Increased tax‑deductible costs: rules and conditions

Increased tax‑deductible costs apply mainly to employees who meet additional conditions (e.g., commuting from another locality). It can reduce the taxable base, but only if the formal requirements are satisfied.

Use the KUP calculator for a quick estimate.

Increased tax‑deductible costs — when they apply

Most often when:

• the place of residence is different from the place of work,
• the employee bears commuting costs,
• statutory conditions are met (for example, no specific compensations that exclude the increase).

Check exact requirements in the regulations or with your payer.

Increased KUP and commuting

Increased costs are often linked to commuting. In practice, both the place of residence and whether the employer finances travel matter. See: KUP and commuting.

When increased KUP do not apply

Increased costs are not always available. Common restrictions result from unmet statutory conditions or from benefits that compensate commuting. In such cases, standard costs apply.

Employee statement for increased tax‑deductible costs

To apply increased costs in advance payments, employers usually need a written statement from the employee. Without it, standard costs are used and corrections happen in annual settlement.

Limits and combining costs

Increased KUP are subject to annual limits. If you have more than one employer or multiple income sources, the limits add up for the year. See: KUP limits.

Practical scenarios

Scenario 1: the employee lives outside the locality of work and commutes daily. Increased KUP can apply if a statement is submitted and statutory conditions are met.

Scenario 2: multiple employment contracts in different places. Check how annual limits accumulate and whether the cap is exceeded.

Document checklist

• employee statement of residence,
• information about workplace location,
• documents confirming statutory conditions,
• annual limit verification.

Common mistakes

• no employee statement for the employer,
• confusing residence with registration address,
• ignoring annual limits,
• applying increased costs despite compensations that exclude them.

Increased KUP with multiple employers

If you have more than one employment contract, each payer may apply costs separately. In practice you are responsible for the annual limit and PIT consistency, so it helps to keep a simple summary of costs from each contract.

Do you need tickets or other proof

An employee statement is usually enough, but in verification additional proof may be requested. Keep consistent documents about residence and workplace.

Statement of resignation from increased costs

If you no longer meet the conditions or want to return to standard costs, submit a resignation statement. This prevents incorrect advances.

Deducting increased costs in PIT

If increased costs were not applied during the year, you can include them in the annual return, provided the conditions are met and documents are in place.

What to verify before filing

• whether statutory conditions are met,
• whether the employer has your statement,
• whether annual limits are exceeded,
• whether PIT data match your documents.

Changes during the year

If you change residence, work mode (for example, hybrid) or employer, update your statement. Otherwise costs may be applied incorrectly and the correction will shift to the annual return.

Short timeline

• check whether you meet statutory conditions,
• submit the statement to the employer,
• update data after changes during the year,
• verify applied costs in PIT‑11,
• correct values in the annual PIT if needed.

What if the employer did not apply increased KUP

If conditions were met but costs were not applied in advances, you can include them in the annual return. Keep documents confirming eligibility.

Sources

• PIT Act — tax‑deductible costs (ISAP)
• podatki.gov.pl — PIT