Personal income tax and social security in Hungary

With a flat personal income tax rate and clear social security contributions, it’s designed to keep things simple—especially for employees. Whether you’re working in Budapest or just curious about how taxes work in this Central European country, this guide covers everything you need to know: how much you’ll pay, how it’s collected, what it funds, and what you need to file. Let’s dive in as of April 2025!

How Much Does It Cost?

Hungary keeps its personal income tax (PIT) simple with a flat 15% rate on taxable income. Whether you’re a resident taxed on worldwide income or a non-resident taxed only on Hungarian earnings, this is the chunk you’ll see taken out. But that’s not the whole picture—social security contributions add another layer.

• Employee Contributions: As an employee, you pay 18.5% of your gross salary for social security. Combine that with the 15% PIT, and 33.5% of your gross pay disappears before you see it, leaving you with 66.5% as your net salary. Check out the details on PwC Tax Summaries.

• Employer Contributions: Your employer chips in too, paying 13% as a social tax on top of your gross salary. This doesn’t come out of your pocket but bumps up the total labor cost to 46.5% above your net pay, as noted in Wikipedia: Taxation in Hungary.

For example, if your gross salary is HUF 1,000,000:

• You lose HUF 150,000 (PIT) + HUF 185,000 (social security) = HUF 335,000.

• You take home HUF 665,000.

• Your employer pays an extra HUF 130,000, making their total cost HUF 1,130,000.

It’s a clear split, but it shows how much goes into the system from both sides.

How Is It Collected?

The good news? If you’re an employee, you barely have to lift a finger—your employer handles most of it.

• Personal Income Tax: The 15% PIT is withheld at source. Your employer calculates it, deducts it from your gross salary, and sends it to the National Tax and Customs Office (NAV) by the 12th of the next month. Simple, right? More on this at Boundless EOR.

• Social Security: Your 18.5% contribution is also deducted from your paycheck by your employer, who then pays their 13% social tax directly to NAV. It’s all bundled into monthly electronic filings.

• Other Income: Got a side hustle, rental property, or crypto gains? You’ll report and pay taxes on those annually through a tax return. Crypto, for instance, is taxed at 15% PIT on profits (gross revenue minus costs), with no social charges, per PwC Tax Summaries.

Fringe benefits—like a company car—get a special treatment: taxed at 15% PIT + 13% social tax on their fair market value (sometimes multiplied by 1.18), paid quarterly by the provider since January 2024.

What Does It Fund?

So, where does all this money go? It’s split between general government needs and social safety nets.

• Personal Income Tax: Your 15% PIT flows into the government’s general budget. Think roads, schools, and public administration—everything that keeps Hungary running. It’s not earmarked for specifics, but it’s the backbone of public services, as implied in Accace 2025 Tax Guideline.

• Social Security Contributions: The 18.5% you pay, plus your employer’s 13%, funds Hungary’s social system:

  • Pensions: Ensuring retirees have income.

  • Healthcare: Covering doctor visits and hospitals (dependents over 18 pay HUF 11,800/month in 2025 if not employed).

  • Family Benefits: Supporting programs like child allowances.

  • Unemployment and More: A safety net for tough times.

This dual system ensures both immediate public needs and long-term social support are covered.

Filing Requirements: Do You Need to File?

Hungary makes tax filing easy for most employees, but there are cases where you’ll need to roll up your sleeves.

• Employees with Salary Only: If your income is just from a job and your employer withholds correctly, you’re off the hook. NAV automatically prepares your tax return based on employer data—no filing needed unless you spot an error. See Wikipedia: Taxation in Hungary for more.

• Extra Income or Deductions: Have rental income, crypto profits, or want to claim family tax credits? You must file by May 20th of the following year. The tax year runs January 1 to December 31, per EURAXESS.

• Non-Residents and Expats: Taxed on Hungarian income? You might need to file, especially if double tax treaties apply. Register with NAV for a tax ID, and late filers face fines up to HUF 200,000 (~EUR 678).

Employers file monthly social security declarations electronically, and if they’re not Hungarian-based, you might need to step in if they don’t.

Special Allowances and Exemptions

Hungary sweetens the deal with some tax breaks:

• Family Tax Allowances: In 2025, you can deduct HUF 62,500 per child (1-2 kids) or HUF 206,250 per child (3+ kids) from your tax base, sharable between spouses.

• Youth and Moms: Under 25? PIT-exempt up to HUF 1,146,000. Moms under 30? PIT-free. Moms with 4+ kids (or 3 with 12+ years of family allowance)? Lifetime PIT exemption, per Wikipedia: Taxation in Hungary.

• EKHO Option: Artists and athletes can opt for a 15% tax (9.5% for pensioners), skipping regular PIT and social taxes (except on minimum wage), as per Accace 2025 Tax Guideline.

Double tax treaties also help residents offset foreign taxes, a perk detailed in EURAXESS.

Quick Reference Table

Here’s a snapshot of the rates:

Wrapping It Up

Hungary’s tax system blends simplicity with purpose. The 15% PIT and 33.5% total employee deductions (plus 13% from employers) keep public services and social programs humming. Filing’s a breeze for most employees, but extra income or deductions mean a May 20th deadline. With family allowances and exemptions, it’s a system that balances fairness and support. Want more specifics? Head to NAV’s official site or consult a tax pro.