Unregistered business activity, or unregistered business activity, is an extremely interesting way to earn money in Poland. In some cases, you may find that you can generate surprisingly high income without the need for typical business accounting and even without paying social security contributions. However, unregistered business activity is not the same as working for yourself illegally – regulations still apply. In this article, we'll explain which regulations you need to be aware of and how to account for income from unregistered business.
What is unregistered activity? Definition
Unregistered activityand in fact, unregistered activity is an extremely interesting legal structure. Article 5 of the Entrepreneurs' Law Act It introduces a negative definition, according to which the activity of a natural person whose quarterly income does not exceed 225% of the minimum wage does not constitute an economic activity. In other words, the Entrepreneurs' Law considers you an entrepreneur only if in any quarter of the year you earn more than 225% of the minimum gross wage – that's approximately 10 813.50 PLNThe second important condition is the passage of time – if you were self-employed within 60 months prior to starting your business, you must unfortunately register with CEIDG.
The provisions of other important acts (tax, social security) do not refer directly to the concept of unregistered activity – however, they are usually based on the definition of an entrepreneur or contracts similar to mandate contracts.
What is very important, the fact that under entrepreneurial law you do not conduct business activity does not exempt you from the obligation to pay taxes.
Who can conduct unregistered business?
Only individuals can conduct unregistered business activity, and only individually – therefore, it's not possible to conduct an unregistered civil partnership. The aforementioned grace period should also be taken into account – a person who has conducted business activity registered with CEIDG within the last 60 months cannot conduct unregistered business activity. It is assumed that suspending a business activity is treated analogously to not conducting business activity.
Can any business be run on an unregistered basis?
Unfortunately not, and it's worth being aware of this. When running an unregistered business, you will not obtain a concession, license or entry in the register of regulated activities. Of course, it would be difficult for us to imagine applying for a license by a person whose income is around PLN 43 per year????
How to calculate the income limit for unregistered activities?
The limit on revenues from unregistered activities has evolved over the years, but currently, the rule is quite simple – During a calendar quarter, your sales revenue cannot exceed 225% of the minimum monthly salary. In 2026, this amount is PLN 10,813.50 gross per quarter.
What counts towards the income limit?
In practice, a significant portion of the challenges faced by aspiring entrepreneurs stems from precisely how revenue from unregistered businesses is calculated. This is crucial, of course, because exceeding the revenue limit requires registration with the Central Registration and Information on Business (CEIDG), and therefore the obligation to pay social security contributions.
The amount of income is everything that is due to you from the sale – this means the amount for which you issued invoices, not what you received in your account, your income after deducting costs or profit after taking into account tax.
Up to the limit amount VAT, packaging costs and shipping costs are also included. Revenues already reported (e.g., based on an invoice) but not yet received are also counted. This is due to the accrual method.
What happens when you exceed the unregistered activity limit?
Once the limit is exceeded, unregistered activity becomes a business activity. This occurs on the day you earn revenue exceeding the aforementioned PLN 10,813.50 in a given quarter. This means that obligation to submit an application for entry into CEIDG within 7 days from the date of exceeding the limit.
Is it necessary to keep accounting records for unregistered businesses?
In a sense, yes, although of course it looks and works differently than in the case of a traditionally understood sole proprietorship. A taxpayer conducting unregistered business activity must keep records of sales for the purposes of calculating taxable income and maintaining the quarterly revenue limit.
Our experience shows that tax authorities allow sales records to be kept in the form of a spreadsheet, such as Excel. It's recommended that such records include, among other things:
- Date of sale
- Document number – you can number your documents in virtually any way you like, as long as it is done consistently, repetitively and logically,
- Description of goods and services
- Income amount
- Forma płatności
- Customer data if it can be obtained
Of course, the regulations do not regulate how such records are kept. They are simply intended to reliably track your income and tax base. According to government website, it would be best if the cost documents included your identification data (name, surname, address).
If you run an unregistered business, you can deduct expenses incurred to generate income. These may include production materials, packaging, tools, sales platform commissions, and advertising expenses. Every time you purchase something related to your unregistered business, be sure to keep proof of purchase. You don't need to write down the reasons for the expense.
Similarly to keeping records of income, it's also worth keeping records of expenses. Note the date the expense was incurred, its number, a brief description of the item or service purchased, and the amount paid.
Income tax on unregistered activities
When running an unregistered business, you must pay income tax like any other entrepreneur or employee. Importantly, income earned from this activity is always accounted for in the general principles, i.e. on the so-called tax scaleThis, of course, means the possibility of using the tax-free amount, but also a high personal income tax rate after exceeding PLN 120,000 per year.
