2019 non-wage benefits in Hungary

From 1 January 2019, non-wage benefit with reduced taxation can mainly be provided in the three “pockets” of SZÉP card. (Regulations regarding trade union recreation services and in-kind benefits provided by trade unions remain the same as previously.)

• The option of providing a maximum of HUF 100 thousand in cash with reduced tax has been terminated.
• The tax base adjustment item of 1.18 is no longer applicable to cafeteria elements.

A limited group of benefits provided to employees or by disbursers remain available as defined benefits, such as: private use of company phones, meals or other services on business trips, business entertainment and gifts or other benefits related to business/entertainment events and provided to several people, gifts of small value (once a year).

• Products and services provided by the employer based on an internal regulation (available to all employees) or applied equally to all employees, or insurance for an individual cannot be taxed as certain defined benefits from 2019. The preferential taxation of benefits provided as certain defined benefits (e.g. employer’s contribution to voluntary mutual insurance fund, local transport pass, school start up subsidy, etc.) has been terminated.
• Tax-exemption of certain benefits is cancelled from 2019, such as:

– (non-repayable) housing subsidy provided by employers,

– housing subsidy to promote mobility,

– employer’s aid provided for the employee’s student loan repayment,

– risk insurance premiums (up to 30% of the minimum wage, see transitional rules).

• Tax exemption of child care services provided for free or at a reduced rate does not change. In order to reduce administrative burdens of the employers, this benefit is tax-exempt even if the employer compensates the price of the service/care based on an invoice issued to the employee’s name.
• Tax-exemption of tickets or seasonal tickets for cultural and sports events as certain benefits is modified from 2019. Only non-redeemable tickets and tickets not provided in the form of vouchers could be exempted if the value of each not exceeding HUF 50 thousand per year.