Our third newsletter this year contains important payroll, social security and labor law changes published since the beginning of March that concern employers.

We also draw your attention to our April article, which dealt with personal income tax base allowances and how employers can help their employees enforce tax benefits, and also drew attention to reclaiming taxes within five years. 

If you have any questions about these changes, our colleagues are happy to help.

Entry of third-country nationals and employment permit types

Government Decree No 35/2024 (II.29.) on the implementation of Act XC of 2023 on the General Rules for the Entry and Residence of Third-Country Nationals presents, among other things, the new legal titles based on which third-country nationals are allowed to reside in Hungary, including for employment purposes.

Several types of permits are available, so employers have to consider the length the residence permit is applied for and its potential to be renewed. It is important to pay attention to any professional qualifications that may be required, as well as the possibility of family members accompanying the applicant. By considering all these factors it is possible to select the right type of permit.

The new law has introduced a guest worker permit, which includes seasonal guest workers, guest workers employed to implement an investment, and guest workers employed with residence permits for employment purposes. For the latter category, a quota has also been set, and attention should be paid to the fact that employers are responsible for ensuring their employees return home after the permit has expired.

For highly qualified third-country nationals, the Hungarian Card has been introduced. It is valid for three years and can be extended, and it also allows family members to join the applicant in Hungary. A Company Card can be issued to a third-country national with high competence, who is a senior executive of an employer (which is determined separately) or an economic operator concluding a settling agreement with such an employer. A National Card has also been introduced, which is valid for two years and provides extendable residence and work permits for Ukrainian and Serbian citizens. Additionally, there is now a White Card for digital nomads from third countries. The legislation is applicable from 1 March 2024.

Here you can read more information about this topic.

The National Tax and Customs Authority has drawn attention to the use of NAV Mobile App

On NAV-Mobil, anyone can easily check whether their employer has registered or deregistered them, or declared if their employment is active. The query is ready in thirty seconds, the data is available quickly and all employment-related changes are available, including wages or contributions. To use the application, you need KAU identification, but later you can set a passcode to access the interface more quickly. This option is very useful for employees, as it allows them to keep track of information related to their employment, so it is worth drawing their attention to it as well.

Tax-free in Budapest with a county pass

From 1 March 2024, county and country passes will be accepted on all state or capital-operated trains travelling within the administrative boundaries of Budapest. This means that the Pest County pass also covers transport in Budapest and there is no need to buy a separate Budapest pass.

County passes used for commuting to work can be accounted for tax-free in the future as well, regardless of whether the pass is also suitable for using local public transport in Budapest.

Information booklets updated in March on the NAV website

In March, some information booklets were also updated  on the NAV website. The details of the 1+1% personal income tax offer are covered in detail, and the information on tax and contribution liabilities for foreign individuals has also been updated.

Change in the central bank base rate

The central bank base rate decreased from 8.25% to 7.75% with effect from 24 April 2024, which affects, among other things, the calculation of the self-revision fee in the monthly return. (Decree 10/2024 of 26 June 2024 by the President of the National Bank of Hungary)

Valorization multipliers applicable to pension benefits between 1 January and 31 December 2024

Government Decree No. 64/2024 (III.28.) on the amendment of Government Decree No. 168/1997 (X.6.) on the implementation of Act LXXXI of 1997 on Social Security Pension Benefits specified the valorization multipliers to be used between 1 January and 31 December 2024 for pension calculations. In the annex you can find the multipliers used this year, which helps to preserve the value of previous earnings and calculate them to present value.

Information provided by the Hungarian State Treasury about maintaining Individual Benefit Sheets

Disbursers that fulfil their monthly reporting obligation by sending .xml files will no longer be required to keep records of individual benefit sheets and supplementary forms (forms KPE 200, KPE 210 and KPE 220 r) from 1 April 2024.

Work schedule around public holidays in 2025

Decree 11/2024 (IV.8.) by the Minister for National Economy covers all employers and those employed by them in a general work schedule.

The work schedule around public holidays in 2025 that differs from the calendar work schedule will be as follows:

(a) Saturday 17 May 2025 will be a working day and Friday 2 May 2025 will be a rest day.

(b) Saturday 18 October 2025 will be a working day and Friday 24 October 2025 will be a rest day.

(c) Saturday 13 December 2025 will be a working day and Wednesday 24 December 2025 will be a rest day.