News:

Cafeteria 2018

01 January 2018

In 2018, only positive changes will be occurred regarding to fringe benefits. The tax-free allowances which exist now will be expanded with student loan support. The conditions of housing support of mobility will be more favorable significantly, and because of the 2.5 reduction of healthcare contribution employees will get higher amount in the next year in case of many cafeteria elements.

Fringe benefits

In 2018 the employer has to pay 15% personal income tax and 14% HCC for 1.18 times of value of the fringe benefits invariably. So the whole tax burden is 34.22% in 2018 too.

The scope of the privileged taxed elements is not changing. On the one hand we could give Széchenyi Recreation Card with subaccounts and frameworks we already know in 2017, as well as cash payment also could be possible with the same tax burden until 100,000 Ft.

In case of cash payment we have to pay special attention to the fact, that with privileged taxation we can pay only the part of total amount prorated with the days of the employment during the year.

Nevertheless we have to pay attention that these two benefits has combined limit also. So annually 450,000 Ft could be given from these with privileged taxation. This combined limit refers to the net amounts. Over this maximum amount the tax burden of certain specified allowances will be valid.

Certain specified allowances

In case of certain specified benefits the HCC decrease from 22% to 19.5%. The tax base is also the corrected value by factor of 1.18, but next to the 15% personal income tax there is 19,5% HCC. So we could calculate with 40.71% instead of 43.66% tax burden in 2018.

With this tax burden we could implement the issuance of fringe benefits which were removed from the scope of privileged taxed elements in 2017 (voluntary pension fund, voluntary health fund, local transport pass, school starting support, etc.), or even other allowances with paying attention to issuance’s conditions.

Tax-free allowances

The scope of often used tax-free benefits remain, moreover it expands in 2018.

The cultural entry, the sport event entry, the housing loan support, the nursery will be available in 2018 too without modification.

 

The conditions of housing support for mobility are softened significantly from 2018: in case an employee is employed at least 36 hours a week and his residence is at least 60 km away from his/her workplace or travelling by public transport is longer than 3 hours, from 2017 the employer can support the monthly rental fee of the employee. From 2018, the clause that only those employees can claim this that have permanent employment contract will cease. The temporary employment contract is no longer a barrier. A further positive change is the growth of the maximum limit of the amount. In the first 2 years of the employment the maximum of the benefit increased from 40% to 60% of the minimum wage. In the following 2 years the maximum of the allowance become 40% of the minimum wage instead of 25%, then for 1 more year the maximum can be 20% of the minimum wage. In the following years the benefit cannot be granted tax-free. The employee, intends to use this benefit, has to comply with some further conditions. The employee can’t have own flat at the place of work and it’s 60 km area at the time of declaration and in the prevoius 12 months. From 2018, only major ownership means excluding circumstance. Furthermore only one claimant can get the allowance for a particular apartment. The issue of the allowance can be achieved in several ways. On one hand, the employer may pay the whole rental fee for the employee (which can be certified by a proof) or the part of it. The other opportunity that the employer rents a flat and provides it to the employees for free or with discount.

Student loan support: From 2018, the employer can support tax-freely the redemption of employees’ existing student loan. The amount of the allowance: the obligatory installment but maximum the 20% of the minimum wage. As a condition of the payment the employee must prove both the existence of the debt and the monthly repayment.

The value of specified and the tax-free allowances shouldn’t be calculated into the frame amount of 450,000 Ft.

 

The most often used elements

2018

Name of benefit

Tax burden

Privileged taxation limit

Cash allowance

34.22%

up to HUF 450.000 (annual frame amount), over 450.000 HUF the tax burden is 40.71 %

annual HUF 100.000 HUF

Széchenyi Recreation Card

 

 

           Accommodation account

34.22%

annual HUF 225.000

            Catering account

34.22%

annual HUF 150.000

            Leisure time account

34.22%

annual HUF 75.000

Entrance to cultural event

0%

annual HUF 50.000

Entry to sport event

0%

unlimited

Computer usage

0%

unlimited

Contribution (+14%) to distant work commute

0%

unlimited

Housing support

0%

HUF 5 million/5 years

Life insurance for whole life

0%

unlimited

Risk insurance

0%

monthly 30% of minimum wage

Supporting redemption of student loan

0%

the obligatory installment but maximum the 20% of the minimum wage

Gift voucher

40.71 %

unlimited

Payment above the privileged limit

40.71 %

Payment of privileged or tax-exempt elements above the frame amount

Payment above the frame amount of

40.71 %

 

HUF 450.000

Certain specified benefits

40.71 %

unlimited

Erzsébet voucher

40.71 %

unlimited

Reimbursement of local travel pass

40.71 %

Up to the price of the pass

Contribution to voluntary pension fund

40.71 %

unlimited

Contribution to voluntary health fund

40.71 %

unlimited

School starting voucher

40.71 %

unlimited

 

 

(*) Have to examine the joint value of the singed allowances. These allowances are available till 450,000 HUF/year on privileged, 34.22% taxation. Over this we have to count with 40.71% burden.

 

If you have questions, please consult us at andrea.makar@bdo.hu or +36 70 458 7247 at any time.