2025 tax benefit reduction for third-country nationals in Hungary

Is this relevant to you?

The change might be relevant to you in the following cases:

• If you are a third-country national who is employed by a Hungarian company (except if you are Serbian or Ukrainian)
• If you operate a Hungarian company and employ third-country nationals

The precise definition is that to receive the listed personal tax benefits, the employee must be either a citizen of an EEA member state or of a country neighboring Hungary. Out of the countries neighboring Hungary, only Serbia and Ukraine are not members of the EEA. As a result, it is relevant to all third-country nationals, except for Serbian and Ukrainian citizens.

Please note: Hungarian news outlets seem to use the Hungarian equivalent of “guest worker” when talking about who the new regulation is relevant to. However, this conflates various technical terms.

• The new law is relevant not only to foreigners working in Hungary with a “guest worker residence permit”, but many others as well.
• The new law is not relevantto workers who are citizens of EEA member states
• The new law is not relevant to Serbian and Ukrainian citizens

Which tax benefits are concerned?

The new regulation on personal income tax concerns the following tax benefits:

• Tax benefit of those under 25 (no personal income tax, which is 15%)
• Tax benefit for the recently married (tax base decrease by HUF 33,335, meaning a net salary increase by HUF 5,000)
• Family tax benefit (tax base decrease based on the number of children, currently meaning a net salary increase of HUF 10,000, HUF 20,000, or HUF 33,000, but would increase from 2025)

What comes next?

If you are an EEA citizen, or a citizen of Serbia or Ukraine

The new law does not concern you. Personal tax benefits may be applied to your Hungarian salary the same as before.

If you are a third-country national (and not Serbian or Ukrainian)

In line with the new law, the above listed 3 personal tax benefits may not be applied to your Hungarian salary. If you are currently receiving any of the above tax benefits, your net salary will decrease, even if your gross salary stays the same. Out of these, losing the tax benefit of those who are not yet 25 years old might be the biggest cut, since the 15% personal income tax will be a significant decrease to your net salary.

If you operate a company in Hungary

The new law does not affect your company costs. It will only have an impact on the take home pay of your employees. Since employers pay the employees’ taxes directly to the Tax Authority, payroll records and workflows must be updated so only the eligible employees receive the listed tax benefits in the future.

At your own discretion, you as an employer may decide if, in light of this, you want to give your employees a higher raise than what you originally considered for the next year (since the start of the year is always a good time to raise salaries, even if they do not get below the minimum wage).

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