The most important changes in the taxation rules applicable to Payroll Accounting, for tax year 2022, are summarised below.
Mandatory Minimum Wage applicable to 2022
As of 1 January 2022, the following Minimum Wage applies to full time Employees: HUF 200,000 per month, or HUF 45,980 per week, or HUF 9,200 per day, or HUF 1,150 per hour.
For jobs requiring a secondary school degree or higher, or the equivalent secondary school level vocational training, the Secured Salary Minimum amount applicable to full time Employees is HUF 260,000 per month, or HUF 59,780 per week, or HUF 11,960 per day, or HUF 1,495 per hour.
Based on the above, Employers need to revise the salaries paid to Employees as of 1 January 2022, to meet the minimum amounts indicated above.
The thresholds to be used for calculation, as a result of the Minimum Wage revision, are summarised below:
| Legal title |
2022 |
2021 |
| Rehabilitation Fund Contribution |
HUF 1,800,000 per person, annually |
1,449,000 per person, annually |
| Tax benefit per head, decreasing the Tax Base |
HUF 66,700 per month |
HUF 55,800 per month |
| Minimum Contribution payable |
HUF 60,000 per month |
HUF 48,300 per month |
| Minimum amount payable to Employees under a simplified employment scheme |
HUF 978 per hour |
HUF 819 per hour |
| Minimum amount payable to Employees under a simplified employment scheme, in jobs requiring vocational training |
HUF 1,301 per hour |
HUF 1,095 per hour |
| Total non-taxable amount for simplified employment, per day |
HUF 11,960 per day |
HUF 10,010 per day |
| Total non-taxable amount for simplified employment, for jobs requiring vocational training, per day |
HUF 15,548 per day |
HUF 13,091 per day |
| Maximum salary payable under simplified employment, up to the HUF 1,000 or HUF 500 tax amount |
HUF 18,400 per day, per head |
HUF 14,820 per day, per head |
| Maximum threshold for small value, one-off gifts, provided as a benefit |
HUF 20,000 |
HUF 16,740 |
| Maximum threshold for a non-taxable cost refund for tickets to special sports or cultural events |
HUF 200,000 per year |
HUF 167,400 per year |
| Maximum Social Fund Contribution payment by private individuals |
HUF 4,800,000 |
HUF 4,017,600 |
| Healthcare Services Contribution |
HUF 8,400 per month, HUF 280 per day |
HUF 8,000 per month, HUF 270 per day |
| Maximum Child Support |
Gross HUF 280,000 per month |
Gross HUF 234,360 per month |
| Maximum daily calculation basis for Sick Leave Benefit |
Gross 13,333.33 per calendar day |
Gross 11,160 per calendar day |
| Maximum salary for persons receiving pre-mature age caretaking |
HUF 3,600,000 per year |
HUF 3,013,200 per year |
Employer side tax obligations
Vocational Training Fund Contribution
As of 1 January 2022, the Vocational Training Fund Contribution will cease to exist as a separate tax item, and instead will form part of the Social Fund Contribution payment.
Social Fund Contribution
As of 1 January 2022, the total Social Fund Contribution payable is 13%.
The total tax applicable to non-wage items: 28% (15% PIT, plus 13% Social Fund Contribution). The total tax applicable to certain specific benefits: 33.04% (15% PIT payable on 118% of the benefit’s value, plus 13% Social Fund Contribution).
Tax benefit provided for vocational training and dual training schemes: as the Training Fund Contribution will no longer exist, this benefit can be applied for as a tax benefit granted for Social Fund Contribution payments.
Employers signing an Employment Agreement pursuant to the Act on Vocational Training, with a student, or a person participating in the vocational training program provided by the Employer, or signing a Student Employment Agreement with students, pursuant to the Act on National Higher Education, or a Cooperation Agreement with a higher educational institution, for a basic training course requiring practical training, may apply a tax benefit, as per the law, applicable to the Social Fund Contribution payable.
Small Enterprise Tax
The rate of Small Enterprise Tax (“KIVA”) is reduced from 11% to 10%, as of 1 January 2022. The revenue threshold stays at HUF 3 billion, the maximum threshold for leaving the scheme is unchanged, at HUF 6 billion.
The total tax rate for non-wage benefits is 25% (15% PIT, plus 10% KIVA), and for certain specific benefit items is 27.7% (17.7% PIT, plus 10% KIVA).
“EKHO” tax
The EKHO tax rate for “Disbursers” is reduced from 15.5% to 13%, as of 1 January 2022.
“KATA” tax
As of 1 January 2022, the tax base for social insurance and labour market benefits provided is increased for registered small taxpayers. For full time small taxpayers it will be HUF 108,000 instead of the previously applied HUF 102,000, while for small taxpayers volunteering to pay a higher flat rate tax, it will be HUF 179,000, increased from HUF 170,000.
