Last updated on 3 July 2020.
Part of the economic relief measures and actions to improve job security in Hungary during the coronavirus pandemic, some payroll taxes are reduced to help retain employees. The structure of fringe benefits and healthcare contributions also changes.
Starting from 1 July 2020, the social contribution tax in reduced to 15.5% (from the current 17.5%). Currently, employers are paying payroll taxes of 19% on the gross salary of their employee, which is made up of the 17.5% social contribution tax and the 1.5% vocational training contribution. From 1 July, they will only have to pay a total of 17%.
| Minimum wage | Guaranteed minimum salary | Other salary | |
| Gross salary (in the contract) | HUF 161,000 | HUF 210,600 | HUF 375,940 |
| Employee’s payroll tax | |||
| 15% Income tax | HUF -24,150 | HUF -31,590 | HUF -56,391 |
| 18.5% Social Security Contribution | HUF -29,785 | HUF -38,961 | HUF -69,549 |
| Net salary (to be paid out) | HUF 107,065 | HUF 140,049 | HUF 250,000 |
| 17 % Employer’s tax | HUF 27,370 | HUF 35,802 | HUF 63,910 |
| Company’s total payroll cost | HUF 188,370 | HUF 246,402 | HUF 439,850 |
The SZÉP Card is a fringe benefit that lets employers achieve savings on payroll taxes, while supporting some sectors of the economy since employers can spend fringe benefits on their SZÉP Card only on specific products and services.
The combined yearly limit of the SZÉP Card fringe benefit is raised to HUF 800,000 (ca. EUR 2,300) from the previous HUF 450,000.
If the employee receives benefits from various employers, the allowed total is still the same, as it is defined per person, not per job.
Payroll taxes for topping up an employee’s SZÉP Card to the above limits:
Healthcare contribution is a payroll tax that is usually paid by employees indirectly: employers deduct it from the gross salary and transfer it to the social security fund. If someone goes on an unpaid leave, usually they must keep paying the healthcare contribution themselves even though they are not receiving a salary so that they do not lose their eligibility for healthcare services.
From now on, however, during the state of emergency, starting from 1 May 2020 employers must pay the healthcare contribution for their employees who went on unpaid leave because of the pandemic. This will let employers use the various healthcare services they need, but it will not make them eligible for receiving sick leave and other benefits. The sum of the healthcare contribution to be paid by the employer is HUF 7,710 (ca. EUR 22) / month, and instead of paying monthly, the employer may choose to pay the total within 60 days after the state of emergency ends.
If you or your employees are affected, contact your accountant to discuss how to proceed. They will help your company remain compliant with current regulations and take even better care of your employees.
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