Hungary

Personal allowances

In 2023, the amounts of family tax allowance are as follows:

• HUF 66,670 if there is one dependent child
• HUF 133,330 if there are two dependent children, or
• HUF 220,000 if there are three or more dependent children, per month for each child.

The allowance is deductible from the taxpayer's tax base. 15% of the unused amount of the child tax base allowance is to be deducted from the social security contributions (18.5%). As of 1 January 2020, all mothers who are currently raising at least four children, or who have raised four or more children during their lifetime, will be completely exempt from paying the PIT in case of certain types of income specified by law (especially in case of the wage income).

Persons entitled to the child benefit are entitled to apply this allowance regardless of whether they actually receive child benefit payments from the state budget.

According to the 597/2022. (XII.28.) Government Decree on the family allowance for families raising chronically ill or severely disabled children, as of 1 January 2023, in addition to the existing family tax allowance, an extra allowance of HUF 66,670 per month can be applied for dependants who qualify as chronically ill or severely disabled person. This practically means an additional HUF 10,000 net allowance per dependant.

Couples marrying after 31 December 2014 are able to decrease their tax bases by a total monthly amount of HUF 33,335, under certain circumstances. One requirement for this tax base allowance is that at least one member of the couple be in their first marriage. The allowance is available for a maximum period of 24 months. There is no age limit on eligibility for the tax benefit of first marriage.

PIT allowance for individuals under age 25

Individuals under age 25 can apply this allowance with respect to certain incomes, but only up to maximum the gross national average income published by the Hungarian Central Statistical Office for the July of the preceding year (HUF 499,952 for July 2022). It practically means that individuals under age 25 can apply the PIT-free allowance but only up to this maximum limit, which is net of HUF 74,993/month in 2023.

PIT allowance for mothers under age 30

According to the 596/2022. (XII. 28.) Government Decree about the tax allowance for mothers under age 30, as of 1 January 2023, young women giving birth, older than age 25 but not older than age 30 when reaching the 91st day of pregnancy, giving birth, or adopting a child, may reduce their consolidated tax base with this allowance. The maximum amount of the tax relief is HUF 74,993/month in 2023. However, it is important to know that the allowance is only eligible if the woman’s entitlement to the family tax allowance opened after 31 December 2022 in connection with her fetus, biological, or adopted child.