Salaries and Payroll Taxes in H2 2019, Hungary
Changes to social contribution as of 1 July, 2019
A company’s payroll costs add up from the gross salary and the Employer’s payroll tax that needs to be paid by the company on top of the gross salary. As of 1 July 2019 the Employer’s payroll tax decreased from 21% to 19%. This is thanks to the reduction of the social contribution tax from 19.5% to 17.5%, as it is a major element of the payroll tax (the other is the vocational training contribution tax at 1.5%).
No change to the Employee’s taxes
There is no change in the Employee’s payroll taxes (which is 33.5% in total and is deducted from the Employee’s gross salary: 15% income tax, 10% pension contribution, 8.5% health insurance contribution and labor market contribution).
To sum up
If you have a part-time employee with HUF 100,000 as their monthly gross salary, they get HUF 66,500 as their net salary, which costs HUF 119,000 to the company.
Changes to the company costs
Thanks to the decrease of the social contribution, company costs are reduced slightly. The below sums are all in HUF.
| Minimum wage | from 1 January 2019 | from 1 July 2019 |
| Gross salary: | 149,000 | 149,000 |
| Company’s payroll tax: | 31,290 | 28,310 |
| Total cost: | 180,290 | 177,310 |
In case of paying minimum wage, employer costs are reduced by HUF 2,980.
| Guaranteed minimum salary | from 1 January 2019 | from 1 July 2019 |
| Gross salary: | 195,000 | 195,000 |
| Company’s payroll tax: | 40,950 | 37,050 |
| Total cost: | 235,950 | 232,050 |
In case of paying the guaranteed minimum salary, employer costs are reduced by HUF 3,900.
| Higher salary | from 1 January 2019 | from 1 July 2019 |
| Gross salary: | 200,000 | 200,000 |
| Company’s payroll tax: | 42,000 | 38,000 |
| Total cost: | 242,000 | 238,000 |
The higher the salary you pay, the more the employer costs are reduced thanks to the 2% decrease of the social contribution tax.
Seems complicated? Then go check out our salary calculator to see how much each employee will cost you.
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