Unregistered activity is a solution for people who have an idea for their own business but are wary of the initial costs, high ZUS contributions, and obligations that come with running a traditional business. It is also a gateway for those who only earn a bit on the side – for example by giving tutoring lessons, taking on simple orders, or selling handmade goods – without earning high income from it. The option of running a "business without a company" has existed for several years. The idea has clearly appealed to thousands of enterprising people who want to take advantage of this solution. However, many issues remain contentious. Today we will talk about unregistered activity – a privilege available to almost everyone. Let's take a close look at what is called unregistered activity. Business without formalisation? Possible!
Unregistered activity, i.e. a business in demo mode
The restrictions set by the legislator mean that unregistered activity has two main target groups, which I discuss below.
- The first group is made up of small freelancers: tutors, translators, copywriters, graphic designers, and other people who treat this as a side activity and whose main source of income is, e.g., full-time employment. They don't want to devote themselves to developing a big business. What they do allows them to earn a few hundred, a thousand, or a bit more zł per month. However, they don't see this as a transitional period. Thanks to the existence of unregistered activity they don't have to work against the current rules. They can do what they used to do fully legally – without stress or bureaucracy.
- The second group primarily includes people who use the period of greatest freedom to build a client base and develop their products and the entire company structure. Unregistered activity lets them focus on the core of their operation. When they no longer fit within the framework set by law, they move on to running regular, registered business.
Who can carry out such activity?
Unregistered business activity can be carried out by anyone who has not conducted traditional, officially registered business activity. Their projected earnings from this activity cannot exceed 75% of the gross minimum wage in any month (before 1 July 2023 the limit was only 50%, but it was raised).
In 2023, the gross minimum wage is 3,600 zł gross (as of 1 July 2023), and 75% of that is 2,700 zł – this is the upper limit of income from unregistered activity.
If the limit is exceeded, business registration will be required.
Note! Income is not the same as revenue. Revenue is the sum of invoices (the total value of products sold or services provided) without deducting costs.
If you happen to exceed the set income limit, you will have 7 days to register in CEIDG the business that is automatically created – after reaching income exceeding 75% of the minimum wage.
Unregistered activity – restrictions
In the paragraph above I listed the conditions that a person wishing to run unregistered business activity must meet. However, these are not all the restrictions. With this settlement method you will not be able to carry out regulated activity, i.e. activity requiring specific licences or permits.
As a rule, minors also cannot start unregistered activity. This is dictated by many considerations that could be the subject of a separate article. From a legal perspective it is not permitted. However, nothing prevents persons under 18 from providing services under umowa o dzieło. In this article I looked at several examples of interesting activities for minors and the formal aspects.
Any income-generating activity in Poland is, of course, subject to taxation. The same rule applies to unregistered activity. Its constraint is the need to pay tax under general rules, i.e. on the two-step tax scale. It is not possible to settle this type of activity via the flat tax (which would be pointless anyway given the income limit) or the tax card.
How to handle income from unregistered business activity
You must declare your unregistered business activity in the annual PIT-36 tax return. Income earned in this way should be entered on the appropriate line: Unregistered activity within the meaning of Art. 20 sec. 1ba of the Act. You will not have to pay monthly or quarterly income-tax advances. In the appropriate column you can also include costs of earning revenue.
The deadline for tax payment is the deadline for filing the tax return, i.e. (under current rules) by 30 April. The tax must be paid to an individual micro-tax account. You can find it using the generator – by entering your PESEL number or NIP.
Of course, we always file the personal income tax return for the previous year – by 30 April 2024 for 2023, and so on.
Remember that for effective calculation it is worth keeping a sales record, even if it is very simple. Thanks to this you will know how much tax you will need to pay. If an official asks any questions, you can show your notes.