in a country with a double taxation agreement, by completing the PIT-11 information:

all income earned by the employee from the employer, both in Poland and abroad, must be shown;
tax paid abroad should not be shown;
all social and health contributions paid to ZUS as well as to the EU, EEA and Swiss Confederation systems should be shown;

Place of residence in a location other than the work performed

An employee who lives in a location other than the one in which he performs work should take into account the increased tax deductible costs in the amount of PLN 300. Higher tax-deductible expenses may only be applied if the employee submits an appropriate declaration.

But what if the employee submits such a declaration, and in fact the place of residence is the same as the place of work? The employer does not have to worry about this. His task is to account for the employee in accordance with the submitted statement. It is the employee who will be responsible to the tax office in the event of overcharging.

PIT-2 and PIT-11

PIT-2 is an employee's declaration for the purpose of calculating monthly advances on personal income tax. If on this document the employee designates the employer as competent to reduce the advance payment, the employer must take into account this declaration and when calculating the advance payment for income tax, take into account the exempt amount, which from October 1, 2019 amounts to PLN 43.76 per month. Collected advances, after deducting the free amount, are entered by the employer in PIT-11.

Incorrectly paid advances for income tax

In the case of incorrectly paid income tax advances, PIT-11 should be drawn up in accordance with the actually collected advances. If:

the employer has taken too high advance payments - the employee may apply for a refund of the overpayment,
the employer charged low advance payments - the employer may submit an application to the tax office. Then the office may demand a subsidy from both the employer and the employee.

Incorrectly paid advances for income tax may result in an overpayment or underpayment. In the event of underpayment, the employer may be charged with costs.

PIT-11 correction

It may happen that the employer incorrectly completes PIT-11. Then, a correction of the declaration should be issued. It should be accompanied by a justification explaining the reason for the correction of the declaration.

The correction should also be made if, after submitting PIT-11, the employee asks the employer to change the place of residence in this document (moving during the year).

Shipment returned to the sender

What should the employer do if he submitted the PIT-11 declaration within the prescribed period and the parcel was returned with a note that the addressee has moved out? If it is possible to determine the correct address, the employer may re-send PIT-11. However, if this is not possible, the returned parcel with the proof of posting should be kept for 5 years in the event of inspection by tax authorities.

Generating PIT-11 declarations in the wFirma.pl system

By using wFirma.pl, you can prepare tax declarations for employees, including PIT-11. In the PERSONNEL »DECLARATIONS tab, just select ADD DECLARATION» EMPLOYEE INCOME DECLARATION (PIT 11). The system allows you to generate these declarations collectively for all employees or for each of them individually.