Petty cash and cash limitations in Hungary
What is petty cash?
Petty cash (“házipénztár”) is a relatively small amount of cash a business may keep at hand, usually to pay for small and urgent expenses. Businesses are not required to have petty cash, especially in this day of online banking, but they often do anyway.
Having petty cash is different from having a cash register. While most retail businesses are required by law to have a cash register for registering transactions between the business and its customers, petty cash is typically used in B2B transactions, between the business and its providers, or for various internal purposes. As a result, even if your business is not required to have a cash register, it still must have a system for registering petty cash transactions if it manages cash.
Petty cash may include not only cash but also checks and vouchers. These should be kept in a separate, secure place, usually a locked cash box or a safe.
By law, there is no limit on how much cash you can keep in your petty cash. However, if you manage cash, you should have an internal rulebook for it, and this should list the amount of cash allowed in your petty cash at the end of a business day. Any amount above the limit should be moved to your corporate bank account. During a tax audit or compliance audit, your petty cash will be checked.
| Before December 1, 2012, the petty cash limit used to be 10% of your previous yearly revenue. While the rule has been abolished, this figure can give you a general idea of how to set a limit for yourself. |
At the same time, a business can make cash payments of up to HUF 1.5 million (ca. EUR 4,000) per calendar month per contract. This limit is separate from the petty cash limit of businesses, but you should keep it in mind when you are writing your petty cash rulebook.
If you manage cash, make sure to consult your accountant about where to keep it, how to create an internal rulebook, and how to set a petty cash limit for your business.
Registering petty cash transactions
The petty cash register of your Hungarian business should be up to date at all times. As a result, you will probably not be able to outsource this task to your accountant, since most accountants working for SMEs manage invoices on a weekly basis. In line with this, you will have to take care of registering petty cash transactions in-house (you have to do it yourself or delegate it to an employee).
The main requirement is that every transaction must be listed separately and in chronological order.
While Hungarian invoices must be issued through licensed software (or registered invoice booklets), there are no such strict formal requirements for registering petty cash transactions. This would mean that you can simply have an excel table regularly updated with the transactions, you just need to make sure the file is backed up regularly and it is accessible in an easy but secure way.
However, petty cash transactions must be supported as well as registered. It is not enough to make a note of the transactions in a file, but supporting documents must also be attached or noted (e.g. invoices or bank receipts of cash withdrawal). If there is no official supporting document to attach (e.g. you pay wages from petty cash, the owner takes out shareholder loan, a customer pays a deposit), you will need to create one. This should be a special petty cash receipt (“pénztárbizonylat”), and it can only be issued formally (from licensed software or an official booklet for logging petty cash transactions). As a result, if you expect high activity in your petty cash and a high need for creating receipts, it makes sense to use licensed software.
As a bare minimum, you will need to register the following information:
- Date of transaction
- Description
- Name and location of supporting document
- Cash In or Cash Out (it is easier if they are in separate columns)
- Balance
Exemptions
If your Hungarian business uses cash, it will need to register petty cash transactions. Only those freelancers are exempt from maintaining a petty cash register who are not VAT subjects and who are not required to have a business bank account in Hungary. Freelancers handling cash must still keep track of their cash transactions, but this may be done as part of the registration of incoming and outgoing payments. Make sure to discuss this with your accountant if you handle cash.
More audits expected throughout 2026
According to latest news, more tax audits will focus on petty cash registers throughout 2026. Audits are expected to scrutinize not registration methods but transactions and balances, and whether the balance indicated in petty cash registers is actually available. The main rationale for this is that at companies where the yearly revenue is between HUF 10 and 400 million, the indicated cash balance is regularly between 8 and 15% of the yearly revenue, which is considered way above what is reasonable, raising suspicions of fraud.
To avoid troubles, review and update
- your cash policy,
- your petty cash register,
- and your shareholder loans.
Helpers Finance at your service
Helpers Finance offers accounting services to small and medium-sized companies operating in Hungary, with a focus on supporting foreign business owners. While we will probably not be able to manage your petty cash register for you, we can help you with creating a cash policy. Our services include HR compliance, payroll administration, and tax advisory as well as accountancy.
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