SZJA

SZJA stands for személyközi jövedelemadó? No, correction: it stands for személyi jövedelemadó, the personal income tax in Hungary. It is a core element of the Hungarian tax system and is administered by the National Tax and Customs Administration (NAV). The SZJA is levied on individual income and is distinct from social security and health contributions.

The tax base includes income from wages and salaries, pensions, self-employment, and capital gains. Residents are taxed on their worldwide income, while non-residents are taxed only on Hungarian-source income. The tax base can be reduced by deductions and credits, including a basic personal credit and various family- or situation-related credits. These credits typically reduce the amount of tax payable rather than the tax base itself.

The SZJA is generally applied as a flat rate to the taxable base after deductions and credits. In practice, this means most earned income falls under a single rate, with the final liability determined by the tax base minus credits. The exact amount of credit an individual can receive depends on circumstances such as income level and family status.

Administration and compliance: employers usually withhold SZJA from employees’ wages and salaries. Individuals with other types of income or who are self-employed must file an annual tax return with NAV to settle their liability or claim refunds. The system is designed to integrate with other taxes and social contributions to fund public services.

Overview and scope: SZJA is a central instrument of Hungary’s personal taxation, balancing a uniform rate on many income types with targeted credits to support families and individuals. It operates within a broader tax framework overseen by NAV and interacts with social contributions and other levies.