EY Payroll Newsletter

Important changes in payroll, social security, and labor law.  

Changes in the minimum wage and guaranteed minimum wage 
(the Hungarian Gazette, Magyar Közlöny, issue No. 127)

Pursuant to Government Decree 394/2024 (XII.12.), the minimum basic wages have changed as follows from 1 January 2025:

The mandatory minimum basic wage (minimum wage) established for a full-time employee is:

• HUF 290,800 gross if calculated on a monthly basis
• HUF 66,860 gross if calculated on a weekly basis
• HUF 13,380 gross if calculated on a daily basis
• HUF 1,672 gross if calculated on an hourly basis

The guaranteed minimum wage established as the basic wage for a full-time employee in a job requiring at least secondary education or secondary vocational training is: 

• HUF 348,800 gross if calculated on a monthly basis
• HUF 80,190 gross if calculated on a weekly basis
• HUF 16,040 gross if calculated on a daily basis
• HUF 2,005 gross if calculated on an hourly basis

For performance related pay, if the performance requirements are fully met and the work is full-time, the full-time employee’s mandatory minimum monthly salary is (pure performance wage, or a combination of guaranteed wage and performance-related variable pay):

• HUF 290,800 gross in the case of minimum wage
• HUF 348,800 gross in the case of guaranteed minimum wage

For part-time work, the monthly, weekly and daily rates have to be reduced in proportion to the different working hours.

For employed individuals, the minimum contribution payment liability (30% of the minimum wage) is HUF 87,240 per month.

Impact on simplified contribution to public revenues (EKHO): the part subject to standard tax liability is HUF 290,800 gross a month from January based on the new minimum wage. However, the upper limit of eligibility to apply the simplified contribution is not affected. The tax liability on simplified employment will change with the increase in the minimum wage as follows:

• Seasonal agricultural and tourist work – HUF 1,500 a day
• Casual work – HUF 2,900 a day
• Film industry extras – HUF 8,700 a day

The minimum salary to be paid for simplified employment will be:

• At least 85% of the mandatory minimum wage: HUF 1,421 an hour
• 87% in the case of guaranteed minimum wage: HUF 1,744 an hour

The exempted amount with simplified employment is HUF 17,394 per day for jobs requiring no vocational qualifications, and HUF 20,852 per day for jobs requiring secondary education or vocational qualification.

(Note: The taxes on simplified employment will increase from 1 February 2025. We explain this later in the newsletter.)

Rehabilitation contribution from 1 January 2025: the rehabilitation contribution rate is nine times the mandatory minimum basic wage established on the first day of the current year, i.e. HUF 290,800 x 9 = HUF 2,617,200 per person per year.

Personal allowance tax base rate: one-third of the minimum wage per month of eligibility, rounded to one hundred HUF, which is HUF 96,900 a month from 1 January 2025 (this means a tax saving of HUF 14,535 for the individual).

Changes in the amount of health insurance cash benefits with the increase in the minimum wage from 1 January 2025:

• Childcare benefit maximum (70% of twice the minimum wage): gross 407,120 HUF per month
• The amount of childcare benefit for students enrolled in bachelor's level higher education, advanced vocational programs, higher education degree programs or postgraduate specialization programs is 70% of the minimum wage; that is, HUF 203,560 gross per month, one thirtieth of which is HUF 6,785.3 per calendar day.
• The childcare benefit for students enrolled in master's, undivided or doctoral programs is 70% of the guaranteed wage minimum, i.e. HUF 244,160 gross per month, one thirtieth of which is HUF 8,138.66 per calendar day.
•  The upper limit of the adoption allowance is equal to the maximum amount of the childcare benefit: HUF 407,120 gross per month.
• Maximum sick pay amount: the daily sick pay amount may not exceed one-thirtieth of twice the minimum wage, which is HUF 19,386.66 per calendar day.

