Foreigner's taxes · PIT

Illegal employment and tax — who bears the consequences

Published: 26 July 2026 · Author: Dariusz Włodarczyk Kancelaria TRC · Reading time: approx. 6 min

In cases of illegal employment, the law shifts the tax burden from the employee to the employer. We explain this mechanism, its limits, and why legalisation is safer and cheaper.

Table of contents
  1. Who pays the tax in illegal employment
  2. Consequences for the employer
  3. The employee's situation
  4. Recommendation
  5. Legal basis and sources

1. Who pays the tax in illegal employment

The law provides a special mechanism: an employee's income from illegal employment may be exempt from PIT on the employee's side, and the tax burden and additional consequences are shifted to the employer (Art. 21(1)(151) of the PIT Act together with related provisions).

To be verified: the construction is complex and has been subject to changes — confirm the exact scope of the exemption and the consequences for the employer against the current text of the act.

2. Consequences for the employer

Besides the tax consequences, the employer bears the risk of sanctions for illegal entrustment of work and of contributions. Economically, illegal employment is therefore often much more expensive than legalisation.

3. The employee's situation

The income exemption is intended to protect the employee, but it does not remove other risks — including for the legality of stay and future proceedings. A foreigner should aim for a legal basis for work.

4. Recommendation

Recommendation: instead of relying on "emergency" exemptions, put employment in order from the ground up — the proper permit/declaration, notifications to ZUS and correct PIT.
Show more: why illegal employment does not pay off
The tax and public-finance consequences of illegal employment are analysed by: I. Gęsicka, P. Majka, M. Rydzewska, J. Wantoch-Rekowski, Zatrudnianie cudzoziemców. Problematyka prawa pracy, administracyjnego i finansów publicznych, Wolters Kluwer, Warsaw 2026.

Why it does not pay off

Illegal employment accumulates risks: tax (attribution of income to the employer), contributions (overdue contributions), sanctions (a fine of up to PLN 50,000) and residence. The sum of these risks usually far exceeds the cost of legalisation.

Have doubts about the legality of employment? Let's do an audit

We will check the basis for work, notifications and settlements, identify tax and contribution risks, and the path to full legalisation.

Book a free consultation

Legal notice: this article is for information purposes only and does not constitute legal or tax advice. Legal status: 2026 (Personal Income Tax Act of 26 July 1991, including Article 21(1)(151); provisions on entrusting work to foreigners).

Sources: the PIT Act, incl. Art. 21(1)(151); Act of 20 March 2025, Journal of Laws 2025 item 621; podatki.gov.pl. The above discussion reflects our own analysis; the cited provisions should be verified against the current text of the act before taking action.