In this briefing, we have summarised the changes we consider to be the most important for payroll for 2022.
Minimum wage in 2022
From 1 January 2022, the minimum wage for a full-time employee is HUF 200,000/month, HUF 45,980/week, HUF 9,200/day, HUF 1,150/hour.
The guaranteed minimum wage for a full-time employee in a job requiring at least secondary education or secondary vocational qualification is HUF 260,000/month, HUF 59,780/week, HUF 11,960/day, HUF 1,495/hour
In this context, we would like to ask you to please review the amount of wages set for employees, which should be at least equal to the above rate from 1 January 2022.
Thresholds applicable to the effect of a change in the minimum wage:
| Legal address | 2022 | 2021 |
|---|---|---|
| amount of rehabilitation contribution | 1.800.000 HUF/person/year | 1.449.000 HUF/person/year |
| amount of personal allowance reducing the tax base | 66.700 Ft/month | 55.800 Ft/month |
| minimum threshold for the payment of contributions | 60.000 Ft/month | 48.300 HUF/month |
| minimum payable to a simplified employee | 978 Ft/hour | 819 Ft/hour |
| a minimum wage for a simplified worker employed in a job requiring specialised skills | 1.301 Ft/hour | 1.095 Ft/hour |
| the daily exempted amount of a simplified employee | 11.960 Ft/day | 10.010 Ft/day |
| the daily exempted amount of a simplified employed person for a job requiring specialised skills | 15.548 Ft/day | 13.091 Ft/day |
| The maximum amount of wages that can be paid in the framework of simplified employment is HUF 1,000 or HUF 500 of public tax | 18.400 Ft/day/person | 14.820 Ft/day/person |
| the maximum value of certain one-off gifts of small value which may be given as a defined benefit | 20.000 Ft | 16.740 Ft |
| maximum amount of tax-free admission tickets to sporting and cultural events | 200.000 Ft/year | 167.400 Ft/year |
| the ceiling on social contributions payable by natural persons | 4.800.000 Ft | 4.017.600 Ft |
| amount of health service contribution | 8.400 HUF/month, 280 Ft/day | 8.000 HUF/month, 270 Ft/day |
| Maximum amount of GYED | gross 280.000 HUF/month | gross 234.360 HUF/month |
| maximum daily amount of sick pay | gross 13.333,33 HUF/calendar day | gross 11.160 HUF/calendar day |
| earnings limit for people receiving benefits before the age of majority | 3.600.000 HUF/year | 3.013.200 HUF/year |
Employer's social security contributions
Contribution to vocational training
From 1 January 2022, the vocational training contribution will be abolished by merging it into the social contribution tax.
Social contribution tax
The total social contribution tax rate from 1 January 2022 is 13%.
The tax burden on fringe benefits is 28% (15% VAT + 13% social contribution tax), while the total tax burden on certain defined benefits is 33,04% (15% VAT + 13% social contribution tax on 118% of the benefit).
Tax relief for vocational training and dual training - can be used as a social contribution tax credit, with the exclusion of the vocational training contribution.
Anyone who has concluded a vocational training employment contract with the student or person participating in the training under the Vocational Training Act, or a student employment contract with the student under the National Higher Education Act, or, in the case of a practical bachelor's degree course, a cooperation agreement with the higher education institution, may claim a normative-based social contribution tax credit.
Small business tax
The KIVA rate will be reduced from 11% to 10% from 1 January 2022. The entry threshold remains at HUF 3 billion and the exit threshold remains at HUF 6 billion.
The burden for fringe benefits is 25%, (15% PAYE + 10% NIC) while the total public burden for certain defined benefits is 27,7% (17,7% PAYE + 10% NIC).
ECHO
From 1 January 2022, the rate of the EKHO payable by the payer will be 13% instead of 15,5%.
KATA
From 1 January 2022, the base for social security and labour market benefits for declared small taxpayers will increase. From HUF 102,000 to HUF 108,000 for full-time small taxpayers and from HUF 170,000 to HUF 179,000 for small taxpayers who pay higher-rate itemised tax.
Representation and business gifts
As from 1 January 2022, representation and business gift allowances as defined in the Income Tax Act will again be subject to social contribution tax.
Tax benefits
Tax exemption for under 25s
From 1 January 2022, young people under 25 will not have to pay personal income tax
This does not mean an unlimited tax exemption, but that individuals under the age of 25 can claim a maximum amount of tax relief on certain specific (earned) income.
The tax relief is available up to the level of the average gross income registered in the month of July preceding the year in question. This was HUF 433 700 in July 2021. The limit is not calculated on the basis of annual income, but in proportion to the number of months of entitlement. Eligibility months are those months in which the young person has not reached the age of 25.
The benefit is automatic and the last month in which it can be claimed is the month in which the beneficiary reaches the age of 25. It is therefore only necessary to make a declaration for those who do not apply for all or part of the benefit.
Those who work through a student union are also eligible.
The order of the tax reliefs available under the legislation in force is as follows:
- benefit for mothers with four or more children
- Benefit for young people under 25
- personal discount
- first-married couples allowance
- family discount
However, it is important to note that the first-married couples' benefit is extended if both members of the couple entitled to the first-married couples' benefit are under 25. In this case, the first married couples can claim the tax allowance after the age of 25, with the first month of entitlement being the month preceding the month in which one of the spouses reaches the age of 25, so that one of the spouses is no longer entitled to the allowance.
In the case of marriages contracted before 1 January 2022, if the spouses started claiming the first marriage allowance before 1 January 2022, they must suspend claiming it until they claim the allowance for young people under 25.
Benefit for mothers of four or more children
From 1 January 2022, no new declaration will be required annually to claim the benefit for mothers of four or more children if the individual has already made a declaration and claims the benefit for children for whom they have been entitled to family allowance for 12 years.