As a result of the minimum wage increase, the amount of available funds will increase for a number of benefits:

• Telework contribution (up to 10% of the minimum wage is tax free) – HUF 29,080 per month
• Admission to sporting events is tax exempt up to HUF 290,800 per year
• Entrance fee for cultural services is tax exempt up to HUF 290,800 per year
• Zoo entry is tax free up to HUF 290,800 per year
• Gifts of small value taxed as specific benefits (3 x HUF 29,080 per occasion annually)

Gross national average wage

The Hungarian Central Statistical Office published the following earnings data for July 2024:

Average gross monthly salary in July 2024: HUF 656,785 per person per month

This is relevant for employers due to the allowance for young people under the age of 25 and for mothers under 30, and also because the wages of these groups are exempt from personal income tax up to HUF 656,785 which means total personal income tax savings of HUF 98,518 per month.

Changes related to benefits

• Government Decree No 384/2024 (XII.9.) amending Government Decree No 76/2018 (IV.20.) on the rules for issuing and using Széchenyi Cards

Széchenyi cards are to be issued by payment service providers as payment instruments in plastic form that can be digitized on communication devices which

a) allow the cardholder to place payment orders only from the Széchenyi card balances credited to the limited-purpose payment account,

b) are readable by electronic payment terminals and are capable of placing payment orders.

This decree will enter into force on 1 September 2025.

• Government Decree No. 449/2024 (XII.23.) amending Government Decree No. 76/2018 (IV.20.) on the rules for issuing and using Széchenyi Recreational Cards

The law provides that amounts that can be utilized from the Active Hungarians sub-account have to be registered in a separate sub-account and can only be used to pay for the service corresponding to the account.

The payer may transfer a maximum amount of HUF 60,000 per half calendar year to the employee’s Active Hungarians sub-account. A further condition for receiving the semi-annual benefit is that the employee must declare to their employer that they have already spent 80% of the amount transferred to the Active Hungarians sub-account in the previous half calendar year within the meaning of Section 71 (1a) of the Personal Income Tax Act. The tax rate is 28% up to the total amount, above which balances are taxed at 33.04% as certain defined benefits.

A close relative with a partner card has the same rights over the funds transferred as Széchenyi card benefits as the employee does, with the exception of the Active Hungarians sub-account.

Section 5(1b) has been added to Government Decree 76/2018 (IV.20), according to which the total amount of the Active Hungarians budget may only be used at service providers with the following fields of activity:

1.  Passenger transport by cableway, ski lift (TEÁOR'25 34.49., except for freight transport by cableway)

2. Rental of leisure and sports equipment (TEÁOR’25 77.21.)

3. Sport and leisure training (TEÁOR’25 85.51.)

4. Operation of sports facilities (from TEÁOR'25 93.11 rental of sports grounds, sale of swimming pool tickets and season tickets)

5. Sports club activities (TEÁOR’25 93.12.)

6. Physical training service (TEÁOR’25 93.13.)

7. Sporting activities n.e.c. (TEÁOR’25 93.19.)

8. Other entertainment and leisure activities n.e.c. (from TEÁOR'25 93.29 rental of leisure and entertainment equipment as an integral part of recreational facilities, operation of airsoft and paintball courts and operation of picnic areas).

This decree is effective from 1 January 2025.

• Széchenyi Card usage for home renovation purposes

In the last newsletter of 2024, we reported on several new uses of the SZÉP card, including the fact that SZÉP card balances can also be used for home renovation purposes as follows: up to 50% of the total value of amounts registered on the SZÉP card account on 1 January 2025 and of any amounts transferred to the account during 2025.

Government Decree No. 390/2024 (XII.11.) clarified the scope of use as outlined below:

1. Retail sale of hardware, building materials, paints and glass (TEÁOR'25 47.52., excluding retail sale of saunas, swimming pools and massage pools)

2. Retail sale of furniture, lighting equipment, dishes, cutlery and other household goods (from TEÁOR'25 47.55 sale of furniture and lighting equipment)

3. Mixed retail sale of industrial goods (TEÁOR'25 12.47., except clothing, cosmetics, jewelry, toys, sporting goods)

4. Retail sale of carpets, wall and floor coverings (from TEÁOR'25 47.53, the retail sale of wall and floor coverings)

This decree is effective from 1 January 2025.

• Housing support

Government Decree No. 403/2024 (XII.18.) provides for the detailed rules for housing support. An employee may request housing support from their employer by specifically indicating the housing purpose, as defined in this Decree (purposes include paying rent or repaying a home loan).

