In recent days and weeks, the Hungarian government has announced a number of changes to the fringe benefit system. Some of the amendments to the fringe benefit rules that will come into force from 2025 were included among the draft of the autumn tax law amendments, while other measures were announced afterwards. In addition to the changes to the fringe benefit rules, details of the 2025 minimum wage agreement have also been made public.
Minimum wage regulated until 2027
From 1 January 2025, the minimum wage will increase by 9%, and the guaranteed wage minimum by 7% in Hungary. This means the minimum wage will be HUF 290,800 gross per month, while the guaranteed wage minimum will be HUF 348,800 gross per month. Agreements were also reached to increase the minimum wage by a further 13% and 14% in 2026 and 2027 respectively. The aim is to reach 50% of the average wage in three years.
Changes to fringe benefit rules for housing
Perhaps the most significant change to the fringe benefit rules in Hungary is that employers can contribute to housing loan repayments and rental costs of employees under 35 years of age at a reduced tax rate on the grounds of a housing benefit. The benefit is granted based on the 28% tax rate applicable to SZÉP cards, up to HUF 150,000 per month, or the pro rata part of an annual sum of HUF 1,800,000. The benefit may not exceed the employee’s verified spending on such grounds. This element will be optimally integrated into fringe benefit schemes, thereby avoiding any inequalities that might arise between those eligible and those ineligible.
Also linked to this housing objective is the possibility in 2025 for employees to use the funds on their voluntary pension fund account as of 30 September 2024 to buy or renovate a home. Since this option applies to existing funds, it does not necessarily affect the 2025 benefit scheme, but it may be useful to inform employees about it.
The third amendment to the fringe benefit rules, also for housing purposes, is that 50% of the funds on a SZÉP card as of 1 January 2025 or transferred thereafter can be used for home-renovation projects. This could further increase the appeal of the already popular SZÉP card among employees.
Yet another change in the fringe benefit rules affecting SZÉP cards is that in addition to the general annual allowance of HUF 450,000, an Active Hungary wallet will be created, which can be credited with HUF 120,000 per year at a reduced tax rate. This amount can be used specifically for services linked to leading an active lifestyle.
Zoo and gym
Among the more limited changes to the fringe benefit rules, from 2025 – in addition to admissions to sporting and cultural events – it will now also be possible to offer tax-free admission to the zoo. Services offered by the payer through providing free or reduced-rate use of a sports facility (e.g. a fitness gym in the office building) and the sports equipment therein could also become tax-exempt in Hungary.
For more details and up-to-date information on the changes to the fringe benefit rules, as well as advice on how to incorporate them into your company’s benefit scheme, please contact the colleagues of our HR services business line!
