Hungary introduces major tax breaks for young mothers: monthly gains could reach EUR 460!

Hungary is set to roll out one of its most generous family-focused tax measures in years, with significant income tax relief for two-child mothers under the age of 40. From 1 January 2025, eligible women will be fully exempt from paying personal income tax (PIT), while expanded family tax allowances could leave some households up to HUF 180,000 (EUR 460) better off per month.

The new rules form part of the government’s broader demographic and family support strategy and are expected to affect tens of thousands of working mothers.

Full income tax exemption from 2025

According to RTL, from the start of next year, women under 40 who are raising two children will no longer have to pay personal income tax on income earned from employment. Hungary’s PIT rate currently stands at 15%, meaning the exemption alone represents a substantial increase in net wages.

However, the tax relief does not stop there.

According to tax expert Iván Vadász, vice-president of the Hungarian Association of Tax Consultants, the family tax allowance will also double, and, crucially, it can now be deducted not only from income tax but from social security contributions as well.

This combined system is particularly advantageous for average earners. Based on calculations by Hungary’s Central Statistical Office (KSH), the total monthly benefit for some families could reach HUF 180,000, depending on salary level and eligibility.

The benefit is not automatic

Despite the size of the tax relief, affected mothers should be aware that the exemption is not applied automatically.

To receive the benefit as part of their monthly salary, eligible employees must submit a tax advance declaration. This can be done in two ways:

• via the National Tax and Customs Administration’s online platform (ONYA), or
• directly through the employer, by submitting the required documentation.

NAV spokesperson Szilvia Linczmayer emphasised that even if someone submits the declaration late, the benefit is not lost. In such cases, the tax relief will apply from the moment of declaration, while any missed amounts can be reclaimed later through the annual tax return.

What happens if you turn 40 during the year?

One of the most common questions concerns eligibility for mothers who turn 40 during the year. Will the tax exemption end on their birthday?

According to current legislative plans, the answer is no.

Under the rules announced so far, eligibility is determined based on the individual’s age group at the start of the tax year, not on a day-by-day basis, HR Portál reports. This means that a woman who turns 40 at any point during the year will still qualify for the exemption for the entire calendar year.

For example, someone who turns 40 in March 2026 would still be entitled to the tax benefit from 1 January to 31 December of that year.

Gradual expansion from 2026

The government has also outlined a phased expansion of the tax exemption in the coming years:

• From 2026: two-child mothers under 40 remain fully exempt
• From 2027: the exemption extends to those aged 40–50
• From 2028: mothers aged 50–60 become eligible
• From 2029: the exemption applies to all age groups, including those over 60

The gradual rollout is intended to ensure administrative simplicity and budget predictability, while avoiding situations where eligibility would change mid-year.

What foreign residents should know

For expats and foreign residents working in Hungary, the rules apply equally to all tax residents, regardless of nationality, provided they meet the eligibility criteria and are subject to Hungarian personal income tax.

Experts advise affected families to review their tax status early and submit the necessary declarations as soon as possible to avoid missing out on monthly savings.