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Cafeteria benefits 2016

Date: 14. January 2016

Tax laws for 2016 as amended by the Parliament in 2015 do not include changes in taxation of cafeteria benefits. However, by decreasing the general personal income tax rate to 15%, employers pay less tax next year on several benefits provided to individuals.

Cafeteria remain unchanged and tax rates decrease in 2016

Dear Clients and Readers,
Tax laws for 2016 as amended by the Parliament in 2015 do not include changes in taxation of cafeteria benefits. However, by decreasing the general personal income tax rate to 15%, employers pay less tax next year on several benefits provided to individuals.
Following our tradition as in previous years we hereby summarize the most popular cafeteria items and the applicable tax rates.

Tax payable on several benefits is decreased

The effective tax rate imposed on fringe benefits up to 200 thousand HUF and on SZEP card benefits up to 450 thousand HUF is reduced to 34.51% from 35.7% due to standard tax rate reduction of 1%.
In excess of the above or the individual limits of the fringe benefits 49.98% tax will be payable instead of the previous 51.17%.
Please note that the tax consequences of the above benefits remain significantly lower than of the wages where the total tax burden still reaches 96% on the basis of the net income.

Limits depending on the minimum wage

The minimum wage were raised from HUF 105 000 to HUF 111 000 in 2016, which will be followed by limits of many tax-free and fringe benefits.

Our recommendation

Due to the increase of the minimum wage expected and the general personal income tax rate decrease, we recommend to overview and adjust the cafeteria systems and benefits provided to employees and we would be more than happy to assist you in such a project, if needed.

We trust that the above overview tables shall assist you in your decisions regarding next year’s cafeteria benefits. Should you have further queries, our colleagues are pleased to assist you.

Kind regards,
ABT Treuhand Group

The above summary is provided for information purposes only. We recommend that you consult our experts before making any decision based on this information.

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