Hungary's 15% Flat Tax: SZJA, TB Contributions, and the Youth Exemption Under 25

Hungary operates one of the simplest tax systems in Europe: a flat 15% personal income tax (SZJA) that applies equally to all employment income, regardless of how much you earn. Combined with an 18.5% social contribution (TB járulék), the total employee deduction sits at 33.5% of gross salary for most workers.

But there is a major exception that has become one of the most talked-about policies in Central European tax circles: workers under 25 pay zero income tax on employment income up to the national average wage. This benefit, introduced in 2022 and expanded in subsequent years, has reshaped how young Hungarians think about entering the workforce.

The SZJA: Hungary's flat income tax

The személyi jövedelemadó (SZJA) is Hungary's personal income tax. Since 2011, Hungary has used a flat rate structure with a single rate of 15% applied to all taxable employment income.

There are no progressive brackets. Whether you earn Ft 300,000 per month or Ft 3,000,000 per month, you pay 15% of your taxable income in SZJA. This makes Hungary one of the few EU countries to have fully abandoned progressive income taxation.

How SZJA is calculated

SZJA is calculated on the gross salary directly, before any additional deductions. The formula for a standard employee is:

SZJA = Gross salary × 15%

For example, on a monthly gross salary of Ft 640,000:

• SZJA: Ft 640,000 × 15% = Ft 96,000/month
• Annual SZJA at this salary: Ft 1,152,000

TB járulék: Social security contributions (18.5%)

The TB járulék (társadalombiztosítási járulék) is the employee social contribution, currently set at 18.5% of gross salary. It is split into three components:

Contribution	Hungarian name	Rate
Pension	Nyugdíjjárulék	10%
Health insurance	Egészségbiztosítási járulék	7%
Labour market contribution	Munkaerőpiaci járulék	1.5%
Total	TB járulék	18.5%

Unlike some European countries, there is no ceiling on TB járulék contributions. The 18.5% applies to all employment income regardless of amount.

What does the employer pay?

In addition to the employee's 18.5% TB járulék, the employer pays a szociális hozzájárulási adó (Szocho) of 13% on the gross salary. This is a direct cost to the employer, not deducted from the employee's gross pay. When budgeting for a hire, Hungarian employers factor in a total cost of approximately 113% of the agreed gross salary.

Total deductions: what you actually take home

Component	Rate	Monthly (Ft 640,000 gross)
Gross salary (Brutto bér)	n/a	Ft 640,000
TB járulék (pension 10%)	10%	-Ft 64,000
TB járulék (health 7%)	7%	-Ft 44,800
TB járulék (labour market 1.5%)	1.5%	-Ft 9,600
SZJA (income tax 15%)	15%	-Ft 96,000
Net salary (Nettó bér)	66.5%	Ft 425,600

On a Ft 640,000 gross monthly salary (approximately the 2026 national average), the net take-home is approximately Ft 425,600, representing a 33.5% total deduction rate.

The youth SZJA exemption: zero tax under 25

Hungary's most discussed recent tax policy is the 25 év alattiak SZJA kedvezménye (SZJA exemption for workers under 25). Workers under 25 years of age are fully exempt from paying SZJA on their employment income, up to a ceiling equal to the national average monthly wage.

How the exemption works in 2026

• Age threshold: Under 25 years old (applies until the month of the 25th birthday)
• Income ceiling: The exemption applies up to the monthly average gross wage, approximately Ft 575,000/month in 2026 (or approx. Ft 6,900,000/year)
• Benefit: Full 15% SZJA exemption on income below the ceiling
• Social contributions: TB járulék (18.5%) still applies in full
• Above the ceiling: Income above the average wage ceiling is taxed at the standard 15% SZJA

Real-world example: under-25 vs over-25

Component	Worker under 25 (Ft 500,000/month gross)	Worker 25+ (Ft 500,000/month gross)
TB járulék (18.5%)	-Ft 92,500	-Ft 92,500
SZJA (15%)	Ft 0 (exempt)	-Ft 75,000
Net monthly	Ft 407,500	Ft 332,500
Annual difference	+Ft 900,000/year for the under-25 worker

The exemption is worth up to Ft 1,035,000 per year at the maximum ceiling. For a new graduate or young professional, this is a significant financial advantage in the early years of their career.

Family tax benefit (Családi adókedvezmény)

Hungary also offers a family tax base reduction for parents. This reduces the taxable income used for SZJA calculation and provides a direct monthly cash benefit:

• 1 child: Ft 10,000/month SZJA reduction
• 2 children: Ft 20,000/month SZJA reduction per child (Ft 40,000 total)
• 3 or more children: Ft 33,000/month SZJA reduction per child

The family benefit is a direct reduction of SZJA owed, not a reduction in taxable income, making it highly valuable for families with multiple children.

Minimum wages in Hungary (2026)

Category	Monthly gross	Approx. monthly net
Minimum wage (általános minimálbér)	Ft 266,800	approx. Ft 177,200
Guaranteed wage minimum (for skilled workers)	Ft 326,000	approx. Ft 216,700

Employer costs: the full picture

Hungarian employers must also account for the Szocho (13% employer social contribution) when budgeting for headcount. For a Ft 640,000 gross salary:

• Gross salary: Ft 640,000
• Szocho (13%): Ft 83,200
• Total employer cost: Ft 723,200/month

This is important context when negotiating salaries: a Ft 640,000 gross salary actually costs the employer over Ft 720,000 per month.

KATA: the freelancer flat tax

Self-employed individuals and sole traders in Hungary can optionally use the KATA (kisadózó vállalkozások tételes adója) simplified flat tax regime. Under KATA, eligible freelancers pay a fixed monthly fee rather than progressive taxes. This is a separate system from the SZJA and TB járulék structure described above.

KATA underwent major restrictions in 2022 and is now only available for freelancers working with private individuals, not companies. Freelancers working primarily with business clients typically use the standard self-employment tax regime instead.

Filing your tax return with NAV

For most employees, the annual SZJA calculation is handled automatically by the NAV (Nemzeti Adó- és Vámhivatal, Hungarian Tax Authority). Each spring, NAV makes a pre-filled eSZJA return available online:

• Available from: Mid-March each year
• Filing deadline: 20 May for the previous tax year
• Platform: NAV Online (nav.gov.hu)
• Most employees: Simply review and confirm the pre-filled return; no manual calculation needed

Employees who want to claim additional deductions (family benefit, first marriage allowance, etc.) should carefully check their pre-filled return before accepting it.

Key takeaways

• Hungary uses a flat 15% SZJA with no progressive brackets.
• Employee social contributions (TB járulék) are 18.5% with no income ceiling.
• Total employee deduction: 33.5% of gross salary.
• Workers under 25 pay zero SZJA up to approximately Ft 6,900,000/year.
• The under-25 benefit saves up to Ft 1,035,000/year in income tax.
• Employers also pay 13% Szocho on top, making total employer cost approx. 113% of gross.
• Most employees can confirm their eSZJA return online with NAV by 20 May each year.

Use our Hungarian salary calculator to model your exact gross-to-net for 2026, with or without the under-25 SZJA exemption.