An  incidental employee referral programme for job candidates may be recognised as a competition, with any awards being subject to a 10% flat-rate personal income tax (PIT), as confirmed by the Supreme Administrative Court in its judgment of 15 January 2026 (case No II FSK 541/23). This is an important signal for employers that payments under such programmes do not necessarily have to be subject to progressive taxation.

The tax qualification of income earned under such a programme depends on its structure. If the initiative has formal rules, a competitive element, transparent winner selection criteria, and participants are not obliged to provide recruitment services nor act as professional recruiters, it may qualify for the 10% tax rate applicable to competitions. The incidental nature of the programme – rather than its permanent or systemic character – is also of key importance.

For HR departments, this means that a one-off referral programme with clear rules and a competitive element may be taxed at 10%, provided it does not amount to ongoing recruitment activity. If the programme is cyclical, or if it effectively replaces the work of recruitment teams or cooperation with recruitment agencies, then the risk of a different tax classification increases significantly.

It is therefore advisable, already at the design stage, to analyse not only the motivational but also the tax aspects of such a programme to ensure tax compliance and minimise risk.

Find more articles in PRO HR February 2026.