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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure HU-2020-17/1266 Updated – measures in Hungary

Employee bonus scheme SZÉP card limit rise

A Széchenyi Pihenő Kártya formájában – béren kívüli juttatásként – adható összeg emelése és mentesítése a szociális hozzájárulási adó aló

Country Hungary , applies nationwide
Time period Temporary, 22 April 2020 – 31 December 2022
Context COVID-19
Type Legislations or other statutory regulations
Category Promoting the economic, labour market and social recovery
– Support for spending, stimulus packages
Author Nóra Krokovay (KOPINT-Tárki) and Eurofound
Measure added 07 October 2020 (updated 15 June 2022)

Background information

Government decree 58/2020 raises the ceiling for bonuses that employers can pay to employees on the SZÉP card to HUF 800,000 (€2,219) a year (from HUF 450,000) for private companies and HUF 400,000 (from HUF 200,000) for public (state budget-run) institutions. These payments will also be exempt from one type of social contribution (but it is not completely tax-exempt) for the duration of the pandemic.

Content of measure

The raised amounts in the SZÉP card bonuses paid by employers to employees is exempt from the social contribution szocho, but employers continue to pay 15% tax on the amounts given during the COVID-19 pandemic.

The distribution of the entire HUF 800,000 maximum amount for different spendings is as follows:

  • Up to HUF 400,000 (€1,110) on accommodation
  • Up to HUF 265,000 (€735) on hospitality
  • Up to HUF 135,000 (€374) on recreation

The measure was supposed to be applied until 30 June 2020, but on May 23 the tax exemption of the SZÉP card bonus payments was extended until 31 December 2020 (Govt decree 225/2020).

Updates

The following updates to this measure have been made after it came into effect.

24 December 2021

Under govt decree 781/2021, SZÉP card bonuses can be spent on groceries not just hot food from 1 February 2022 to 31 May 2022, at the following outlets (NACE code, economic activity):

  • 4711 Retail sale in specialised stores with food predominating
  • 4721 Retail sale of fruit and vegetables in specialised stores
  • 4722 Retail sale of meat and meat products in specialised stores
  • 4723 Retail sale of fish in specialised stores
  • 4724 Retail sale of bread, cakes, flour confectionery and sugar confectionery in specialised stores
  • 4729 Other retail sale of food in specialised stores
  • 4781 Retail sale of food, beverages and tobacco in specialised stores

Under govt decree 784/2021 the freedom to spend from any of the three categories of SZÉP card bonuses will be extended until 31 December 2022.

The exemption from the 15.5% employers' social tax (szocho) ended on 31 December 2021, but the tax was lowered to 13% in 2022.

15 April 2021

Under govt decree 178/2021 recipients of SZÉP card bonuses will be allowed to use the amounts placed in one of three categories for targeted spending (accommodation, meals and recreation) interchangeably, so any amount can be used for any of the three purposes. The rule applies until 31 December 2021.

01 January 2021

The measure has been extended until 30 June 2021. The amount of the bonus continues to be exempt from one type of social tax ( szocho - 15.5%).

Use of measure

The government has estimated that the measure could affect 115,000 people. In January-August 2019 (before the pandemic), Hungarians spent HUF 130 billion from their SZÉP card bonuses on tourism, up by 150% from the same period in 2018. A press report said that employer payments were up by 7% in January-August this year, as compared to the same period in the previous year while spending from the SZÉP card budget grew by 15% by August.

Target groups

Workers Businesses Citizens
Employees in standard employment
Sector specific set of companies
Does not apply to citizens

Actors and funding

Actors Funding
National government
Company / Companies
Companies

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement No involvement
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: N/A

Involvement

The Hungarian Chamber of Commerce and Industry made suggestions in the design of this measure, according to press reports.

Views and reactions

TU confederation MASZSZ proposed that the SZEP card system should relax the rules for the duration of the COVID-19 pandemic and allow workers to spend their allowance on catering instead of accommodation.

The retail sector requested that the bonuses could be spent in grocery stores and the tourism sector proposed an extension until the end of 2021, but these proposals have not been included. Critics have questioned how this measure is supposed to help the tourism industry while the country is under lockdown or partial curfew, but perhaps the bonus money was spent in tourism after the pandemic period (in the summer).

In December 2021, the hotels and caterers association Magyar Szállodák és Éttermek Szövetsége (MSZÉSZ) has expressed surprise and concern over the measure to allow grocery purchases from the SZÉP card balance. This measure will reduce revenues in tourism, which has already suffered due to COVID-19, they said. Rural accommodation providers, restaurants, family businesses will suffer the most, MSZÉSZ added. The SZÉP card measures were regarded as a form of support for the tourism industry in 2021. See related measure Provisions relating to accommodation services .

Sectors and occupations

    • Economic area Sector (NACE level 2)
      I - Accommodation And Food Service Activities I55 Accommodation
      I56 Food and beverage service activities
      R - Arts, Entertainment And Recreation R90 Creative, arts and entertainment activities
      R91 Libraries, archives, museums and other cultural activities
      R93 Sports activities and amusement and recreation activities

This case is not occupation-specific.

Sources

  • 07 April 2020: Szép card to get tax reduction and limit raise
  • 22 May 2020: Govt decree 225/2020
  • 23 May 2020: Govt decree 140/2020
  • 16 June 2020: Act 58/2020 on state of pandemic emergency
  • 22 September 2020: Tourism Online: Szép card spending seen to break records in 2020 (turizmusonline.hu)
  • 27 March 2021: Govt decree 150/2021 (njt.hu)
  • 15 April 2021: Govt decree 178/2021
  • 24 December 2021: Govt decree 781/2021
  • 24 December 2021: Govt decree 784/2021
  • 27 December 2021: Caterers angry over SZEP card changes (www.portfolio.hu)

Citation

Eurofound (2020), Employee bonus scheme SZÉP card limit rise, measure HU-2020-17/1266 (measures in Hungary), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/HU-2020-17_1266.html

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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.