Significant changes of cafeteria rules for 2019
In our newsletter we will give you an overview of the popular fringe benefit (“cafeteria”) elements and their changes as well as the tax rates applicable for year 2019.
Dear Clients, Dear Readers,
The Hungarian Parliament has implemented radical changes in the fringe benefits system as of year 2019.
Tax exemptions will be abolished
The following popular benefits that are tax exempted by the end of 2018 are going to be taxable as salary from next year:
- Housing support for mobility purposes
- Employer housing benefit up to 30% of a purchase price or construction cost, but at a maximum of 5 million HUF per 5 years
- Takeover of student loan instalment during employment period
Tax exempted benefits also in year 2019
- Day-nursery or kindergarten services provided free of charge or at a discount (non-cash benefit)
The service fee of kindergarten, nursery can be reimbursed upon invoice issued to the employer or the private individual (employee).
- Interest-free employer housing loan through a financial institution at a maximum of 5 million HUF per 5 years
- Entrance tickets or season tickets to sport and cultural events for individuals will be tax exempted up to minimum wage
SZÉP-card will remain a kind of fringe benefit – employer’s burden will be 34.50%
Opposite to year 2018, you are no longer allowed to give fringe benefits to employees in form of cash benefit up to HUF 100,000 per year from 2019.
Payments to the SZÉP card’s sub-accounts up to the actual thresholds (accommodation: HUF 225,000, catering: HUF 150,000, leisure-time services: HUF 75,000) will be available in 2019, too.
The employer has to pay 34.50% tax in 2019 (34.22% in 2018) if the value of the two fringe benefits mentioned above does not exceed the annual recreational framework amount, which is HUF 450,000 (HUF 200,000 in public sector).
“Certain specific benefits” will be partly abolished – the employer’s tax burden 40.71% will not change
For any benefit given to private individuals over the threshold applicable to the SZÉP Card’s sub-accounts or the annual framework amount (HUF 450,000 or 200,000), the employer has to pay a total tax of 40.71%.
Please find the list of fringe benefits from 2019 compared to year 2018.
We hope that the overview above can support you in your decisions regarding next year’s cafeteria benefits.
Our colleagues will be pleased to help you in interpreting the rules detailed above.
Kind regards,
ABT Treuhand Group
Date: 22. November 2018 | Topic:
The above summary is provided for information purposes only. We recommend that you consult our experts before making any decision based on this information.
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