Employee volunteering as a tax-deductible cost for employers

Employee volunteering is a popular element of corporate social responsibility (CSR) strategies, whereby employers encourage their staff to engage in social or charitable activities, often with organisational and financial support from the company.

From the employer’s perspective, employee volunteering is frequently part of their CSR policy and an added benefit for employees, who can spend an extra day (or more) contributing to community initiatives instead of performing their regular work duties.

One of the key tax issues related to employee volunteering is whether the employee’s remuneration for the time spent volunteering, as well as the organisational and logistical expenses incurred by the employer, can be recognised as tax-deductible costs.

Tax-deductible costs for employers

In order for such expenses to be recognised as tax-deductible, they must meet the general conditions set out in Article 15(1) of the Polish Corporate Income Tax Act, namely:

• they must be related to generating revenue or securing a source of revenue,
• they must be properly documented,
• they must not fall under the category of expenses explicitly excluded from tax-deductible costs.

Documentation requirements

From a documentation perspective, it is essential to implement and adopt a CSR policy that includes provisions for this type of employee engagement. It is also advisable to define the rules for its implementation in internal regulations (e.g. a workplace volunteering policy included in the employee handbook). In such cases, expenses related to employee remuneration and organisational efforts should not be challenged by tax authorities.

Tax authorities are generally willing to accept expenses incurred in connection with socially oriented initiatives as tax-deductible, provided the taxpayer can demonstrate a link to their core business activity. Insufficient documentation or a lack of proper formal framework may result in adverse tax consequences.

Tax authorities’ approach

Tax authorities emphasise that CSR-related expenses may be recognised as tax-deductible costs if they have a direct impact on the company’s operations and are not merely image-building initiatives.

For instance, in a tax ruling dated 10 November 2022 (ref. 0114-KDIP2-2.4010.38.2022.2.KW), the Director of the National Tax Information confirmed that the cost of employee volunteering—consisting of allocating a certain number of working hours to pro-social initiatives—can be treated as a tax-deductible expense for the employer. At the same time, the authority stressed the need to exclude from tax-deductible costs any expenditure that may be classified as donations or representation expenses. It was noted that promoting socially or environmentally positive actions, strengthening business relationships, and improving employee relations can justify recognising such expenses as business-related.

In another ruling dated 14 February 2025 (ref. 0111-KDIB1-1.4010.759.2024.3.KM), the Director of the National Tax Information stated that if socially responsible activities help enhance the company’s competitiveness—for example, by improving relationships with employees and the local community—such expenses may be considered economically justified.

In practice, the key to recognising CSR-related expenses as tax-deductible lies in proper formal preparation, including having a written CSR policy that outlines the taxpayer’s objectives and initiatives in the area of sustainable development. Such documentation supports the argument that the incurred expenses are linked to revenue generation or safeguarding a revenue source.

At MDDP, we offer comprehensive support in the tax treatment of expenses related to CSR activities, helping clients minimise the risks associated with such spending.