The annual tax base for employment income is calculated by subtracting the mandatory insurance contributions and obligatory social security contributions paid abroad from the taxable income.
The government offers the following tax reliefs:
First marriage tax benefit
- Eligibility: The allowance for first-time married couples is available to couples in which at least one of the spouses is getting married for the first time regardless of the place of marriage (whether foreign or domestic). Registered partners are also entitled to the benefit, and the term ‘spouse’ is used in the legislation to include them.
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Benefits: The allowance is granted for 24 months starting from the first month after marriage, at a rate of HUF 33,335. This effectively results in a tax saving of HUF 5,000 per month.
- You can find the template here.
Tax benefits for those under the age of 25
- Eligibility: The allowance for young persons under the age of 25 is available to all individuals who are not yet 25 years old.
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Benefits: The employee is exempted from paying PIT. Remote as your employer deducts it automatically from the monthly payroll. The amount of the tax benefit is HUF 576,601 (around EUR 1,518) per month, which means a tax saving of HUF 86,490 (around EUR 227).
- You can find the template here.
Tax allowance for mothers with four or more children (NÉTAK)
- Eligibility: The allowance for mothers of four or more is available to women who are entitled to family allowances for at least four children of their own or adopted, or who, if no longer entitled, have been entitled to family allowances for at least 12 years. It also applies to women whose entitlement to family allowances has ceased due to the death of a child.
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Benefits: If the mother is entitled to the allowance, she does not have to pay any personal income tax under the Personal Income Tax Act and there is no upper limit to the benefit.
- You can find the template for Tax benefit form for mothers having 4 or more children (N‚gy vagy t”bb gyermeket nevel_ any k kedvezm‚nye) here.
Family tax benefit (PIT)
The family tax benefit reduces the taxable base, and the amount depends on the number of children.
- HUF 66,670 for an employee with one dependent child
- HUF 133,330 per child for an employee with two dependent children
- HUF 220,000 per child for an employee with three or more dependent children
- Employees can claim the family allowance if they are eligible for child benefit, and they can claim their spouse, who resides in the same household but is not eligible for child benefit, as their beneficiary.
- Starting in 2023, the family allowance for dependents of beneficiaries who are permanently ill or severely disabled will be increased by HUF 66,670 per month. As a result, the amount of allowance for these children will increase.
- If the employee cannot use the full amount on taxes, 15% of the remaining amount can be deducted from the social security contributions.
Important
When completing the family tax benefit form, employees must decide if they want to claim family tax benefits alone or jointly with their partner.
- If raising the child(ren) together, select "together" (’közösen’), even if the partner isn’t applying for the benefit. Additionally, also fill in the partner's information as required in point II.
- If raising the child(ren) alone, select "alone" (’egyedül’).
- Family tax benefit form (Csal di kedvezm‚ny) here.
PIT allowance for mothers under age 30
Eligibility: The allowance for mothers under 30 is available to mothers who are under the age of 30 but over the age of 25, who are entitled to the family allowance for their biological or adopted child, and whose entitlement to the family allowance opened after 31 December 2022.
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Benefits: The amount of the allowance is the same as in the case of young persons under 25.
- Tax benefit form for mothers under age 30 (v alatti any k kedvezm‚nye) here.
Personal tax allowance
The personal allowance can be claimed on the basis of a medical certificate of severe disability or a decision on entitlement to an invalidity pension or disability allowance. The medical certificate or decision does not have to be attached to the declaration, but the certificate must be kept within the limitation period.
Persons in receipt of an invalidity pension or disability allowance may claim the personal allowance without a medical certificate.
A person is considered to be severely disabled if
- suffers from one of the illnesses listed in Government Decree 335/2009 (XII. 29.) on illnesses that constitute severe disability, and
- who is in receipt of an invalidity allowance or
- disability allowance.
The amount reduces the taxable base, it is HUF 88,900 in 2024.
Personal tax allowance form for employees with disabilities
EKHO form for Employees with creative jobs
- Eligibility: Employees with special (creative) jobs. Special EKHO-eligible professions are listed on FEOR, the Hungarian Standard Classification of Occupations (“Foglalkozások Egységes Osztályozási Rendszere”).
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Taxation according to EKHO: The general guideline is that income above the minimum wage is taxed at a rate of only 15% after paying taxes and contributions for the minimum wage. Of this 15%, 9.5% is allocated to the personal income tax, and 5.5% is allocated to the social security contribution. It is worth noting that for pensioners, the personal income tax rate is only 9.5%.
- You can find the template here.
Additional holiday for parents with children under age 16
Eligibility: Employees can have additional holidays if they have a child who is under age 16.
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Benefits: Details for additional holidays for employees with child/children under the age of 16 are as follows:
- 1 child under age 16: 2 additional days
- 2 children under age 16: 4 additional days
- If there are more than two children under the age of 16, an additional 7 days will be granted.
- If the employee's child is disabled, the additional leave above shall be increased by two working days per disabled child.
- The child should be considered first in the year of their birth and last in the year they turn sixteen.
You can find the form here.
Please visit the government website to read full details.
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