Tax relief for employers of unskilled workers

A company that employs a worker in a position requiring no vocational qualifications is entitled to use tax relief and reduce the amount of social contribution tax payable. The condition is satisfied by unskilled work that the Central Statistical Office
(KSH) places in the FEOR 9 main category. Typically, these are positions such as fast food servers, factory workers performing basic tasks or cleaners in general. However, the above list is far from complete! A number of other positions may
also qualify, therefore it is worth taking a close look at the workforce to determine which positions the company may be entitled to tax relief on.

How much of a reduction can you expect? The amount of tax relief depends on the current minimum wage, as the tax liability can be reduced by a maximum of half of the social contribution tax payable above the minimum wage. It is important, however, that the reduction is for each worker employed in anunskilled job. So the more of these workers an employer has, the greater the tax relief is. For example, a company that employs 20 unskilled employees can receive a tax reduction of exactly HUF 259,470 per month in 2021. This equates to savings of more than HUF 3 million annually. The tax allowance can also be used retroactively. Staying with the above example, and using the tax allowance for 5 years retroactively, which is the maximum period possible, the amount is HUF 18 million.

Who do we recommend should examine the availability of this tax relief? 

• Manufacturing companies where unskilled workers are involved in basic production tasks: not operating machines, just “serving” or “feeding” them.
• There is also a good chance in the case of workers performing packaging operations manually, without the use of sophisticated machines.
• But it may be worth examining simple office jobs as well, as the tax relief is available, for example, for an office errand runner!

How can we help you?

• We assess all the positions at your business to see if any of them may satisfy the requirements. We also estimate the possible amount of the tax reduction. 
• The next step is to examine the identified positions in detail. To do this, we also consult with representatives of the affected areas by telephone or using on-site interviews. Based on the information obtained, we draw up a preliminary opinion on whether, according to the KSH’s occupational classification guidelines, the job concerned belongs to the FEOR 9 main category, and whether tax allowance is available for it.
• Upon request, we can also support you in obtaining the official position of the KSH, thereby eliminating all risks.
• If the company decides to use the tax relief, we can help in filing the returns or, in the case of retroactive enforcement, in the process of self-revision.
• Our lawyers would be pleased to help by reviewing the job descriptions and clarifying them if necessary.

If you have any questions in connection with our services, please contact our advisor colleagues.