In our end-of-year newsletter for 2024, we wrote about the fact that employees under the age of 35 can receive housing support. Pursuant to Section 71 (8b) of the Personal Income Tax Act, for the purposes of Paragraph (7)(c), the housing budget will be

a) HUF 1.8 million if the employment persists during the whole year

b) the amount of HUF 1.8 million proportional to the number days spent by the employee at the given employer in the tax year on which the benefit is based, if the employment relationship exists for only part of the year

c) one-twelfth of HUF 1.8 million as many times as the number of months the employee is still under 35 years of age, with the last month to be taken into account being the month in which the employee reaches the age of 35

d) HUF 1.8 million per year if the employment relationship is terminated due to the death of the individual.

The tax rate is 28% up to the total amount, above which it is taxed at 33.04% as certain defined benefits.

In order to prove the housing purpose, the employee should present the rental agreement to their employer or the mortgage or loan agreement concluded and in force, and they should inform the employer of the account number to which they expect to receive the employer's support.

The employee has to provide the employer with a document on any changes to the contracts within five working days of becoming aware of such changes.

The employer's support under this Decree can be paid only by means of transfer order or collection order based on a letter of authorization.

This Decree is effective from 1 January 2025.

Changes related to the rules on wage garnishment

Amendment of Act LIII of 1994 on Judicial Enforcement

According to Section 61, the part of the monthly salary which does not exceed 60% of the net amount of the minimum wage is exempt from garnishment. This exemption does not apply in the case of withholding for child support and childbirth-related costs. Up to now, the single amount of 60,000 HUF was specified.

This new provision will also apply to ongoing cases and will enter into force on 1 July 2025.

The following new item is included under benefits exempt from garnishment:

Under Section 74,  

l) the net amount of family tax allowance under the Personal Income Tax Act is exempt from garnishment.

Section 74 (l) will apply from 1 July 2025 and will only be applicable to cases initiated after its entry into force. 

Changes affecting social security

• From 1 January 2025, the amount of health service contribution will increase to HUF 11,800 per month, or HUF 390 per day.
• Amendment of Act LXXXIII of 1997 on Compulsory Health Insurance Benefits

Changes to the eligibility criteria for infant care benefits:

Section 40 (1) will be replaced by the following provision:

(1) A woman who has been insured for 365 days within the two years preceding the birth of her child and whose child is born:

a) during the term of insurance or within forty-two days of the termination of insurance or commencement of its suspension, or

b) after forty-two days following the termination of insurance or the commencement of its suspension during the period of accident-related sick pay disbursement or within twenty-eight days of the termination of disbursement.

Thus, in light of the change, a mother may be entitled to infant care benefit not only in the case of a child born after forty-two days of the termination of insurance, but also within forty-two days of the start of the suspension.

Relief applicable to infant care benefits

Section 21 (1) The following provision will replace Section 42 (4b) of Act LXXXIII of 1997 on Compulsory Health Insurance Benefits:

(4b) Section (4a) will apply if, on the date on which entitlement commences, the insured person is covered by the same – under Section 48/A (2), continuous – insurance relationship as the one from which the infant care benefit was determined in respect of the previous child.

The amendment clarified that only the infant care benefit granted with respect to a previous child at the same employer and under the same insurance relationship can be compared with the infant care benefit determined in respect of the child born most recently. It is a new element that this comparison can be made if the same insurance relationship with the same employer continuously exists in line with Section 48/A (2) (i.e. there is no interruption of more than 30 days).

Infant care benefits increase with the changes in the minimum wage, if the applicant is also entitled to childcare benefit for students:

The following paragraph (9) will be added to Section 42 of Act LXXXIII of 1997 on Compulsory Health Insurance Benefits:

(9) The amount of the infant care benefit set at the amount referred to in paragraph (4c) will be reviewed ex officio within 15 days of the date of the minimum wage increase or the guaranteed minimum wage increase and, taking into account the increased minimum wage or guaranteed minimum wage, will be reassessed retroactively to the date of the increase, unless an earlier date is set by government decree.

