Useful
Student Job Taxation 101
Looking for a job but unsure what your net wage will be? Let's see what you need to know about student job taxation!
Income from work is taxable, so it's no coincidence that there can often be significant differences between your gross salary and the net amount you actually receive. However, you've probably heard that thanks to a tax exemption for young people, you're exempt from personal income tax (SZJA) until you turn 25. But what exactly does this mean? Who does it apply to, when, and in which cases do you still have to pay tax or contributions? Student job taxation has never been so simple – let's see why.
Tax Categories on Wages
If you work, your income is taxable – this is to ensure that everyone contributes equally to public burdens. Therefore, an employee's wages are subject to various taxes and contributions, which, as a general rule, are the following: 15% personal income tax (SZJA), and 18.5% social security contribution, which consists of 10% pension contribution, 7% healthcare contribution, and 1.5% labor market contribution. In addition, the employer is responsible for paying the 13% social contribution tax (Szocho).
Taxation of Student Jobs
The taxation of students differs significantly from the general rules above. Students working as members of a student cooperative were subject to different regulations even before the SZJA exemption, as they were not considered insured persons. Thus, they did not have to pay social security contributions, and their income was only subject to the 15% personal income tax. However, since 2022, the situation has changed significantly: employees under the age of 25 are not subject to SZJA either, currently up to gross 656,785 HUF per month. If you earn more than this, the SZJA will be deducted from the amount exceeding this limit, similar to previous rules.
If you want to work during the summer break after finishing primary school, high school, or university, you're in luck, as your student ID remains valid until the end of October after the academic year ends. This means you don't have to pay contributions during these months either.
It's important to know, however, that as a student, you can also work within an employment relationship. In this case, you are considered an insured person according to social security regulations, and therefore you are entitled to all benefits: you can receive sick pay, and your employment relationship is also taken into account for pension calculations. However, this also means that you have to pay the 18.5% social security contribution. This is determined and deducted from your wages by the employer, so you don't have to do anything about it. The SZJA exemption for those under 25, of course, also applies to you in this case, so you will receive 81.5% of your gross wage – in contrast to students working as members of a student cooperative, who receive their full gross wage up to the aforementioned limit.
The Process of Tax Payment
Of course, the tax must be paid to the tax authority, but the method of payment is crucial – this is determined by the type of employment.
Student Cooperative
If you work as a member of a student cooperative, and the SZJA exemption does not apply to you, the personal income tax is deducted, declared, and paid by the cooperative to NAV (National Tax and Customs Administration). Your only task is to declare your income in your annual SZJA tax return and submit it to the tax authority by May 20th for the previous year.
Employment Relationship
If you work within an employment relationship based on an employment contract, the contributions are determined and paid by the employer on your behalf, so you already receive your net wage – with the SZJA amount added for those under 25, of course.
Other Legal Relationships for Work
If you work under another legal relationship for work – typically with a commission contract – the obligation to pay contributions depends on whether your remuneration for the work reaches 30% of the minimum wage. If it does, you are considered insured, and the social security contribution is deducted and declared by the employer to NAV; you have nothing to do here either. If your payment is lower than this, no insurance relationship is established, and you don't pay contributions.
The SZJA exemption naturally applies to you here as well, but if your income exceeds 656,785 HUF, your client will already pay the personal income tax on this amount for you, and in this case, you will still need to prepare an SZJA tax return.
Why Choose a Student Cooperative?
The SZJA exemption undoubtedly represents a huge relief, as you can keep tens of thousands of forints more in your pocket – especially if you work through a student cooperative. But the advantages don't stop there: let's see why, in addition to favorable student job taxation, it's worth working at a student job cooperative if you're under 25 and have student status!
SZJA Exemption and Flexibility
Y Generation is a good choice not only because of favorable taxation and SZJA exemption. Besides having more money in your wallet at the end of each month, most current student jobs can be done with flexible working hours. Our partners mostly adapt to your schedule, so you don't have to stress about this among your assignments.
More Free Time
Since most of our jobs can be done with a flexible schedule, and thanks to student job taxation, you also earn more, you'll have more opportunities for relaxation – and you can even provide the financial means for it yourself. Of course, besides entertainment, building your future is also extremely important, and thanks to the exemption, you can save for it more easily.
Work = Relaxation
Do you spend too much time at school, studying a lot, and therefore crave a little more movement and some mental refreshment? One of the characteristics of student job cooperatives is that they allow you to choose from various entry-level jobs. Our retail assistant, fast-food, or warehouse jobs, besides providing excellent earning opportunities, also create opportunities for making friends and new acquaintances.
Relevant Professional Experience
You might not have thought it, but as a student, you can do more than just assistant jobs. At our cooperative, you can also snap up excellent internship positions, so you can gain your first serious professional experience SZJA-free, with the benefits of student job taxation – or even find simpler office jobs.
Choose Y Diák!
You can see that as a student, you can find work in many different ways. You can work in an employment relationship, with a commission contract, or even with simplified employment. However, if your goal is to find the perfect job for you and receive the highest possible net wage for the work done, a student cooperative will be the right choice for you.
If you use Y-Diák's services, in addition to applying the tax exemption for those under 25, you don't have to worry about paying social security contributions, so you can receive your full gross wage – and it's certainly not insignificant how much remuneration you receive for your invested work.
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