Disability benefit for the personal income tax in Hungary

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Disability benefit for the personal income tax in Hungary

To support people who live with severe health conditions, Hungary offers them a special type of personal income tax benefit. The disability benefit reduces the personal income tax one has to pay, increasing the net salary of employees.

Payroll taxes and the disability benefit

In Hungary, employers and employees always agree on the gross salary. Both the employer and the employee must pay taxes based on this. The employee’s taxes are calculated by the employer, who also forwards these payments to the authorities, so the employee only gets their net salary. If the available tax benefits change, that may affect the net salary, while the gross salary remains the same. You can read about Hungarian tax benefits here.

Being eligible for the disability benefit changes how much personal income tax your employee pays. As a result, your accountant should know about these health conditions so they can apply the benefits when doing payroll for your company. In line with this, your employees must submit supporting documents to you and your accountant.

If your employee cannot submit the required proof on time, or an existing health condition is recognized late, the employee can reclaim these taxes when they submit their tax returns at the start of the next year. The disability benefit can be reclaimed for up to 5 years.

Calculating the disability benefit

The disability benefit is tied to the minimum wage applicable on 1 January of the given year. The basis of the monthly disability benefit is at most one third of the monthly minimum wage rounded to the closest hundred, and the actual sum is 15% of that (which is the rate of the personal income tax in Hungary).

In line with this, the sum of the Hungarian disability benefit in 2024 is

  • up to HUF 13,335 each month,
  • up to HUF 160,020 for the entire year.

A person is eligible for this benefit in a given month if they can prove that they had the relevant health condition for at least one day that month. This can be proven by a certificate from a specialist.

Relevant health conditions

The health conditions based on which someone can apply for the disability benefit in Hungary are defined by law, based on the International Classification of Diseases (“BNO” for short in Hungarian). If you check the law in Hungarian, next to each condition you will see the relevant ICD code, based on which you can see if you are eligible even if you do not speak Hungarian.

There are more than 750 specific health conditions listed. Below you can find a summary with some examples and explanations:

  1. Various forms of hearing loss (if one does not hear human speech below 60 dB)
  2. Mental and behavioral disorders (if one’s IQ is below 70)
  3. Visual disturbances and blindness (cannot be corrected by glasses)
  4. Injured or missing limbs, spine injuries, arthritis, paralysis, obliterative diseases of blood vessels (anything that will not let one stand on public transport and hold onto rails)
  5. Developmental disorders, e.g. autism or Rett syndrome
  6. Schizophrenia, schizotypal and delusional disorders
  7. Certain tumorous diseases and cancer, e.g. Hodgkin disease and other forms of lymphoma, malignant neoplasm of bone and bone marrow, brain and cerebral meninges, breasts, cervix, uterus, ovary, prostate, testicles, or lungs
  8. Living with artificial openings
  9. Immune deficiencies that cause organ damage
  10. Gastrointestinal disorders, such as celiac disease, things that cause malabsorption, Crohn disease, colitis ulcerosa, cystic fibrosis
  11. Some rare diseases, such as localized scleroderma, disorders of copper metabolism, Huntington disease and various forms of hereditary ataxia, myasthenia gravis and other myoneural disorders, epidermolysis bullosa, neurofibromatosis, sclerosis tuberosa
  12. Endocrine, nutritional and metabolic diseases, such as diabetes type I and II, Zollinger-Ellison syndrome, hypoparathyreosis, Addison’s disease
  13. Metabolic disorders, such as albinism or lactose intolerance
  14. Dependence on renal dialysis
  15. Chronic respiratory failure
  16. Diseases and malformations of the circulatory system
  17. Other congenital malformations and chromosomal abnormalities, such as hydrocephalus or Down’s syndrome
  18. Endometriosis

Accounting and payroll solutions from Helpers

If one or more of your Hungarian employees have any of these health conditions, they are eligible for disability benefit. Make sure your accountant or payroll specialist receives the relevant documents on time so you can provide the right compensation to your employees.

Helpers Finance specializes in working with small and medium sized Hungarian businesses owned by foreign nationals. Whether you need help with accounting and payroll, or even other business solutions, we do our best to make your life easier while navigating Hungarian bureaucracy so you can keep your operation compliant and focus on growing your business.

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