Increase in the amount of foster parent childcare benefit in case of a change in the minimum wage:

The following paragraph (8) will be added to Section 42/F of Act LXXXIII of 1997 on Compulsory Health Insurance Benefits:

(8) The amount of the childcare benefit determined based on paragraph (5) will be reviewed ex officio within 15 days of the date of the increase in the minimum wage and, taking into account the increased minimum wage, will be reassessed retroactively to the date of the increase, unless an earlier date is set by government decree.

The provisions entered into force on 1 January 2025.

Entitlement to child nursing sick pay for single parents

The following paragraph (1b) will be added to Section 46 of Act LXXXIII of 1997 on Compulsory Health Insurance Benefits:

(1b) If one parent is considered to be single, the other parent will not be entitled to child nursing sick pay in respect of the same child, except for a parent who qualifies as single in view of their health condition or that of their spouse (partner) based on the provisions of the Government Decree issued for the implementation of this Act.

The provision entered into force on 1 January 2025.

Section 27 (1) of Government Decree No 217/1997 (XII.1.) on the implementation of Act LXXXIII of 1997 on Compulsory Health Insurance Benefits will be replaced by the following provision, and the following paragraph (1a) will be added:

(1) For the assessment of the application for child nursing sick pay, the following individuals are considered single:

a) unmarried or widowed individuals,

b) in the case of divorced parents, the parent who has sole custody of their common child,

c) a parent living separately from his or her spouse, but who are not divorced, with whom the child habitually resides, unless he or she has a partner.

(1a) On the basis of a unanimous declaration by divorced parents exercising joint custody, for the purposes of Section 46 (1) c)-e) of the Act on Compulsory Health Insurance Benefits, from the birth date of a child following their divorce, the parent specified in their declaration will be considered single.

The provision if effective from 1 January 2025.

Changes related to accidents at work

Section 53 (1) (d) is added to Act LXXXIII of 1997. An accident which:

d) occurred during specialized education, or in the case of dual training, during commuting between the residence (accommodation) of the person employed under a vocational training agreement and the place of vocational education supervised by the VET institution

is not considered a work accident.

The provision is effective from 1 January 2025.

Section 45 (6) of Government Decree No 217/1997 (XII.1) will be replaced by the following provision:

6) The government office or social security paying agency will send its decision on recognizing the event as a work accident to the competent government office of the insured person's place of residence within eight days, simultaneously informing it of the bank account number for the disbursement of accident-related sick pay. Within eight days, the government office competent at the place of residence will initiate the reimbursement of the fees paid by the insured person by NEAK, primarily to a bank account.

The following provision will be repealed from paragraph 5: The attending physician will issue a certificate on the care ordered in connection with the work accident, which will be sent to the government office or social security paying agency within five working days of receiving the final decision that establishes that the event was a work accident.

The provision is effective from 1 January 2025.

Repayment and reimbursement obligation

The following paragraphs (2a) and (2b) will be added to Section 66 of Act LXXXIII of 1997:

(2a) The cost of healthcare services utilized without legal basis will be reimbursed by

a) the employer or other bodies subject to reporting obligation, if the unauthorized use of health care services resulted from the failure to report the termination or suspension of insurance status to the health insurance status register, or late or incorrect data reporting,

b) an individual using health care services, if the individual or their legal representative acquires entitlement to free health care services based on a false statement, and it is subsequently established that he or she was not entitled to free healthcare services in Hungary.

(2b) In the case referred to in paragraph (2a), the body or person concerned may be required to reimburse the cost of the health care within five years of the health insurance body becoming aware of the circumstance referred to in paragraph (2a). No reimbursement will be granted if 15 years have elapsed since the provision of the health service concerned.

The provision is effective from 1 January 2025.

Amendment to Act LXXV of 2010 on Simplified Employment

In Section 1 (4), the legislature clarified that a maximum of 120 days can be worked per year within the framework of simplified employment. It is no longer possible to work 120 days only between the given employer and the employee, but a given employee can have a total of 120 days in a year worked in simplified employment, regardless of the employers.

(4) If the worker establishes an employment relationship for

a) seasonal work,

b) casual work, or

c) seasonal and casual work on several occasions, the combined duration of these employment relationships may not exceed 120 days in the calendar year.

(The law so far stated: If an employer and an employee enter into employment relationships several times for (a) seasonal work, or (b) seasonal work and casual work, the combined duration of these employment relationships may not exceed one hundred and twenty days in the calendar year.)