Business entertainment and business gifts
As of 1 January 2022, the various itemised business entertainment and business gift items, as listed in the PIT Act, will become subject to a Social Fund Contribution payment obligation again.
Tax benefits
Tax free status for youngsters, up to the age of 25
As of 1 January 2022, youngsters below the age of 25 are not subject to a PIT payment obligation.
This nonetheless does not mean an unrestricted tax free status, but rather that private individuals under the age of 25 will be able to enforce a maximum amount of tax base reduction, for certain (wage type) income earned.
The tax base deduction available will be the gross average wage registered in the month of July of the preceding year. This amount was HUF 433,700 in July 2021. This maximum limit is not applicable on the annual income, but pro rata to the actual number of months of eligibility. A youngster is eligible for the benefit for each month, prior to him/her reaching the age of 25.
The tax benefit is automatically enforced, and can be used in the month last time, in which the beneficiary reaches the age of 25. Therefore, only beneficiaries, whom do not wish to enforce the tax benefit, in part or in full, need to issue a relevant declaration.
Youngsters, whom perform work via a student association, are also eligible for the tax benefit.
The various tax benefits available under the law can be enforced in the following priority order:
- tax benefit for mothers with 4 or more children
- tax benefit for youngsters under the age of 25
- a personal tax benefit
- tax benefit for newly married couples
- family tax benefit
Important to note that in case of the tax benefit for married couples (first marriage), if both parties are under the age of 25, the enforcement of the married couple tax benefit has to be postponed to a later stage, accordingly. This means that the married couple can enforce the married couple tax benefit after they reached the age of 25, the first month of the benefit used being the month, in which both of the parties of the couple has reached the age of 25, and thus one of the parties loses the eligibility for the first mentioned benefit.
For marriages entered into prior to 1 January 2022, if the married couple started to enforce the newly married tax benefit prior to 1 January 2022, they need to suspend using the tax benefit during the time period they are also benefiting from the tax benefit applicable to youngsters up to the age of 25.
Tax benefit for mothers raising 4 or more children
As of 1 January 2022, when a mother raising 4 or more children wishes to enforce the applicable tax benefit available, there is no need to issue a new declaration each year, for such purposes, if such declaration was already issued by the relevant private individual, and the benefit is requested with regards to children, for whom the mother’s entitlement to receive a Family Support was valid for a period of 12 years.
“SZÉP” card scheme:
As of 1 January 2022, the relevant provisions of the PIT Act shall apply to the SZÉP card related benefits again.
- The budget available for recreational purposes:
- in the private sector: HUF 450,000 per year
- in the public services sector: HUF 200,000 per year
Alszámlák kedvezményes keretösszegei:
- hotel and accommodation: HUF 225,000 per year
- catering: HUF 150,000 per year
- leisure time activities: HUF 75,000 per year
- Pursuant to the relevant Government Decree issued on 24 December 2021, the transferability between the various sub-accounts shall remain to be applicable up till 31 December 2022. Card holders will be able to use the amount being on their sub-accounts to pay for services listed in another sub-account.
- As of 1 February 2022 (and pursuant to the currently valid laws, until 31 May 2022), the balance on all SZÉP card sub-accounts (inclusive of the remaining amount of top-ups made prior to year 2022) can also be used by the card holders to buy cold food items in certain retail outlets/chains, which have signed a relevant agreement to accept SZÉP cards, with the SZÉP card issuer.
- For the 2022 tax year, pursuant to the PIT Act, the method will be used again that the budget amounts for each sub-account will need to be calculated, as an aggregate of the amount provided by the various benefit providers.
A new service provider
The service provider named “Edenred”, already known on the market, introduced a new SZÉP card type benefit card as of 15 January 2022, named “Edenred Ticket Restaurant”. The named card fully complies with the relevant Government Decree regulating how to accept and issue SZÉP cards, therefore the Edenred SZÉP card can now also be provided to the Employees, as part of the most popular cafeteria scheme, being subject to preferential tax treatment, in addition to the other known service providers. The named card can be applied for and activated in an online manner, and all related administrative functions are also available online.
Tax-free benefits
Company owned bicycles for private use
As of 1 January 2022, a new item will be added to the list of tax-free benefit-in-kind items, provided to the Employees, namely the private use of - manually run or supported with an electric engine with up to 300 W capacity - bicycles. This particular type of tax-free benefit therefore cannot be applied to scooters, electric scooters, or other two-wheel vehicles.
This type of benefit can be provided to the Employees in the form of bicycles owned, rented or leased by the Company, or available to the Company under any other scheme, for the purposes of private use, or even via the bicycle co-share community schemes, if the bicycle is rented from the service provider, and documented by an underlying invoice, stating the Company’s name (as the Disburser).
