Funeral leave is not really leave

What has become colloquially known as funeral leave is not really leave in the legal sense, but a kind of “absence”, or more precisely “exemption from work”. This is because the current provisions of the Hungarian Labour Code do not recognise the concept of special leave. Hence, it is not by accident that the legislators excluded absence requested because of the death of a relative from the scope of leave, as the rules on leave do not apply in this case.

What are the rules on leave that are not applicable in this case? 

• Employees must give notice of their request for leave at least 15 days before the start of the leave. Since death is an unexpected event, 15 working days is not meaningful in this case. Employees can also request exemption from their obligation to work on the day of the death.

• When the employment relationship ends, if the employer has not granted the requisite proportional leave, this must be compensated for, except for paternity and parental leave. In the case of funeral leave, unused days cannot be redeemed because this would not be in line with the original purpose – to provide time. 

Which legislation provides for the exemption from work? 

Section 55 (1) of the Hungarian Labour Code provides for the various cases in which employers are obliged to exempt employees from their obligation to work. These include, but are not limited to, illness, compulsory medical examinations, donating blood or taking part in legal proceedings. Point (f) refers to the exemption in the event of the death of a family member:

Section 55 (1) An employee shall be exempted from their obligation to be available for and to work
f) for two working days upon the death of a relative.

Who counts as a relative?

The closing provisions of the Hungarian Labour Code define what constitutes a relative: 

• spouse or partner,
• immediate relative (e.g. grandchild, child, parent, grandparent),
• adopted, step and foster children,
• adoptive, step and foster parents,
• sibling,
• spouse of an immediate relative (e.g. son-in-law, daughter-in-law),
• relative and sibling of spouse’s immediate relative (e.g. mother-in-law, father-in-law, sister-in-law, brother-in-law)
• and spouse of sibling (e.g. sister-in-law, brother-in-law).

This does not include aunts, uncles, cousins or godparents, which also means that in the event of their death, employees are not entitled to funeral leave.

How to request funeral leave? 

The way to apply for funeral leave is to submit a request to the employer, stating the date of the absence, the reason, and the relationship to the deceased. The two days can be claimed in two instalments for days that are far apart in time (e.g. one day for a funeral and one day for a probate hearing).

The employer usually has a form for this purpose, which can be obtained from the HR department.

What documents need to be submitted or presented? 

To get funeral leave, employers may ask for the death certificate or post-mortem report, subject to GDPR rules.

Until when can you take the two days off? 

There is no deadline set in the Hungarian Labour Code, but in accordance with the principle of the proper exercise of rights, the two days must be granted in the period following the death, at the time requested by the employee. It is important to note that there is no 60-day limit.

One small loophole is that in the case of a change of job, the number of days issued or not in this way is not shown on the exit papers. Since this is not very common, there is no best practice, and the Labour Code does not give clear guidance on how to proceed in such a case.

What remuneration is paid for the period of absence? 

Employees are entitled to an absence allowance for the period of the funeral leave, at the same rate as if they were on holiday.

Our article shows that absences for special reasons, such as funeral leave, can be treated differently from normal leave. Our payroll experts are happy to help our clients navigate their way among the many different types of leave and absence. Feel free to contact us.

A Funeral leave upon death of a relative bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

Minimum wage

Just like the end of each year, a new wage agreement was reached between the Hungarian government and employers last December. Accordingly, from 1 January 2023, the amount of the lowest wage, i.e. the minimum wage, has been increased from HUF 200,000 gross to HUF 232,000, while the amount of the guaranteed minimum wage has been increased to HUF 296,400. At the same time, the basis for the personal allowance, which is one third of the current minimum wage rounded to one hundred forints, has been increased to HUF 77,300, which means a monthly tax allowance of HUF 11,595.

SZÉP card with only one account

For SZÉP cards, the annual limit is still HUF 450,000, up to which employers must pay 28% tax (15% personal income tax and 13% social contribution tax); the excess is taxed as an other benefit (at a tax rate of 33.04%). However, the three sub-accounts (hospitality, leisure and accommodation) have been merged: from 9 January 2023 there is only one SZÉP card account for each employee. The individual sub-accounts and their respective allowances have been terminated. The amounts previously paid into each sub-account have been merged and can be used on a combined basis this year. Employees who already have a SZÉP card will not be given a new bank account number, but will retain their accommodation account number with each distributor.

Increasing tax allowances

Depending on the number of dependent beneficiaries, the family tax allowance for one dependent beneficiary enforceable from the tax base remains at HUF 66,670 per entitlement month, rising to HUF 133,330 for two dependent beneficiaries and HUF 220,000 for more than two dependent beneficiaries. However, from 2023, the family tax allowance for a dependent beneficiary who is permanently ill or a severely disabled person is HUF 66,670 higher per month, so the amount of the allowance for these children increases by HUF 10,000 in tax terms. Employees will be able to request the validation of this allowance on the tax advance declaration.

Looking at the tax allowances, the benefit for young people under 25 also increases: in 2023 the amount of the allowance for young people under 25 is HUF 499,952 per month of entitlement, which means a tax saving of HUF 74,993.

Newest element of tax allowances

A new allowance for mothers under 30 has been introduced in Hungary from this year. A young mother is entitled to the allowance if she became entitled to the family tax allowance after 31 December 2022 with regard to her unborn child, biological child or an adopted child. This allowance is therefore available to young mothers who have reached the age of 25, are under 30 at the start of their entitlement, and became eligible for the family tax allowance after 31 December 2022, for example she reached her 91^st day of pregnancy after 31 December 2022 or her child is/was born after 31 December 2022. The maximum monthly allowance for mothers under 30 is the amount of the average gross earnings of full-time employees at the level of the national economy for the month of July of the year preceding the year in question, as officially announced by the Hungarian Central Statistical Office (KSH). This means that in 2023, the allowance is HUF 499,952 per month of entitlement, which means a tax saving of HUF 74,993.

Leave

In addition to the changes in tax allowances, a new type of leave has been added to the Hungarian Labour Code. Employees are entitled to 44 working days of parental leave up until their child reaches the age of three, subject to at least one year of employment. This leave must be granted at the time requested by the employee. For the duration of the parental leave the employee is entitled to 10% of the absence pay, reduced by the amount of child care benefit or child care allowance paid for this period. To do this, a decision awarding benefits has to be requested.

The regulation on paternity leave  is also changing. Upon the birth of a child, in 2023 the father shall be entitled to ten working days’ leave – instead of the five granted previously – no later than by the end of the second month following the birth of the child or, in the case of adoption, no later than the end of the second month following the finalisation of the decision authorising the adoption, granted when requested, in no more than two parts. The employee is also entitled to paternity leave if the child is stillborn or dies. The employee is entitled to absence pay for five working days of paternity leave, while from the sixth working day onwards he is entitled to 40% of the absence pay.

Restrictions on execution

Fewer people will be affected, but it is worth noting that the restrictions on execution have increased. From 1 January 2023 an exemption is granted from enforcement for the part of the salary not exceeding HUF 60,000 (this amount used to be set at HUF 28,500). By contrast, the part of the monthly wages that exceeds HUF 200,000 can be enforced without limitation (this limit used to be set at HUF 142,500).

In this article, we only highlighted the most important changes affecting labour law and payroll in the 2023 law amendments. Both the elements of the Hungarian Labour Code and the tax allowances are among the many other new developments that may affect your business. Our payroll experts are happy to provide our clients with more information about these or even the changes detailed in this article. Feel free to contact us.

A Tax allowances and leave in 2023 bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.