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Employee discretional bonus as an element of author’s remuneration


An employer may apply 50% tax-deductible costs to a discretional bonus paid to an employee who conveys the copyright to the works he has created. This conclusion follows from the judgments of the Voivodship Administrative Court (WSA) in Łódź of September 10, 2019, case no. I SA/Łd 258/19 and case no. I SA/Łd 257/19.

In the case at issue, a company's employees were involved in the organization of marketing campaigns. The scope of the employees' duties was primarily to carry out creative activities which resulted in the creation of works within the meaning of the Act on Copyright and Related Rights.

The employees’ remuneration consisted of a basic salary and discretional bonus. The company explained that in calculating the royalties it considered the basic salary as well as discretional bonus. The salary was divided by the nominal working time, and the resulting hourly rate was multiplied by the number of hours of creative work, which the employees show in their timesheets. The bonus was calculated likewise, i.e. the bonus amount was divided by the actual hours of work, the resulting hourly rate was then multiplied by the number of hours of creative work. The total of both components provided the basis for calculation of the 50% of tax deductible costs.

In the above judgments, the Voivodship Administrative Court indicated that the revenue set out in Art. 22 (9) of PIT Act may also comprise a discretionary bonus if it is directly related to the use by the employee-author of the copyright or his disposal of the right.

As it was rightly pointed out in the above judgments, the provisions regulating authors’ remuneration do not preclude the payment of employee’s-creator’s remuneration in the form of bonus. It has been pointed out by the jurisprudence that it is admissible to grant an employee–creator ‘additional remuneration’ based on contractual arrangements. In the opinion of the Voivodship Administrative Court (WSA), it should be recognized that a bonus can constitute additional remuneration for the use of copyright by the employee-creator (or for the acquisition of that right by the employer).

The judgment emphasizes that not to all bonuses paid to an employee-creator, can increased (i.e. 50%) tax deductible costs be applied. In order to apply the increased costs, it is necessary to prove the relationship between the revenue and the use of copyright (or related rights), or the disposal of these rights.

According to the Court, the way a bonus is granted is not sufficient in determining whether or not the bonus is connected with the work at issue. In a situation where an employee who performs works under a contract of employment agrees to such a way of remuneration for transferring the right to dispose of copyright to the employer, no authority may question the validity and effectiveness of the contract in this respect.

The rulings are not final.


Paulina Andrzejczyk, Tax Consultant, ATA Tax Sp. z o.o.

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