Section 1 (4) is applicable from 1 July 2025, with the limit of 120 calendar days being taken into account for the purpose of calculating the duration of employment in 2025 from 1 July 2025.

Section 11 will be supplemented by paragraphs (8) and (9):

(8) The tax authority will refuse the employer's declaration pursuant to paragraph (1) if the number of days in employment contradicts Section 1 (4). The employer in this case will have to proceed according to Section 8 (4).

(9) For the purpose of examining the conditions of Section 1 (4), prior to entering into a simplified employment relationship, the employer will be entitled to know and process the tax identification number, social security number and name of the natural person. To assist in examining the conditions for Section 1 (4), the National Tax and Customs Authority will provide an electronic query option.

In addition, the amount of taxes payable by the employer in respect of employees in simplified employment will also change:

Section 8 (2) In respect of an employee in simplified employment, the amount of the tax payable by the employer for each calendar day of employment per employee is:

a) 0.75% (instead of the previous 0.5%) of the minimum wage effective on the first day of the month in question; that is HUF 2,200 a day, under Section 7 (2) a)

b) 1.5% (instead of 1% before) of the minimum wage effective on the first day of the month in question; that is, HUF 4,400 per day, under Section 7 (2) (b)

c) (no changes in taxes for film industry extras, the rate remains at) HUF 8,700 per day

Pension benefit bases will also change:

Section 10 (2) The basis for calculating pension benefits:

(a) 2.1% of the minimum wage effective on the first day of the month in question – HUF 6,100 per day in case of tax payment under Section Article 8 (2) a)

(b) 4.2% of the minimum wage valid on the first day of the month in question – HUF 12,200 per day in case of tax payment under Section Article 8 (2) b)

(c) 2.8% of the minimum wage valid on the first day of the month in question – HUF 8,100 per day in case of tax payment under Section Article 8 (2) c)

provided that the pension benefit base is determined rounded to the nearest hundred forints.

Section 8 (2) and 10 (2) apply to employment relationships arising after 1 February 2025 under this legislation.

Amendment of Act I of 2012 on the Labor Code

• Exemption from work

The following provision will replace Section 55 (1) m) of the Act on the Labor Code, and the following paragraph (n) will be added to Section 55 (1):

The employee will be exempt from fulfilling availability and work obligations:

m) for a maximum period of two hours to participate in elections for Members of Parliament, elections for members of the European Parliament, elections for local government representatives and mayors, elections for minority self-government representatives and local or national referendums, if the duration of ordinary or ordered extraordinary working time allocated to that day exceeds eight hours, or

(n) for the period specified in the terms and conditions governing the employment relationship.

• Paternity leave

The length of paternity leave remains the same, but the period during which the absence can be taken by the father has changed. Instead of the previous two months, this option can be used until the end of the fourth month:

Labor Code, Section 118 (4) Fathers are entitled to ten working days of paternity leave by the end of the fourth month following the birth of their child or, in the case of adoption, by the end of the fourth month after the decision authorizing the adoption have become final. The leave should be granted at the time the father requests it, in a maximum two instalments. An employee is also entitled to paternity leave if his child is stillborn or dies.

• Termination of agreement on daily or weekly working hours in case of standby work

In the case of standby work, daily working time should not exceed twenty-four hours, and weekly working time should not exceed seventy-two hours. There is no change in this, but the termination of the agreement is modified:

Labor Code, Section 99 (3a) The employee may terminate the agreement with fifteen days' notice effective as of the last day of the calendar month, or the last day of the allocated cumulative working time where applied, or on the last day of the calendar month – after six months – if allocated cumulative working time of more than six months is applied.

(3b) Upon termination of the allocated cumulative working time, the parties apply the provisions of Section 95 (4) a) if the employee terminates the agreement before the end of the allocated cumulative working time.

(3c) The employee may not suffer any disadvantage if they do not consent to the conclusion of the agreement or terminate the agreement.

The amendments to the Labor Code entered into force on 1 January 2025. 

Amendment of Act XCIII of 1993 on Occupational Health and Safety

Among other things, the Act on Occupational Health and Safety specified the qualifications required to perform basic occupational health services, as well as the qualifications required from a specialist to prepare a rescue plan for the employer (effective from 1 July 2025).

