In 2017 the employer has to pay 15% personal income tax and 14% HCC for 1.18 times of value of the fridge benefits. So the whole tax burden is 34.22% in 2017 too, but the scope of benefits will become narrow.
Nevertheless the scope of the privileged taxed elements is changing significantly. Such popular benefits eschewed from this scope as the local travel pass, the Erzsébet-voucher, the school starting support and the voluntary funds.
On the one hand we could give Széchenyi Recreation Card with subaccounts and frameworks we already know in 2016, as well as cash payment also could be possible with the same tax burden until 100,000 Ft.
Nevertheless we have to pay attention that these two benefits has combined limits also. So annually 450,000 Ft could be given from these with privileged taxation. This combined limit refers to the net amounts.
Certain specified allowances
In case of certain specified benefits the tax base is also the corrected value by factor of 1.18, but next to the 15% personal income tax there is 22% HCC. So we could calculate with 43.66% tax burden in 2017.
With these tax burdens we could implement the issuance of fringe benefits this year often used (voluntary pension fund, voluntary health fund, local transport pass, school starting support, etc.), but even other benefits paying attention to issuance’s conditions.
The scope of often used tax-free benefits remain, moreover it expands in 2017.
The cultural entry, the sport event entry, the housing loan support, the nursery with slight modification will be available in 2017 too. In case of the nursery, it was questionable that the reimbursement of the meal is also included to the tax-free category. The modifications, which are valid from 2017.01.01., are clarifying this, and it will appear in the low mentioned by name. Beside this the housing support for mobility, the different healthcare services and the repayment of kindergarten cares are added to the scope of the tax-free benefits.
Housing support for mobility: in case the 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, the employer can support the monthly rental fee of the employee. In the first 2 year of the employment the maximum of the benefit is the 40% of the minimum wage. In the following 2 year the maximum of the allowance can be 25% of the minimum wage, then for 1 more year the maximum can be 15% of the minimum wage. In the following years the benefit cannot be granted tax-free. 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 when the employer rents a flat and provide it to the employees for free or with discount.
Health services: risk insurances can be tax-free up to the 30% of monthly minimum wage in 2017. Insurances can also fit for this scope which does not pay money when an event occurs, but provide health care coverage.
Reimbursement of kindergarten care: in the 2017 personal income tax law not only in the nursery, but kindergarten services also appears among the tax-free elements, without limitation. The settlement can also operate in the same way as in case of nursery. The employer can pay directly to the kindergarten, or can pay to the employees based on the bills - on kindergarten staff services or meals - submitted by them.
The 9 HUF/km expenses that could be paid to the employees coming to work outside the administrative borders (or in special cases inside) is going to increase to 15 HUF/km. It constitutes a special case, if the employee is not able to use public transportation due to serious disability, or has a child attending nursery school or kindergarten.
The value of specified and the tax-free allowances shouldn’t be calculated into the frame amount of 450,000 Ft.
Often used elements
As employees are typically informed of the changes from the press, so you should send them detailed information in order to avoid any misunderstandings.
With conscious design and communication the employees can easier adapt the changes, in regard to this we are happy to help our clients.
Should you have questions, please consult us at [email protected] or +36 70 458 7247 at any time.