SZÉP Card taxation has never been this favourable!

At the beginning of 2020 there were no changes to cafeteria benefit regulations, so employers were able to offer essentially the same benefit packages as in 2019.

However, on 22 April a government decree came into force, temporarily but significantly reducing the tax burden on employer SZÉP Card contributions in response to the coronavirus situation, while also confirming the general social contribution tax (SZOCHO) reduction previously projected for July.

0% SZÉP SZOCHO

Under the decree, amounts contributed between 22 April and 30 June 2020 are subject only to 15% personal income tax (PIT) — no SZOCHO is payable. Moreover, the preferential SZÉP Card annual limit was raised substantially.

The annual recreational allowance rose from HUF 450,000 to HUF 800,000 in the private sector, and from HUF 200,000 to HUF 400,000 in the public sector.

SZÉP Card sub-account limits also increased: accommodation from HUF 225,000 to HUF 400,000, hospitality from HUF 150,000 to HUF 265,000, and leisure from HUF 75,000 to HUF 135,000.

SZÉP Card taxation has never been this low — the last time fringe benefits were this affordable was 2009, when they were still fully tax-exempt.

2 percentage point general SZOCHO reduction

The decree also confirmed that from 1 July, the general SZOCHO rate drops by a further 2 percentage points to 15.5%.

For fringe benefits this means employers will pay 15% PIT and 15.5% SZOCHO from July, bringing the total tax burden down to 30.5%.

For "certain specified benefits", the total burden decreases to 35.99% from July.

Tax-exempt benefits

Fringe benefits

Tax burden: until 21 April 32.5% · 22 April – 30 June 15% · from 1 July 30.5%

Certain specified benefits

Tax burden: until 30 June 38.35% · from 1 July 35.99%