The Széchenyi Pension Card (hereinafter: SZÉP card) has been in existence since 2011, and its taxation and usage possibilities will again be modified in several points by the emergency measures of 2023. Since 01.01.2023, the card has a sub-account, the balance of which can be used for all the previously known areas of use (accommodation, catering and leisure).
The rules on taxation and use of the SZÉP card are set out in Act CXVII of 1995 on Personal Income Tax (hereinafter: the Personal Income Tax Act) and in Government Decree No.76/2018 (IV. 20.) on the rules for the issuance and use of the Széchenyi Pihenő Karten (Széchenyi Pihenő Karten).
Government Decree 237/2023 (19.VI.) From 1 August 2023 to 31 December 2023 provides the possibility to use the amount on the SZÉP card use for cold foodprice, as well as the 200.000 HUF allowance in addition to the recreational allowance gives employers the opportunity to provide for their employees in a preferential tax framework.
(https://nav.gov.hu/ado/szja/A_SZEP-kartya-juttatas_kedvezo_valtozasai)
Cold food shopping
From 1 August 2023 until 31 December 2023, the balance of the Széchenyi Holiday Card can be used to buy cold food in shops/chain stores that have an acceptance point contract with the SZÉP provider.
- Not only the amounts transferred after 1 August, but also the balance accumulated previously can be used to buy cold food.
- The range of products available for purchase is the same as in 2022.
(e.g.: live animals and animal products - meat and meat products -, dairy products, vegetable products - vegetables, fruit -, coffee and tea, products made from cereals and other grains, fats and oils and their derivatives, food preparations, salt, etc.) - Chemical goods, alcohol and tobacco products can still not be paid for with the SZÉP card.
- As merchants, grocery shops, fruit and vegetable shops, meat shops, bakeries, other food retailers and food retailers can conclude a point-of-sale contract with the SZÉP provider. (Known chains that definitely accept SZÉP cards: ALDI, AUCHAN, CBA, COOP, Family Frost, G-ROBY, LIDL, PENNY, REAL, SPAR.)
HUF 200 000 allowance for Széchenyi Recreation Card in addition to the annual recreation allowance
At the same time, Government Decree No 237/2023 (19.VI.) extends the fringe benefitsreasons:
- A employer by the for an employee from 1 August 2023 until 31 December 2023 transferred to the Széchenyi Recreation Card account in addition to the annual recreation budget, regardless of an allowance of up to HUF 200 000 can be provided as fringe benefits with reduced tax rates.
- Conditions:
- According to the NAV information, the transfer can be made in one sum or in several instalments, but the total value of the transfers must not exceed HUF 200 000.
- The additional allowance does not need to be calculated in proportion to the employment relationship. Even for a one-day contract, the full amount of HUF 200 000 can be transferred at a reduced rate.
- The limit of HUF 200 000 should be interpreted on a payer-by-payer basis, i.e. if the employee has more than one employer or starts a new employment relationship in the given period, he or she can receive the full HUF 200 000 from all employers.
Why can we effectively support our employees with this opportunity?
The fact that the balance of the SZÉP card can be used for cold food purchases enhances the usefulness of the benefit in everyday life, as it can be used not only for catering, accommodation or other leisure activities, but also as a benefit to support everyday living.
Given the tax rules below, the net benefit that can be provided to an employee at a given wage cost is significantly higher than if they were to receive a wage subsidy.
- If we plan to spend 200 000 HUF for each employee, then
- 117.699 HUF net as a wage-related benefit,
- in contrast, they can get a net amount of HUF 156.250 for SZÉP cards.
- If we want to allocate a net amount of HUF 200 000 to each employee, we would
- 339.850 HUF as a fringe benefit,
- would cost 256.000 HUF as a benefit transferred to a SZÉP card.
As the current legislation allows the use of cold food purchases only until 31.12.2023, it is recommended to time the transfer so that employees can still benefit from this discount after the amount has been credited to their account.
How can the HUF 200 000 over and above the recreational budget be secured?
The employer may decide to transfer a larger one-off amount (HUF 0-200 000) to the employee's SZÉP account, without taking into account other fringe benefits.
- The eligibility criteria can be defined in the same way as for other fringe benefits (probationary period, notice period, part-time work, job title, etc.), taking into account the principle of equal treatment.
Incorporate the possibility to claim this benefit into your existing fringe benefit scheme.
- Employees who did not previously have a SZÉP card can change their minds and still apply for a SZÉP card for the remaining benefit entitlement for the year.
- Employers who provide a large allowance can review the tax treatment of claims and ensure that their employees can use the extra allowance to claim a higher net payout by paying a reduced tax rate.
SZÉP card public charges
Tax-relieved benefits that qualify as fringe benefits in 2023:
- In addition to the annual recreational budget, and independently of the an allowance of up to HUF 200 000.
- Recreational budget - no change compared to 01.01.2023:
450 000 HUF/year transferred to the Széchenyi Pension Card restricted payment account (from several providers together, in proportion to the number of days worked).
According to Government Decree 593/2022, from 1 January 2023, SZÉP card pockets have been merged for tax purposes, so there is no need to monitor „pocket” limits, and the individual sub-accounts and their usage limits have been abolished.- In the case of the recreational allowance, the amount of the fringe benefit is calculated in proportion to the number of calendar days worked.
- Employees who have been employed by the employer for a full year (subject to the eligibility criteria set out in the internal rules) may be entitled to a maximum of HUF 450 000 per year in reduced recreational allowances.
- Employees who have been employed for 200 calendar days in 2023 may be entitled to a maximum of HUF 450 000/365 days*200 days = HUF 246 575 in reduced recreational allowance in respect of their employment.
- Under the Social Insurance Contributions Act, an employee's allocations to the Széchenyi Pension Card sub-accounts from several employers in the tax year must be taken into account together, i.e. if the employee works for several employers in the tax year, it must be taken into account that the amounts transferred by each employer are added together and this must be examined for tax purposes.
- Continuing the example above, if the employee has already received a HUF 250 000 benefit on his/her SZÉP card from his/her previous employer, he/she can receive a maximum of HUF 450 000 - HUF 250 000 = HUF 200 000 in reduced recreational allowance with reduced tax.
- When considering the double condition, the lower of the two is always the determining factor for the amount of the benefit that can be given to the employee at a reduced rate.
- Tax payable on fringe benefits:
- 15% personal income tax + 13% social contribution tax
Supplementary amount - certain defined allowances
In the year 2023, the taxation of the recreation allowance + certain defined benefits above HUF 200 000 is as follows:
- net amount paid*1,18 tax base increased by 15% personal income tax + 13 % social contribution tax
- for a net payment of HUF 20 000: HUF 20 000+(HUF 20 000*1,18*28%) = HUF 26 608.
If you have any questions about the above, please do not hesitate to contact us.
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