Business infrastructureEconomy & Policy

Companies can receive hundreds of thousands of forints in tax benefits per student

The Ministry of Innovation and Technology has submitted proposals to parliament to amend the Vocational Training Act.

Making Hungary’s vocational and adult education system more efficient will help it perform a more flexible and comprehensive range of tasks and allow it to better adapt to changes in the labor market and changing economic expectations; a renewed system will also lead to more opportunities for collaboration with companies. 

The amendment to the law is in response to experiences gathered in the current renewed school system in which technical and vocational schools offer competitive knowledge and real professional experience, with an emphasis on the acquisition of practical knowledge. It is important that as many students as possible have specialized education in a corporate environment, even with their prospective employers.

The growing popularity of vocational training has also created new opportunities for economic operators. Now, per the amendments, partners can receive a significant tax benefit of up to HUF 250,000 per student per month.

The apprenticeship contract is also being replaced by a vocational training employment contract, meaning a student will work for a company and, in return for studies and work, is entitled to a salary significantly higher than the previous benefits, even equal to the current minimum wage, but at least 60 percent of it.

The employer will not be liable to pay the social contribution tax, vocational training contribution tax or personal income tax. Another plus is that the person participating in vocational education will now also be entitled to a student card.

Under the new system, originally launched in 2020, faculty salaries have increased by an average of 30 percent.

All students in vocational training receive a general scholarship and then a salary as their studies progress. The benefits of this new vocational training system are being recognized by more and more students and parents — a majority of students continuing their studies after the eighth grade were admitted to a technical school in 2021.

If adopted, the amendments will mostly apply starting this July or in September, at the start of the new school year.

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