In 2018, the remuneration of nursery and day nursery services remains in the tax-exempt category. It will be new for this benefit in 2019 that companies can recognize costs without tax not only if the invoice is issued in the name of the company but also if it is issued in the name of the employee. Beside the nursery and day nursery basic services, the employer can reimburse the meals as well.
Benefits that are no longer tax-exempt from January 1, 2019
- The other tax-exempt items will be taxed as income in 2019 according to the rules adopted, i.e. as a wage in the case of employment.
- Cafeteria items to be taxed as income next year:
- tickets or passes to sport events
- tickets to cultural events, programs, services
- rental support for employees living at a distance
- housing support
- financial support for student loan repayment
- risk life, accident and health insurance
The common charges on non-wage benefits will be 15% of personal income tax and 19.5% social contribution tax. This is a total of 34.5% tax compared to this year’s 34.22%. In determining the tax base, the 1.18 multiplier will no longer have to be applied.
In this category, Széchenyi Recreation (SZÉP) Card can be provided by the employers in 2019 under the same conditions as this year:
- Széchenyi Recreation Card Leisure subaccount – max. HUF 75,000 per year
- Széchenyi Recreation Card Catering subaccount – max. HUF 150,000 per year
- Széchenyi Recreation Card Accommodation subaccount – max. HUF 225,000 per year
According to Government Decree 76/2018 (IV.20.), the administration of SZÉP Card will also change significantly, which places additional burdens on employers.
- Employers cannot claim SZÉP Card for their employees directly. The employer shall open a limited purpose GIRO payment account with a payment service provider per SZÉP Card sub-account (accommodation, catering, and leisure).
- SZÉP Card is an optional cafeteria item: it will no longer be possible to transfer amounts on subaccounts freely during use, they can be used only for the purposes of the given subaccount.
- Employers will have to transfer the SZÉP Card benefits directly to the employers’ different SZEP Card accounts per subaccount one by one or by bank group payment. For the employer, the employee’s obligation is to give his/her SZÉP Card payment account numbers per subaccount. In the absence of a SZÉP Card payment account, the employer will not be able to provide SZÉP Card benefit for the given employees from January 2, 2019. Therefore, it is recommended that you as an employer call your employees’ attention to the importance of giving the account numbers.
Employers of the private sector may give non-wage benefits of up to HUF 450,000 per year in proportion to the number of days spent working. For budget organizations, the pro rata proportion of HUF 200,000 per year is the maximum limit.
Specific defined benefits
The tax on these benefits should be established at 1.18 times the value of the benefit in 2019.
15% personal income tax and 19.5% social contribution tax shall be paid on this tax base.
Thus, the total common charges will be 40.71%.
According to the newly adopted tax package, this category will include:
- non-wage benefits (SZÉP Card) above the limit
- dedicated service paid to a voluntary pension fund
- gift voucher of a limited value (once a year for up to 10% of the minimum wage)
and some more special benefits.
Popular benefits of this category of 2018 will also be transferred to the category taxed as income (wage) from January 1, 2019:
- hot meals at the workplace
- Erzsébet voucher
- reimbursement of the monthly local travel pass (for local public transport)
- school start allowance
- contribution to voluntary pension fund, voluntary health fund, mutual aid fund,
- cash payment
- the cost of school-based trainings paid by the employer
The employer shall pay the employer’s charges on these benefits and deduct from the employees the employees’ charges and pay them to the central budget. Charges deducted from the employees: 33.5%, employer’s charges: 21%.
Changes in cafeteria items also affect the adjustments of policies, which must be available in January 2019.
Companies where the gross amounts of non-wage benefits were substantial should by all means consider the benefit package from 2019, as it would mean a much higher wage cost for those who will not change it.