Bérlevonás

Bérlevonás, also known as withholding tax, is a tax levied by the employer on behalf of the employee, typically in the form of income tax. This practice is common in many countries, including Hungary, where it is regulated by the Tax Code. The primary purpose of bérlevonás is to simplify the tax system for employees by allowing them to pay their income tax directly to their employer, who then deducts the tax from their salary.

The amount of bérlevonás varies depending on the employee's tax bracket and the applicable tax rates. In Hungary, the tax rates are progressive, meaning that higher income levels are taxed at higher rates. The employer is required to withhold the appropriate amount of tax from the employee's salary and remit it to the tax authorities.

Bérlevonás is a mandatory requirement for employers in Hungary, and failure to comply can result in penalties and legal consequences. The tax withheld is typically remitted to the tax authorities on a monthly basis, although the frequency can vary depending on the employer's tax obligations.

The withholding tax system has both advantages and disadvantages. On one hand, it simplifies the tax process for employees, as they do not need to file separate tax returns. On the other hand, it can lead to underreporting of income, as employees may not disclose all sources of income to their employer. Additionally, the withholding tax system can be seen as a form of double taxation, as the employee pays income tax on their salary, and the employer also pays income tax on the same income.

In recent years, there have been discussions and proposals to reform the bérlevonás system in Hungary, with some advocating for a flat tax rate or a different tax withholding mechanism. However, as of now, the progressive withholding tax system remains in place.