SZÉP card
As of 1 January 2022, the rules of the Income Tax Act will apply again to SZÉP card benefits.
- Recreational envelope
- 450.000 HUF/year in the competitive sector
- 200.000 HUF/year in the public sector
- Reduced marginal amounts for sub-accounts:
- accommodation pocket: 225 000 HUF/year
- catering pocket: 150 000 HUF/year
- leisure pocket: HUF 75 000/year
- The possibility of interoperability between sub-accounts will remain available until 31.12.2022, according to the government decree published on 24.12.2021. Cardholders may use the funds in each sub-account to pay for a service defined in another sub-account.
- From 1 February 2022 (until 31 May 2022 under current legislation), the balance on all sub-accounts of the SZÉP card (including the balance of any pre-2022 top-ups) will be available for cold food purchases in shops/chain stores that have a point-of-sale contract with the SZÉP provider.
- For the tax year 2022, the limits for sub-accounts under the Income Tax Act must again be taken into account from several contributors, taken together.
New service provider
Edenred, a long-standing player in the market, has introduced a new type of benefit card, the Edenred Ticket Restaurant SZÉP card, from 15 January 2022. Fully compliant with the government decree regulating the acceptance and issuance of SZÉP cards, Edenred's SZÉP card is one of the most popular benefits for employees, in addition to the other providers known so far, and can be used at a reduced rate. The card can be applied for and activated online and other administrative functions are also available through this channel.
Tax-free benefits
Private use of a company bicycle
From 1 January 2022, the scope of tax-free benefits in kind will be extended to include the private use of bicycles provided by the payer, which are powered solely by human power or assisted by an electric motor of up to 300 W. This tax-free benefit is therefore not applicable to, for example, scooters, electric scooters or other two-wheeled means of transport.
The benefit may be provided through the use of a bicycle owned, rented, leased or otherwise made available to the employee, or through a public transport service based on bike sharing, if the bicycle is rented from the service provider on the basis of a certified invoice in the name of the payer.
As with the use of a car for private purposes, if the individual rents a bicycle and the rental fee is reimbursed by the payer, the individual is not being provided with the use of the bicycle but with a subsidy to use the service, and therefore this benefit is no longer tax exempt. The bicycle cannot become the property of the employee.
The allowance can be given in unlimited amounts. For TAO purposes, the purchase of bicycles used by employees by the company and expenditure on the use and operation of the company's bicycle fleet are considered expenses.
Home office/telework allowance
The reimbursement of teleworking expenses has been included in the Social Insurance Contributions Act, so it can be provided to employees as a tax-free benefit, regardless of the emergency situation, under the conditions of the Labour Code provisions on teleworking, up to the amount of the minimum wage per working day.
From January, teleworkers can receive up to HUF 20,000 per month to cover the costs related to the performance of their duties (overheads, internet, insurance, etc.) Employers currently have several options to support the purchase of equipment and to reimburse teleworkers without any obligation to account.
Reimbursement of expenses against invoice was previously allowed under the provisions of the Income Tax Act.
Reimbursements can be made in parallel. Although internet and overhead costs can only be reimbursed tax-free on a pro-rata basis against invoice, employers can both subsidise the purchase of equipment and provide tax-free reimbursement up to the minimum wage for their teleworking employees.
Information on the emergency situation
Government Decree No. 705/2021 (15.12.2021) of 15.12.2021, amending Government Decree No. 283/2020 (17.VI.), extended the epidemiological alert until 17.06.2022. Act I of 2021, as amended by Act CXXX of 2021, adopted on 17.12.2022, containing in part the special measures for the emergency situation, remains in force until 31.05.2022.
Tax payment relief
Emergency employment aid for research and development workers will remain in force under current legislation until 30 June 2022.
Payment discounts provided by NAV
The special salary reductions granted by the NAV will continue to be available from 1 December 2021 until 30 June 2022.
Taxpayers have the option to apply for a 6-month deferral or a 12-month instalment facility for up to HUF 5 million tax at no extra charge. In the case of non-natural persons, the taxpayer's tax debt can be reduced up to a maximum of 20%, up to a maximum of HUF 5 million, for a single taxable amount - including tax and contribution liabilities deducted.
- When making the application, you must demonstrate that the payment difficulty is due to the emergency.
- In the case of mitigation, that the payment of the debt would jeopardise the business for reasons attributable to the emergency.
Relief can be claimed for individual VAT and for VAT group and tao group taxpayers. The tax authority can grant the relief on application.
Proof of inability to work
The certificate of incapacity for work form may continue to be issued electronically (e-mail) by the doctor to the patient, who may forward it in the same form to the employer during the emergency.
Different rules for people with reduced working capacity
According to Government Decree 647/2021, if the review of the entitlement to benefits of a person entitled to benefits for persons with reduced capacity for work was due between 5 December 2020 and 9 November 2021, but was not due due to the emergency, the review will be carried out by 9 November 2022. It shall be resumed by 31 August 2022 (on application by the beneficiary or, in the event of deterioration in health or incapacity to work for at least 60 consecutive days, by 9 January 2022). The right to benefits may not be terminated before 31 May 2022.
Vaccination requirements
Decree 598/2021 (28.X.) gives companies, businesses and institutions the right to require employees to be vaccinated against the SARS-CoV-2 coronavirus as a condition of employment, if they consider this necessary for the safety of their workers.
The base rate of the central bank
From 15.12.2021, the base rate of the central bank increased to 2.40%. The change affects, for example, the minimum interest rate for a business loan granted by an employer.
Please note that this information is based on the legislation in force on 10 January 2022.
If you have any questions about the above, please do not hesitate to contact us.
Moore Hungary
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