Employer Tax Contributions

Tax Type	Rate	Base
Social Contribution Tax (SZOCHO)	13%	Gross wages
Local Business Tax (LBT)	0%-2%	Varies by municipality (e.g., Budapest is 2%)
Rehabilitation Contribution	HUF 2,617,200/year/person	Based on mandatory employment ratio of disabled persons (if criteria met)

Note: Vocational training contribution is incorporated into the Social Contribution Tax since January .

Filing & Compliance

• Employers must pay social security payments and file monthly social security declarations electronically.
• The deadline for payment and submission of income tax and social security contributions is the 12th day of the month following the payment period.
• Employers must issue annual income tax and social contributions certificates to employees by January 31.

In Hungary, employers are responsible for deducting various taxes from employee salaries, including personal income tax and social security contributions.

Personal Income Tax (PIT)

The standard PIT rate in Hungary is 15% of the employee's taxable income. The taxable income is calculated by subtracting certain deductions and allowances from the gross salary. Tax advances are deducted monthly by the employer and paid to the tax authorities by the 12th of the following month. Annual tax returns are due by May 20th of the following year, with a possible extension to November 20th.

• Tax Benefits for Young Employees: Employees under 25 are eligible for a tax benefit, exempting a portion of their income from PIT. This exemption currently amounts to a monthly tax saving of HUF 98,518. However please note that, as of January 1, 2025, this tax benefit is no longer available to third-country nationals, excluding Serbian and Ukrainian citizens.

• Tax Allowance for Mothers with Four or More Children: Mothers with at least four children (or who have been entitled to family allowance for 12 years) are fully exempt from PIT.

• First Marriage Tax Benefit: Newly married couples, where at least one spouse is marrying for the first time, receive a monthly tax benefit of HUF 33,335 for 24 months, resulting in a tax saving of HUF 5,000 per month. Note that, this benefit is not available to third-country nationals since January 1, 2025. This exclusion does not apply to Serbian and Ukrainian citizens.

• Family Tax Benefit: This benefit reduces the tax base depending on the number of dependent children. As of today (February 5, 2025), the reductions are as follows:

  • One child: HUF 66,670
  • Two children: HUF 133,330 per child
  • Three or more children: HUF 220,000 per child.

  However, starting July 1, 2025, these amounts are scheduled to increase, and then increase again on January 1, 2026. Please be aware that the family tax benefit is not applicable to third-country nationals (except Serbian and Ukrainian citizens) since January 1, 2025.

Social Security Contributions

Both employers and employees contribute to social security. The employer pays a social tax of 13% of the employee's gross salary, while the employee contributes 18.5%. A portion of the unused child tax base allowance (15%) can be deducted from the employee's contribution.

Other Taxes and Benefits

• Minimum Wage: The minimum wage is HUF 290,800 per month as of 2025. The guaranteed minimum wage for those with secondary level or vocational training is HUF 348,000 per month.
• SZÉP Card “Active Hungarians” Pocket: A new benefit allows employers to contribute up to HUF 10,000 monthly (HUF 120,000 annually) to an employee's SZÉP card for active lifestyle-related services. This contribution is considered a fringe benefit. Amounts above this limit will be regarded as a specific allowance.
• Short-Term Assignments: Special considerations may apply to short-term assignments of foreign executives, regarding tax residency, income sourcing, and other regulations. It's crucial to consult with tax professionals for such cases.

It is important to note that this information is current as of February 5, 2025, and may be subject to changes due to legislative updates or future adjustments. Consulting with a tax advisor is highly recommended for the most accurate and up-to-date information.