Don’t forget to donate your 1% personal income tax

What happens to my personal income tax?

Your income generated in Hungary is taxed at 15%. If you work in employment, it gets deducted from your monthly salary and your employer pays it directly to the Tax Authority, this way you receive your net salary (sometimes also referred to as take home pay).

Personal income tax covers about 10% of the income of the government budget. Each year, the government decides how they will spend that money alongside the rest of the budget. As a result, you do not have direct control over what happens to your personal income tax. You can only exercise indirect control, by voting in the general elections – which is available only to Hungarian citizens. (If you have an address card, however, you can vote in the municipal elections. The next one is coming up in a month, on 9 June 2024.)

Take direct control over how your personal income tax is spent

Even though most of your personal income tax will be budgeted by the government, you do have direct control over 2% of it. When you submit your yearly tax income report, you have an option to redirect 1% to an NGO and another 1% to a church. This is why the streets are full of billboards asking for “your 1%”, as organizations want to convince you to donate your 1% to them.

If you do not indicate where you want to redirect your 1%, it will be simply added to the government budget. As a result, if you wish to have more control over how your taxes are spent, this is a great opportunity to take action.

Who can receive my 1%?

When you are filing your tax returns, you actually have 2 batch of forms you can fill in: one for your personal income tax, and one for the 1+1%. This is true whether you are taking care of this online or on paper. You will see that the 1+1% form has two sections:

• Choose a non-governmental organization
• Choose a church (they are also referred to as organizations with a technical number)

If you start typing the name of each, you will be able to select the one you prefer from a dropdown menu. You can also check the options separately, on the website of the Tax Authority, where every organization that is eligible for the 1% donation is listed (NGOs and churches separately).

If you need inspiration, you can also check out the list of NGOs the Helpers Team supported during our latest Christmas charity drive.

Supported organizations in 2022

Of course, the Tax Authority always publishes statistics of the donations made in the previous years. You can check out the data here.

In 2022, over 29,500 non-governmental organizations received donations from the 1% personal income tax of 1.8 million taxpayers, with a value of HUF 15.3 billion (over EUR 38 million). The 10 most prominent recipients were as follows:

In 2022, over 150 churches or similar organizations received donations from the 1% personal income tax of almost 2 million taxpayers, with a value of HUF 15.5 billion (almost EUR 39 million). The 10 most prominent receivers were as follows:

Make the most of your Hungarian tax residency

Even if you are not a Hungarian citizen, you do have some control over how your personal income tax is used. Make sure to exercise your rights in deciding how your taxes are spent, and support a good cause. You can do this by 21 May 2024, Tuesday, which is also the deadline for submitting your personal income tax report.

About Helpers Hungary

Helpers provides immigration and business assistance to foreigners living, working, and doing business in Hungary. Our goal is to make navigating Hungarian bureaucracy easier for everyone, and making you feel more at home here in Hungary.

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