New Personal Income Tax Exemptions for Employees – How Will This Impact Companies?

May 6, 2025 | Author: Szilvia Sarkadi-Nagy

Recently adopted tax changes provide significant personal income tax (PIT) exemptions for mothers with children – and these measures may affect not only individuals but also, indirectly, employers.

According to the amendment passed on April 29., 2025, the scope of personal income tax exemptions is expected to expand significantly, especially for mothers with children. The aim of the measures is to reduce tax burdens, support parental responsibilities, and promote female employment.

Key changes:

• PIT exemption for mothers with three children
From October 1, 2025, mothers with three children will be exempt from paying PIT, regardless of their age. The new regulation aligns with the previously introduced exemption system for mothers raising four or more children.

• Four-phase exemption for mothers with two children
Starting January 1, 2026, mothers under 40 with two children will become eligible for the exemption. The eligibility will then expand gradually: in 2027 to those aged 40–50, in 2028 to those aged 50–60, and in 2029 to those over 60.

• PIT exemption for mothers under 30 with one child
From January 1, 2026, the current tax benefit will be extended to existing children as well, applying to the mother’s full income.

Exemption of parental benefits from PIT
From July 1, 2025, the following benefits will be exempt from personal income tax:

• Infant care allowance (CSED) – provided for 24 weeks, conditional upon an insurance relationship.
• Child care allowance (GYED) – available until the child reaches the age of two.
• Adoption allowance – for adopting children over the age of two (or over three in case of twins), also subject to insurance conditions.

Another important development: 70% of the CSED can be received even while working, starting from the child’s age of three months. This opens the door to a gradual return to work, especially appealing for companies considering part-time or hybrid work models.

If you want up-to-date and legally compliant payroll solutions, as well as strategic advice on how these changes may impact your company, feel free to contact us. Our experienced team of tax advisors and accountants is ready to support you in implementing the new regulations.