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As usual, the mandatory minimum wage and the educated minimum wage have been increased from 1 January 2023 under the provisions of Governmental Decree 573/2022 (XII.23.).
The decree states that the minimum wage is to be HUF 232 000 and the educated minimum wage HUF 296 400 as of the new year. In addition to determining the minimum wage for full-time employees, the increase also affects a number of other tax and benefit issues. This article aims to summarize them.
Self-employed individuals who are subject to flat-rate taxation may opt for this form of taxation as long as their annual income does not exceed 10 times the minimum wage, i.e. HUF 23,200,000 in 2023. The annual exempt income threshold, which is equal to half the annual minimum wage, has been increased to HUF 1,392,000.
The personal allowance that can be claimed for personal income tax is one third of the minimum wage rounded up to hundred forints, i.e. 77,300 this year, which means a tax saving of 11,595 forints per month.
The minimum contribution base for taxpayers in the defined group (sole proprietors, partnerships) will be adjusted to the new minimum wage in 2023, i.e. HUF 232,000, while the lower limit for the social contribution tax base will be 112.5% of the minimum wage, i.e. HUF 261,000. This means that the group concerned will have to pay tax and contributions on at least these amounts. As far as the upper limit for social contribution tax applies, the tax is payable on certain specified incomes until the sum of the total tax base and certain specified capital and personal income reaches twenty-four times the amount of the minimum wage, bringing the upper limit to HUF 5,568,000 in 2023.
The definition of gifts given at certain events under the Personal Income Tax Act and of gifts of small value are also defined as a percentage of the minimum wage (25%, 10%), so these will also change in 2023. Similarly, salary advance payments can be granted tax-free (without the assessment of income from interest relief) up to five times the minimum wage, i.e. HUF 1,160,000 in 2023. Cultural and sporting event tickets are tax-free under the personal income tax system up to the amount of the minimum wage, i.e. HUF 232,000 from this year.
Self-employed individuals who are subject to flat-rate taxation may opt for this form of taxation as long as their annual income does not exceed 10 times the minimum wage, i.e. HUF 23,200,000 in 2023. The annual exempt income threshold, which is equal to half the annual minimum wage, has been increased to HUF 1,392,000.
Teleworkers (who are to be considered as teleworkers according to the Labour Code) may also be reimbursed for expenses in relation to remote working in the form of a lump sum, for which no receipts are required. The law allows this up to 10% of the minimum wage, which means that from this year the amount of reimbursement without certificates for teleworkers has increased to HUF 23,200 per month.
The daily rate of taxes and contributions after employees in simplified employment is also adjusted to the minimum wage. This is based on a fixed percentage of the minimum wage, rounded up to hundred forints. For seasonal agricultural and tourist workers, the daily tax is 0.5% (HUF 1,200), for casual workers 1% (HUF 2,300) and for film extras 3% (HUF 7,000) of the minimum wage. In addition, for those employed in this way, the minimum daily salary is 85% of the daily minimum wage and 87% of the daily educated minimum wage if educational background is required at least on a middle level. Income earned from simplified employment is not subject to income assessment and declaration up to 130% of the daily minimum wage or educated minimum wage calculated as above multiplied by the number of days of simplified employment.
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