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1.1ÌýÌýÌýÌý Introduction: overview of the domestic payroll system

The tax year in Hungary is the calendar year and the tax system is administered by the Hungarian National Tax and Customs Administration (NTCA). Payroll obligations are defined at state level, there are no provincial features.

Employers are responsible for making deductions and remittances from employee payment and for reporting these actions. Employers must make statutory deductions in every regular pay period basis. These statutory deductions are:

1. Ìý

   •ÌýÌýÌýÌý social security contribution (SSC), and

2. Ìý

   •ÌýÌýÌýÌý prepayment for personal income tax (PIT)

Beyond these deductions from the gross salaries and wages, employers must pay social contribution tax (SCT) which increases costs of labour. See 1.4 for more on SCT.

In some cases (mainly in case of in-kind allowances), withholding amount (SSC and PIT) can be paid by the employer, likewise, sometimes liabilities of the payer can be shouldered by employee (typically in particular cross-border employment).

As a broad rule, labour costs are deemed to be business costs as well, so these amounts are