Fringe benefits
In case of the fringe benefits, we are talking about reduced taxation, as this results in a tax liability of “only” 28% (15% personal income tax + 13% social security contribution) for the employer.
One of the most well-known fringe benefit is SZÉP-Card. The annual budget of the SZÉP-card under reduced taxation is 450 000 forint.
The benefit expanded with a new pocket on 2025.01.01, named „Aktív Magyarok”. The annual budget of the new pocket with reduced taxation is 120 000 Forint, but the budget is subject to conditions.
The benefit can be transferred in 2 installments, maximum 60 000 Forints semiannually. The second installment, and the further ones can be transferred if the employee have spent at least 80% of the recieved amount from the previous period, and made a statement. Based on the regulations this new pocket can be used only for activity connecting to sport activities such as renting sports equipments.
Other than SZÉP-Card and its new pocket a new opportunity has introduced. The employer can support the housing of the employees under 35. This form of benefits can be used to pay the rental fee of a flat/house, or to the repayment of the housing loan. The annual budget of the benefit is 1 800 000 Forint, it means 150 000 Forint per month. It is important that the sum needs to be prorated if the employer will be 35 years old in this year (2025) or if the employment relationship begins during the year.
Certain defined benefits
The benefit provided on the Széchenyi Recreation Card can be granted to the employer with favorable taxation up to the annual limit. In case the employer pays more than the annual limit (450,000 Forints), the amount exceeding the limit is treated as certain defined benefits, which creates a 33.04% tax liability for the employer.
In case the employer is satisfied with the work of their employee and would like to give them a present, the employer has the opportunity to do so, however, these benefits would be treated as certain defined benefits. The simplest example is a small-value gift. If the employer wishes to present a small-value gift to the employee, it can be given up to three times a year, and the value of each gift cannot exceed 10% of the minimum wage, which is roughly 29,080 Forints per occasion
Catering is also including to this group, as if the employer invites either business partners or employees to lunch, the restaurant expenses are also subject to the taxation rules applicable to certain defined benefits. This also covers meals related to official or business travel.
In several cases, the employee’s work requires a company mobile phone. Since it is often not guaranteed that the employee uses the phone solely for work-related purposes, the employer needs to pay 33.04% tax on the presumed private use of the phone.
The amounts paid into various pension funds and health funds, as well as various promotional and business policy gifts, such as discounts given to private individuals, product samples, and refunds, are also treated as certain defined benefits.
Most companies, from time to time, organize celebrations for their employees for example, a Christmas party or an event to celebrate the completion of a project.
If the company provides the venue and catering for the guests (employees and partners), all costs related to the celebration such as room rental, music services, and catering can be treated as certain defined benefits.
What other forms of support can an employer provide to their employees?
Sometimes an employee may require a salary advance, in which case they may request it from the employer. Providing a salary advance is not an obligation for the employer, but employees may request an advance of up to five times the minimum wage (which is 1,454,000 Forints in 2025). It is important to note that the employee must repay this amount to the employer within six months. The employee will receive the salary advance in gross amount, and this will be deducted from the employee’s net salary based on the agreement between the parties.
Some types of jobs require employees to travel frequently, while in other cases, employees go on business trips only a few times a year.
A business trip is a travel assignment mandated by the employer to carry out tasks connected to the employer’s operations, with reimbursable expenses and entitlement to a per diem. The use of a private vehicle can also be accounted for during official travel with a business trip order. The employer may reimburse an amount based on the kilometers indicated in the business trip order, calculated using the fuel consumption norm and up to the fuel price published by the national tax authority, plus a general passenger car cost allowance of 15 HUF per kilometer. This amount can be reimbursed without receipts and tax-free, but strictly only if the business trip order has been properly completed.
The business trip order must include the date, the distance traveled in kilometers, the destination, the vehicle details, as well as the details and signatures of both the issuer and the employee.
A per diem is an expense to which the employee is entitled during a business trip; however, its amount is determined by the employer. For domestic business trips, the per diem is at least 500 HUF per day.
A perdiem is not accountable if the duration of the absence is no longer than 6 hours, and if the employer compensates the employee in another way (based on a meal invoice issued to the company.) The sum of the perdiem is defined as income from employment, therefore it is not tax-free.
Foreign per diem is also considered a cost reimbursement related to employment, which can be accounted for without the need for expense documentation. The reimbursable cost is the daily amount calculated as 30% of the daily income, but not exceeding the equivalent of 15 euros in forints. Therefore, in the case of a daily per diem of 50 euros, 30% of that amount, up to a maximum of 15 euros, can be accounted for as a cost without receipts. Personal income tax and social contributions must be withheld from the amount exceeding the threshold, and the payer is subject to a social contribution tax obligation. Any costs related to work performed during the business trip, in addition to the per diem, can be reimbursed. Accommodation and travel expenses can be accounted for tax-free based on appropriate invoices, according to Section 7, point q) of the Personal Income Tax Act.
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