Income from employment is the most abundant source of tax revenues and is considered second most generous tax within Croatian tax system, right next to the value-added tax. Directness being one of its basic characteristics, made us realize that this tax belongs to the group of the most odious levies imposed upon taxpayers. This very reason has initiated a strong need for unification of all tax principles within this tax to make the burden of tax liability from this source as bearable and compatible as possible. One of the basic principles of taxation, the principle of justice/righteousness has always been in the spotlight, when it comes to the taxation of income from employment. Personal income tax is a tax form with a series of different objectives along with its basic (fiscal) purpose, due to the fact that through this tax government can directly control the effectiveness of social, demographic, and political measures. This makes is the most complex tax form. Righteousness as one of its most disputable features has historically been defined on two basic principles, the principle of usefulness and the criterion/principle of payment options, with two different ways of implementing justice: through the horizontal and vertical equity. The problems with establishing the horizontal and vertical equity of personal income tax have become the subject of numerous scientific research papers and discussions, starting from the fact that different conclusions result from aspects examined/ and or methods used to resolve them, from progressive rates, tax expenditures to personal allowances, depending on the basic characteristics of the country´s economy.