Wage protection, social security revolution, casual work: this is what 1 July 2025 brings.

Discounts on infant care, childcare and adoption fees

From 1 July 2025, the benefits and social security procedures for children have changed. Among the most important changes is the personal income tax exemption for infant care, child care and adoption fees, a benefit that provides significant savings for families with young children. Entitlement to benefits is available not only to birth parents but also to adoptive parents, foster parents and grandparents. "The tax exemption applies automatically, so no special declaration is required, but the childcare allowance will still be subject to a 10% pension contribution," said Mónika Fuscsics, an expert at PwC.

Toddlers - back to work

The amendment to the law will open the possibility for those receiving the infant care allowance to resume gainful employment from the 91st day of the child's birth, but in this case the amount of the allowance will be reduced from 100% to 70%. Any gainful activity below the 90-day limit, except in the case of foster parenthood, may result in the loss of entitlement to the benefit.

Social security paying agents changes

From July 1, 2025, updated forms will be introduced for social security paying agent reporting, such as the new "Data Establishment Form", and the 70% infant care allowance will be added to the contents of the health insurance cash and accidental sickness benefit schedule. The use of the new forms is mandatory for benefits determined after 30 June and the first submission of data under the revised XML is due in August 2025.

The e-tb booklet

The introduction of the e-tb ledger from 1 January 2026 will bring significant changes to social security record keeping. The new electronic system aims to replace the paper-based social security booklet with a digital format containing key social security data for all persons with a social security number, including personal identification data, employer name, tax number, details of legal status, and information on health insurance and accident benefits. "The e-tb booklet will not only reduce the administrative burden for employers, but will also facilitate the collection of data for pension assessment, contributing to faster and more accurate administration, as well as increasing the transparency of the system and data security,"

Wage protection: more for the debtor

From 1 July 2025, the Judicial Enforcement Act was amended, bringing significant relief for debtors, who will receive greater protection for their living income during enforcement proceedings.The most important change was in the area of wage protection: the part of the monthly wage paid that does not exceed 60% of the net minimum wage, currently HUF 116,029, is exempt from enforcement. This amount is significantly higher than the previous fixed exemption amount, which was HUF 60,000. The new rule does not apply to child support and childbirth expenses and only applies to income paid from 1 July 2025.

The family allowance is exempt from enforcement

The amended law introduced an exemption for the family allowance. The net amount of the family tax allowance under the Personal Income Tax Act has been exempted from garnishment, which particularly helps families with children, as the full net amount remains with the debtor. This exemption applies only to enforcement proceedings starting after 1 July 2025, not to earlier ones. Despite the changes, it remains the case that if the net salary payable after garnishment exceeds HUF 200,000, the excess can be enforced without limitation.

Simple employment changes

Mid-year changes to the rules on simplified employment (efo) aim to increase employment transparency and reduce abuses. One of the main changes came into force on 2 February, affecting the rate of tax payable by those working in efo. This has increased to 0.75% of the minimum wage (2,200 HUF) for seasonal agricultural and tourism work, 1.5% of the minimum wage (4,400 HUF) for casual work and 3% of the minimum wage (8,700 HUF) for film extras.

The change, introduced on 25 May, means that the public charge will be based on the rate in force on the day of the work, rather than the date of declaration. In addition, from 1 July 2025, a new rule will introduce an annual limit of 120 calendar days on the employee side, which will now apply to all employers, unlike the previous practice.

Higher public charges, expanding efo framework

From 1 January 2026, two other important changes will come into force regarding simplified employment. For seasonal agricultural work, the annual limit of 120 calendar days can be extended by an additional 90 days at a higher public charge (1.125%). And for casual work, the 90-day annual limit between the same employer and employee will be abolished, which could significantly expand the possibilities for casual work. These changes, together with the query system provided by the NAV, which has already been introduced, will further increase the transparency of the operation of the system and provide employers with the possibility to check the remaining efo margin of their employees.

Twice the budget revenue will be generated by the change to the EFO law

- read our previous article!