You can settle income from unregistered activities on the PIT-36 form.
Social Insurance Institution (ZUS) and health insurance contributions for unregistered activities
The issue of contributions for individuals conducting unregistered business activity is controversial, mainly due to the lack of appropriate statutory regulations in this area. Generally, it is assumed that Persons conducting unregistered activities do not have to pay social security contributions or health insurance contributions on the income they obtain in this way. In our opinion, however, this is not entirely true.
While we can agree that the lack of contributions for the sale of goods is fully justified, in the case of persons providing services, the situation becomes more complicated. As rightly noted Legalis, the Social Insurance Institution often treats unregistered entrepreneurs as contractors, and therefore the persons employing them (including natural persons) are required to pay insurance contributions.
The practical application of these regulations is, of course, extremely rare, and the Social Insurance Institution's (ZUS) ability to monitor individuals conducting unregistered business activities is quite limited. However, to conduct business in compliance with regulations and avoid risk, you should consider your contribution obligations when providing services.
Due to the relatively low income limit, few people consider unregistered work as their primary source of income. However, it's worth remembering that in such a situation, you may not be covered by either pension or health insurance.
VAT on unregistered activities
Unregistered business activity doesn't automatically mean you won't have to pay VAT – the provision of services or the supply of goods for a fee are, after all, activities that are generally subject to VAT. On the other hand, due to the small amount of revenue, persons conducting unregistered activities can usually benefit from VAT exemptionHowever, this is not always the case, as there are at least a few services and goods that deprive taxpayers of the right to benefit from the exemption. Examples include the provision of consulting services, factoring, and online electronics trading.
It is also worth paying attention to the issue import of services on VAT groundsFirst of all, running an unregistered business does not exempt you from paying tax on things like Instagram ads or Canva subscriptions.
Unregistered activities and the cash register
Running an unregistered business doesn't exempt you from the obligation to own and use a cash register. Many aspiring entrepreneurs conducting small retail sales won't need to purchase a cash register, as the annual exemption limit is PLN 20,000 per year, calculated pro rata upon commencement of business during the year.
However, if you run an unregistered business providing hairdressing, beauty or vehicle repair services, you must have a cash register from the first day of your business, before you make your first transaction with a customer.
Issuing invoices and bills for unregistered activities
If you run an unregistered business, you likely don't have a Tax Identification Number (NIP), though you can apply for one in certain circumstances (VAT registration, purchasing a cash register). However, your primary tax identification number is your PESEL number.
It's worth noting that if you run an unregistered business, you may also be required to use KSeF; you can also join the system voluntarily. Since every structured invoice must include the issuer's Tax Identification Number (NIP), you must obtain a NIP number before registering with KSeF.
In addition to structured invoices, you can also issue so-called receipts. These are confirmations issued at the buyer's request. The law does not specify what exactly should be included on such a document, but in our opinion, it is worth including:
- Account number
- Date of invoice issue
- Seller details
- Buyer details
- Name of the service or product
- The amount due
If the buyer doesn't contact you for an invoice, you don't have to. However, this doesn't relieve you of your obligation to meet the quarterly limit, which in practice requires you to maintain some form of revenue records. For this reason, we recommend always issuing invoices – it carries no negative consequences.
The most common mistakes made when running unregistered businesses
Jako a consulting company specializing in taxes We rarely deal with clients operating unregistered businesses. However, after nearly 10 years in the market, we can point out a few common mistakes made by novice entrepreneurs.
- Confusing revenue with income – The quarterly limit for unregistered activity applies to revenue, not income. However, you pay income tax on income less costs,
- Failure to keep sales records – the lack of a formal obligation to keep a tax book of income and expenses does not exempt you from the obligation to keep any documentation,
- Accounting for revenues on a cash basis, not an accrual basis – in the case of unregistered activities, revenues for the purposes of the quarterly limit are settled on an accrual basis – therefore, revenues due are counted, not those received on account, while costs and revenues for the purposes of filing the annual tax return are settled on a cash basis, i.e. at the time they are actually incurred,
- No proof of costs – If you want to deduct expenses, you must keep documents confirming these expenses – a bank statement alone isn't enough. Beginning entrepreneurs often forget this, which can be disastrous in the event of an audit.
- Too late registration with CEIDG – You have just 7 days to register with CEIDG after exceeding the revenue threshold. Missing this deadline can have serious consequences.
Summary
Unregistered business activity is a great way to start a business. A trial run is a less formal, yet still very progressive, step towards growing your business. If our article hasn't answered all your questions, please contact us – we'd be happy to help!
