Practical information regarding payroll in 2021
Vocational training contributions are becoming more widespread
From 1st of January 2021, the base of the vocational training contribution is already the same as the base of the social contribution tax, which is worth paying attention to when planning the related obligations. In the case of companies, this will lead to an increase in related costs. Until the end of 2020, only income from self-employed and non-self-employed activities was charged by the vocational training contribution, however, from 2021 onwards this must be paid for other income, fringe benefits, certain specified benefits and income from interest rebates provided that the payer is subject to social security contributions in the distribution of these incomes. The regulation remained in place that the vocational training contribution have to be paid only by domestic for-profit organizations.
In the case of SZÉP card benefits the costs also increase! According to current interpretations, from 1st of January 2021, in addition to the 15% personal income tax, the 1.5% vocational training contribution must be paid for fringe benefits, despite the fact that until 1 July 2021 due to the pandemic situation there is social contribution discount after this benefit. Given that the Vocational Training Act imposes a vocational training contribution obligation on income forming the social contribution base by reference to the Social Contribution Tax Act, the social contribution exemption until 30 June was not provided as a tax base but as a tax credit and not in the Social Contribution Tax Act but in an Emergency Act, therefore from a legal technical point of view, this provision does not exempt from vocational training contribution. We expect the Hungarian Tax Authority is going to issue a formal resolution in this regard shortly.
For certain specified benefits, a 1.5% vocational training contribution will also be payable from 1st of January 2021. This should be taken into account, for example for meals and other services incurred on a business trip, private use of the telephone, representation for business partners, business gifts, the cost of small gifts or the amount paid for the targeted services in case of Voluntary Pension Fund and Voluntary Health Fund, as a social contribution obligation arises after 1.18 times the normal market value of the benefits.
The obligation to pay the vocational training contribution must be fulfilled in the usual way in 2021 as well, i.e. a vocational training contribution advance must be paid monthly for the first eleven months of the year. The difference between the advance paid and the annual net liability must be paid or reclaimed by the twelfth day of January of the year following the tax year.
Sick medical certificates, hospital patient certificates
We would also like to draw your attention to the fact that in the case of social payment centres, sick pay papers and hospital patient records will be strictly controlled from 2021 onwards. Pursuant to the legal procedure, the received sick pay certificates must be forwarded within 5 days to the payroll company, where they must be settled the payment within 8 days and transferred to the insured.
At the same time, it is important that non-social payment centres payrolls must also submit employment certificates, so the employer must receive sick pay documents.
Healthcare service contribution
From 1 January 2021, the rate of the health service contribution has changed. The monthly amount to be paid is HUF 8,000, the daily amount is HUF 270.
The modified contribution must be paid for the first time by January, until 12th of February 2021.
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Should you have any questions in relation to the payroll process in 2021, VGD Hungary’s payroll team are gladly at your disposal.
