Wage cost aid to create jobs and social contribution taxes related changes
In our previous newsletters we have intended to provide comprehensive information about opportunities and reliefs that are opening through actions taken by the government to ease financial difficulties. We would like to continue the above with the subject newsletter which is to inform you about the new social contribution taxes relief based on the 140/2020. (IV.21.) government decree which had been adjusted by the 225/2020. government decree published on the 23rd of May 2020. Besides the social contribution taxes relief, we focus on a releasing aid program as well.
Social contribution taxes related changes
According to subparagraph (4) in section 3 of the 140/2020. (IV.21.) government decree, social contribution taxes shall not be paid after the amounts that are considered non-wage benefits transferred to the accounts of the Széchenyi Holiday Card until the 31st of December 2020 instead of the 30th of June 2020.
Paragraphs from 21 to 24 of 140/2020. (IV.21.) government decree are effective from the 1st of July 2020. The social contribution taxes rate shall be 15.5 per cent instead of the 17.5 per cent from the 1st of July 2020.
Wage cost aid to create jobs
The government starts a program of wage cost support to create jobs in order to reduce the economic effects of COVID-19 epidemic.
Through the program employers who hire registered job-seeker, who is member of any governmental employment agency, within the frame of employment relationship may receive a non-refundable aid.
Details of the aid
The aid can be requested for a fixed 6-month duration. To receive the aid, employers are obliged to hire these employees for a further fixed 3-month long period.
The amount of the aid is the 100 per cent of the gross wage and social contribution taxes, but at most monthly 200 000 HUF.
The aid may not be claimed for labour-market contribution of 1.5 per cent which means that it still shall be paid by the employer.
Based on the above, employers participating in this program shall guarantee at least a 9-month long employment relationship to claim for the aid.
Example calculations for the aid
Costs and aid in case of employment relationship with minimal wage:
Gross minimal wage: 161 000 HUF
Social contribution taxes: the amount is 28 175 HUF calculated with the rate of 17.5 per cent and 24 955 HUF calculated with the rate of 15.5 per cent following to the 1st of July
Training contribution: 2 415 HUF calculated with the rate of 1.5 percent
Aid to be claimed:
(161 000+28 175+2 415-2415)=189 175 HUF until the 30th of June (161 000+24 955+2415-2415)=185 955 HUF from the 1st of July
Total cost for the employer is the 1,5 per cent labour-market contribution: 2 415 HUF
Employers may reach the maximum amount of 200 000 HUF of the aid with the gross wage of 170 213 HUF until the 30th of June 2020, and with the gross wage of 173 160 HUF from the 1st of July 2020.
Please find below a calculation with the gross wage of 300 000 HUF:
Gross wage: 300 000 HUF
Social Contribution Taxes: the amount is 52 500 HUF calculated with the rate of 17.5 per cent, 46 500 HUF calculated with the rate of 15.5 per cent following to the 1st of July
Training contribution: 5 198 HUF calculated with the rate of 1.5 per cent
Aid to be claimed for the whole period: 200 000 HUF
Total cost for the employer:
(300 000+52 500+5 198)-200 000= 157 698 HUF until the 30th of June 2020
(300 000+46 500+5 198)-200 000= 151 698 HUF after the 1st of July 2020
The aid may be claimed for employees after whom the employer is entitled to get social contribution taxes allowance however the aid may be claimed only for the amount which has been paid. It means that the less social security contribution tax paid, the more gross wage can be distributed as a result of the social security contribution tax allowance deduction. The social contribution taxes allowance remains available after the end of the aid too.
Conditions to claim for the aid
- Hiring registered job-seeker
- If the job-seeker to be hired is already known, personal data shall be indicated in the request form and not necessary to submit the workforce requisition form. If the job-seeker to be hired is not known yet, both the request form and the workforce requisition form to be submitted
- Hiring job-seekers shall result in the net increase of the number of employees compared to the average statistical number of employees corrected with the changes during the state of emergency (the aid organization ensures a guide for the calculation of the number of employees)
- Employers shall guarantee to keep the average statistical number of employees at the given company which means that the employment relationship with the supported employee or other employee working in the same position can be terminated only by the legally determined methods for the period of 6+3 months (mutual agreement and termination by the employer may not be applied)
- Keeping personal records to track the number of employees and meeting with other data disclosure duties
- The aid may be provided as de minimis support so that the rules of de minimis are governing
- Agricultural sector, fishery sector, freight transportation and export activities are not supported
- Limit amounts of de minimis aid received in the past shall be taken into account
- The claimer cannot have either public debt or tax debt (if it arises meanwhile, the aid shall be withheld), shall have organized labour relations and cannot be under bankruptcy proceedings, liquidation proceedings or voluntary liquidation
The aid can be claimed by a request form submitted to the district offices (capital districts) operating as government employment agencies from the 18th of May until the withdrawal of the announcement.
Requests shall be submitted to the district offices (capital districts) operating as government employment agencies, competent based on the permanent address or habitual residence of the registered job-seeker to be hired, before the hire date. If the documentation is comprehensive, decisions shall be made within 8 days by the offices.
In case of positive decision, the office shall establish an official contract with the claimer, in which they detail the rights, obligations and rules of settlement in connection with the aid. Hiring can be started only after the establishment of the official contract.
This document can be downloaded in PDF format by clicking on this link: Wage cost aid to create jobs and social contribution taxes related changes
