What is a Health Fund?

Health funds are non-profit organizations established by private people and financing expenses for health protection, operated by a principle of self-government under strict rules (the basic regulation being the Act on Mutual Funds, that is, Act XCVI of 1993). A fund is owned by the members themselves. Employees may also join a fund in order to support their employees.

Payments may be made to the fund by both private person members and employer members. A major part of payments (after subtracting allocations to the operation and liquidity funds) are transferred to members' individual accounts and are fully available for Fund members for various services.

Tax allowance -  in case of employer's contribution

If an employer assumes members' (employees') membership fee payments, this may be effected in the framework of an employer's contract concluded with the Fund. So-called employer's contributions must be ensured for each employee of the company under uniform terms and conditions: in identical amounts or the same wage percentage or in a cafeteria system.

Up to the amount of the monthly minimum wage, employer's contributions are not subject to any taxes and contributions. An employer may provide as much as HUF 280 800 exempt from tax annually (23 400/ month) to each employee.

Tax allowance - in case of employer's donation

Employers may also provide health fund allowances for employees in the form of donations, even in a differentiated manner. For a company, donations are deemed to be extraordinary expenses and commitments of public interest, therefore it is due to receive a corporate tax allowance based on certification by the Fund.