How does the SZÉP card work in times of Covid?

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How does the SZÉP card work in times of Covid?

If you have employees in Hungary, this is probably not the first time you hear about the SZÉP card, which allows employees to divide their fringe benefits between accommodation, catering and leisure based on their preferences. However, the government recently had to adjust the corresponding rules due to the economic impact of Covid. But what are these changes are and how long will they be in place?

What is the SZÉP card?

The SZÉP card (Széchenyi Recreation Card) is a special type of fringe benefit in Hungary. (Click here to read more about fringe benefits, often called “cafeteria” in Hungary.) It can be used for three purposes: accommodation, catering and leisure. These are referred to as the “pockets” of the SZÉP card. Usually, money in a certain pocket can only be spent on that specific purpose, meaning that you can use the accommodation pocket to pay for a hotel room, but not for a meal in a restaurant. However, employees can choose how much money they would like to receive in each pocket.

How the SZÉP card limits have changed

Normally, employees can receive a yearly maximum of HUF 450,000 on their SZÉP card. There are also limits to how much many one can receive per pocket: these are HUF 225,000 for accommodation, HUF 150,000 for catering, and HUF 75,000 for leisure. 35,99% tax will apply to any benefits exceeding these amounts. However, the Economic Protection Action Plan implemented by the government increased the above limits in the following manner.

  • Total yearly limit: HUF 800,000
  • Accommodation pocket: HUF 400,000
  • Catering pocket: HUF 265,000
  • Leisure pocket: HUF 135,000

Please note that the increased limits were only in place until 30 June. Employees who received less than the original limits by 30 June can continue receiving additional fringe benefits up to the original limits. However, employees who received more than the original limits by 30 June cannot receive any additional fringe benefits until the end of the year.

Using the three pockets during Covid

Most free-time establishments were closed during lockdown, while restaurants were limited to take-away and delivery. Consequently, you could spend from the catering pocket, but using the accommodation and leisure pockets proved much more difficult. The government responded to this by making the three pockets temporarily interoperable, meaning that the SZÉP card can be used to pay for any of the three purposes, regardless the pocket in which the money is. This change allows you to pay for a meal using the leisure pocket, but also for other options, such as purchasing a ticket to the cinema using the accommodation pocket. (With the latest relaxation to the pandemic-related restrictions, you can already visit most free-time establishments again, while there are still events where you would need an immunity card.) As opposed to the increased limits mentioned in the previous section, this measure is in place until the end of 2021.

Need help? Contact us!

In Hungary, the SZÉP card and other fringe benefits are included in the cafeteria plan of enterprises. If you would like to learn more about fringe benefits, or perhaps set up the cafeteria plan of your business, contact the English-speaking professionals of Helpers Finance. You can learn about our payroll services here. You can ask for a consultation by calling our office on +36 1 215 0712, by e-mailing info@helpersfinance.hu or by filling in our contact form.

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