From 18th of May 2020 employers can apply for a nonrefundable job-creating salary subsidy, provided that they employ a jobseeker registered at the Labour authority.
The wage subsidy for reduced working hours, which can be used to mitigate the economic difficulties caused by the emergency situation is available for employees who are still employed by the company but with reduced working hours – you can find more details of this subsidy in our previous blog -, while the job-creating wage subsidy provides support to the employers for the recruitment of new employees registered as jobseekers at the time of the application.
Besides the subsidy, for reduced working hours companies can apply for the job-creating subsidy as well, but the 2 subsidies cannot be claimed for the same employee.
It is important to note that employees whose employment was terminated due to the emergency may also participate in this program, provided that the conditions of the subsidy are met.
To apply for the subsidy, the designated employee must be a registered job seeker at the district (capital district) labour office.
Duration of the subsidy
The subsidy can be claimed for a period of 6 months, but the employer must maintain employment for an additional 3 months.
Amount of the subsidy
The amount of the subsidy is 100% of the gross salary and the social contribution payable by the employer, but the maximum monthly 200 thousand HUF. Application for the subsidy does not mean that no other tax allowances can be claimed by the employee, so for example, if social security contribution allowance can be applied for the employee the amount actually paid must be taken into consideration for the calculation.
Employers who receive a contribution allowance during the emergency can also benefit from the subsidy, but the maximum payable amount of it may not change due to the termination of the contribution allowance.
The obligation of maintaining headcount
The employer must undertake not to terminate the employment of an employee participating in the program during the 6 + 3 months period, either by mutual agreement or by termination for reasons related to the employer’s activities, the latter method of termination also covering employees in the same or similar positions.
The obligation of increasing headcount
The employment of a jobseeker must result in an increase in the total number of employees, provided that part-time employment also counting as 1 person. The subsidy can be granted if the number of headcount on the date of application is at least equal to the net average statistical headcount of the 6 months preceding the application. In case the headcount in the monitoring period is less than the 6-month average, than the number of legally – terminated employees (defined by the guideline of the subsidy) must be deducted from the statistical average. The resulting 6-month (net) average statistical headcount is considered as the basis for the headcount increase calculation.
Wage subsidy to increase employment is considered as “de minimis” subsidy. The amount of “de minimis” subsidies received in three consecutive years may be a maximum 200 000 EUR in general cases, and a maximum 100 000 EUR for road commercial transport.
Employers requesting the subsidy must declare, among other things, the number of employees, ongoing applications for de minimis benefits, the social security tax allowance for the person to be employed and the fact that the company has no public debts due, which must be accompanied by a public document not older than 30 days issued by the Hungarian Tax Authority.
The employer is obliged to keep records of new joiners and leavers in a way that the reason for termination can be established. The employer has a reporting obligation if there is a change in the circumstances on which the subsidy is based. The employer must notify the authority in case a liquidation process has been started.
Applications must be submitted prior to employment to the district (capital district) labour office, which acts as a public employment body. Applications must be submitted electronically in case the employer is obliged to electronic communication with the authorities. Supporting documents, such as payslips, documents proving the payment of wages and contributions, attendance sheets must be attached to the settlement.
Further details and detailed instructions to the subsidy can be found on the website of the National Labour Service.