Similar to company car use for private purposes, provided as an Employee benefit, if the bicycle is rented by the private individual directly, and the fee is recharged to the Disburser, this case qualifies as not a bicycle use provided by the Company to the private individual, but rather, as a benefit granted to the private individual to use the named services, therefore this benefit is not deemed to be a tax-free benefit. The bicycle provided shall not become the property of the Employee.
This type of benefit can be provided up to no value limitation. For the purposes of “TAO” calculation, the purchase of the bicycles provided to the Employees for private use, and all expenses related to the use and operations of the Company managed bicycle fleet qualify as costs.
Home office related cost reimbursement
The home office related cost reimbursement is now part of the PIT Act, therefore, it can be provided as a tax-free benefit to the Employees, regardless of the pandemic situation, under the terms and conditions set forth by the Labour Code, stated in the relevant, remote work section, up to the amount of the Minimum Wage, pro rata to the total number of business days.
As a result, Employees working in a home office may get up to HUF 20,000 per month to cover their related costs (utility fees, internet, insurance fees, etc.) from January 2022 onward. The Employers have several different options to support the Employees in acquiring the needed equipment, and to provide the cost reimbursement to the Employees working from a home office, without a need for detailed underlying documentation.
A cost reimbursement based on the underlying invoices was already available for Companies, under the PIT Act.
The related cost reimbursements can be provided even simultaneously. Although the Company may only provide a cost reimbursement for the internet and utility fees, based on an underlying invoice presented, on a pro rata basis of the costs incurred, the Company may provide support to the acquisition of the equipment, and at the same time, provide a tax-free cost reimbursement to the Employees working from a home office, up to the amount of the Minimum Wage.
Pandemic related information
The Government Decree No. 705/2021. (XII. 15.), issued on 15 December 2021, amending the previous Government Decree No. 283/2020. (VI. 17.) has extended the pandemic situation, and the related emergency measures, until the date of 17 June 2022. Act CXXX of 2021, published on 17 December 2021, amending the previous Act I of 2021 on Certain special measures applied during the pandemic situation, shall remain to be in force until 31 May 2022.
More beneficial taxation
The benefit provided for the employment of Employees performing R&D activities during the emergency situation, will remain to be in force until 30 June 2022, pursuant to the current laws.
Tax payment easement, available by the Tax Authority
The extraordinary tax payment easement schemes, that can be provided by the Tax Authority, are available for the taxpayers on-going, in the time period of 1 December 2021 to 30 June 2022.
The taxpayers have the chance to request the Tax Authority to grant a suspension of the tax payment, on one occasion, without a late payment penalty charged, for up to 6 months, or allow an instalment payment scheme for 12 months, for a maximum tax payment of HUF 5 million. For business entities, the Tax Authority may be requested to reduce the tax debt with max. 20% (or max. HUF 5 million) for a particular tax type - even for tax and contribution payment obligations, applied in the form of tax withholding.
- When a related application is submitted to the Tax Authority, the taxpayer needs to certify that the payment difficulty arose due to the pandemic situation.
- When a tax debt reduction is requested, the taxpayer needs to certify that full payment of the tax debt would endanger the operations of the company, due to reasons related to the pandemic situation.
A tax payment easement may be requested with regards to the PIT obligation of private individuals, and for taxpayers under a VAT payment and TAO payment obligation. The tax payment easement may be granted by the Tax Authority based on a relevant application submitted by the taxpayer.
Providing evidence on being rendered incapacitated
The standard data form, evidencing a person being incapacitated can be issued by the medical practitioners for the patients in an electronic form (via e-mail) in the future as well, and the patient can then forward it to the Employer during the pandemic situation, in the same manner.
Special rules applicable to Employees with a reduced capacity to work
Pursuant to Government Decree No. 647/2021, if a periodical review of the health status of a person with a reduced capacity to work, and the related assessment of remaining eligible for the benefits, would have been due in the time period between 5 December 2020 to 9 November 2021, however, this could not be performed due to the pandemic situation, the needed review shall be performed up until 31 August 2022 (or up until 9 January 2022, when requested so by the given individual, or if his/her health status deteriorated, or if the person has become incapacitated for a consecutive time period over 60 days). The eligibility for all persons involved shall not be terminated up until 31 May 2022.
Obligation to get vaccinated
Pursuant to Government Decree No. 598/2021. (X. 28.), all companies, enterprises and institutions have the right to set as a pre-condition for employment, for their own Employees, to get the SARS-CoV-2 Corona virus vaccination, when this is deemed to be necessary, to ensure the Employees’ safety.
The National Bank prime rate
The National Bank’s prime rate has been increased to 2.40%, as of 15 December 2021. This change has an impact e.g. on the minimum interest rate to be charged for Employer granted loans.
Please note that this information summary was drafted based on the laws in effect as of 10 January 2022.
If you have any questions related to the above, please do not hesitate to contact us.