In Section 54 (3) of the Labor Code, it is indicated that the employer has to prepare a risk assessment at least every five years instead of the previous three years. Points (a) to (d) detail changes in working conditions where risk assessment needs to be carried out more frequently (effective from 1 January 2025).

On the employment of third-country nationals

• Government Decree No. 450/2024 (XII.23.) on the Employment of Guest Workers in Hungary

According to the government decree, a third-country national may be employed in Hungary with an employment permit for work purposes or a residence permit for guest workers if Hungary or the European Union has concluded a readmission agreement with their country of origin. According to Annex 1, citizens of Georgia and Armenia are currently included among the nationals of eligible third countries.

The decree further states that, in the absence of the above conditions, a national from a third-country may also be employed in Hungary with a residence permit for employment purposes or a residence permit for guest workers if their country has an organization or office officially recognized by their country in Hungary, which undertakes to be responsible for the national leaving Hungary’s territory and returning to their country in the event of non-compliance with Hungarian or European Union legislation on the entry and residence of third-country nationals.

The list of these countries is not yet available, the Minister responsible for foreign policy will publish those third countries that meet the above criteria outside Georgia and Armenia in the Official Bulletin annexed to the Hungarian Gazette (Magyar Közlöny).

This decree entered into force on 1 January 2025.

• Decree No. 51/2024 of 23 December 2024 of the Minister for National Economy on the total number of residence permits and guest worker residence permits that may be issued annually in Hungary for employment purposes

The maximum number of residence permits for employment purposes and guest worker residence permits that can be issued in Hungary in 2025 under a single application procedure is 35,000.

This decree entered into force on 1 January 2025. 

NAV and MÁK documents used from 1 January 2025 can be downloaded from the following page:

Tax advance declarations

• Tax advance declaration on costs
• Allowance for young people under the age of 25 (Change: If the taxpayer is a foreign individual, as of 2025, young people under the age of 25 can utilize the allowance only if they are citizens of an EEA state or a non-EEA state bordering Hungary (Ukraine, Serbia). The allowance for young people under the age of 25 is only granted if the taxpayer has not taken and does not use the same or similar allowance for the same period in another state.)
• Family tax allowance (Change: the family tax allowance will increase in two stages from 1 July 2025 and 1 January 2026 (you can read more about this in the December 2024 newsletter), so it is worth drawing employees' attention to the fact that from 1 July 2025 it will be necessary to amend the declaration for those who jointly apply for the allowance and have specified the tax base allowance in terms of amount and not per child. Those who specified it per child will automatically benefit from a higher tax base allowance. Also, individuals who claim family tax allowance alone do not need to provide a new tax advance declaration in July. Another change is that the family tax allowance can only be used by citizens of an EEA state or a non-EEA state bordering Hungary, i.e. Ukraine and Serbia).
• Personal allowance
• Newlywed allowance (Change: If the taxpayer is a foreign individual, from 2025 the newlywed couples' allowance can be used if the taxpayer is a citizen of an EEA state or a non-EEA state bordering Hungary, i.e. Ukraine or Serbia)
• Declaration by a non-resident individual
• Allowance for mothers with four or more children
• Allowance for mothers under 30 years of age

On the website of the Hungarian State Treasury (MÁK) you can find the current forms used in connection with health insurance cash benefits: infant care benefit (csecsemőgondozási díj), child care benefit (gyermekgondozási díj), foster parent childcare benefit (örökbefogadói díj), sick pay (táppénz), child nursing sick pay (gyermekápolási táppénz), work accident (üzemi baleset), accident-related sick pay (baleseti táppénz), cash benefits available on grounds of equity (méltányosságból igénybe vehető pénzbeli ellátások)

Other forms available at the Hungarian State Treasury for employers and social security payers:

documents for the electronic administration of health insurance cash benefits for employers (foglalkoztatókat érintő egészségbiztosítási pénzbeli ellátásokkal kapcsolatos elektronikus ügyintézés dokumentumai), resolutions (határozatok), orders (végzések), information materials (tájékoztató anyagok), forms to be used in the performance of paying agent tasks (kifizetőhelyi feladatellátás során használandó nyomtatványok)