Contribution payment lower threshold in Hungary – significant changes in the contribution burdens of part-time employees

THE NEW SOCIAL SECURITY LAW IN HUNGARY

As the new Hungarian Social Security Law says – came into force from 1st of July – there are some significant changes in contributions, paid after part-time employees. Those insured persons who are in an employment relationship according to paragraph (6. § (1) part a), the contribution must be paid on the 30 percent of the minimum wage.

If the employment relationship starts, ends during the month, exists partly in the month, or the insured person is entitled to the sick allowance, this kind of contribution payment has to be taken into account accordingly on the thirtieth part of the contribution base for each calendar day proportionately.

The No. 168 Hungarian Bulletin determined – published on the 14th of July – that the law modification comes into force from the 1st of September 2020.

The amount of contribution payment lower threshold is 48.300 HUF in 2020.

If the wage of the part-time employee (base of the contrition payment) is less than the lower threshold the employer is obliged to pay the contribution on the difference.

CONTRIBUTION PAYMENT CALCULATION IN HUNGARY

For example: In the case of a 12 hours weekly part-time employment, the minimum wage of the employee should be at least 48.300 HUF based on the government regulation, which reaches the amount of contribution payment lower threshold so no additional payment is needed from the employer. If the working time is only 2 hours/day the monthly minimum salary is lower than the limit, so the contribution should be completed to the compulsory minimum level.

A lower limit threshold does not need to be applied for the following cases:
+ Childcare Fee,
+ Child home care allowance,
+ Adoption fee,
+ Child home care allowance, Child raising support, Care allowance,
+ and for children who study full-time in public education, vocational training institution, or highly education.

Even if the lower threshold contribution was paid by the employee in another legal relationship, it has to be paid in the employment relationship too, as the lower threshold contribution should be considered separately in any employment relationship.

Because the contribution difference between the income and the amount of the lower threshold is not the employee’s expense but the employer’s, the family tax allowance cannot be validated from it.

This contribution payment lower limit is applicable for the social contributions too.

Read more articles regarding Hungarian payroll regulations.