The 2024 amendments to the legislation on business organisations have brought significant changes not only in taxation, but also in labour law, employment and health insurance. Some of the changes are designed to make administration in payroll simpler and more efficient, and to speed up the process of claiming health insurance cash benefits and sick pay after accidents.
Minimum wage
Although it will not reduce administration in payroll, the changes to the minimum wage in Hungary should be highlighted among the changes affecting payroll in 2024. As we previously revealed, breaking with tradition the decision to raise the minimum wage and the guaranteed wage minimum was taken in November 2023, but there were two stages to implementing the amendment.
The new minimum wage and the guaranteed wage minimum were taken into account for the first time when determining wages due for the month of December 2023. The minimum wage increased to HUF 266,800 gross, while the guaranteed wage minimum is now HUF 326,000 gross.
In connection with the increase in the minimum wage and the guaranteed wage minimum, the tax payable on simplified employment changed, since this rate is based on the minimum wage, and the minimum contribution threshold for employees also changed. This is because the minimum contribution threshold for employees is 30% of the minimum wage, so from 1 December 2023 the social security contribution and social contribution tax will be payable on HUF 80,040.
When assessing insurance in the case of contract work, the increased minimum wage in force from 1 December 2023 is also used to determine whether or not the individual becomes insured. If the income underlying the contributions for the given month reaches 30% of the minimum wage or, one-thirtieth of the minimum wage when broken down by calendar days, i.e. HUF 2,668, the contractor is obliged to register, declare, deduct and pay.
The second step affected social security benefits, rehabilitation contributions, social contribution tax allowance, personal tax allowance or remote-working cost reimbursements linked to the minimum wage, and for these the amendment was not applicable until January 2024.
Other fringe and non-wage benefits
One area where administration in payroll really has been reduced in Hungary from this year is payer returns. As we touched upon in the summary of 2024 tax amendments, the obligation to declare and pay certain other fringe and non-wage benefits no longer has to be met on a monthly basis like in previous years, but on a quarterly basis. One exception here is among others the portion exceeding the annual allowance of the fringe benefits granted to an employee who leaves during the year (SZÉP card recreational allowance). In practice, this means that if part or all of the fringe benefit given to the employee in the month of departure is no longer considered a non-wage benefit, the tax on the benefit must be declared and paid in the month of departure instead of as part the quarterly obligation.
Claiming health insurance benefits
The other area where administration in payroll is changing significantly – albeit not yet simplified – from 2024 is the administration of health insurance cash benefits. This is because from 1 January 2024, the procedure for claiming health insurance benefits in Hungary (sick pay, accident sick pay, infant care allowance, childcare allowance, etc.) for employers who are not social security paying agents has changed. Instead of the general programme for completing forms (ÁNYK), claims must now be submitted through the Business Gateway.
This means that forms sent from the ÁNYK, such as employer certificates, claim forms and forms on permanent incapacity to work will no longer be accepted by the health insurance fund. The claim form EB_IGBEJ_01 can be found in the Personalised Administration Interface (SZÜF), available from the Business Gateway (or Government Portal or Office Gateway), under the Health/Health Insurance Cash Benefits menu. If the claimant is applying on the grounds of a permanent incapacity to work, the EB_FOLYKK_01 form should be used.
Of course, it is still possible to submit the form by proxy, but for this the proxy must be registered in the E-Administration Register (RNY).
In this article, we have highlighted only some of the changes to payroll accounting affecting employers and employees in 2024. Our payroll experts will be happy to provide you with more information on other benefits and legislation, and how they may be applied at your company. Please do not hesitate to contact us.
