As a self-employed person in Hungary you choose how you are taxed, and the choice makes a real difference to your take-home and your paperwork. There are three main routes: KATA, flat-rate taxation (átalányadózás), and the standard rules. Here is how each works and who it suits.
| Regime | How it works | Best for |
|---|---|---|
| KATA | Flat 50,000 HUF a month, but only for full-time sole traders whose clients are private individuals | Solo providers billing individuals |
| Flat-rate | 40% of revenue counts as costs; you are taxed on the other 60% | Most freelancers |
| Standard | Tax on actual profit, revenue minus your real, documented expenses | Businesses with high real costs |
KATA: simple, but very restricted
KATA lets eligible sole traders pay a flat 50,000 HUF a month that covers income tax and most contributions, with almost no other paperwork. The catch, since the 2022 reform, is who can use it: only full-time sole traders (egyéni vállalkozó) whose customers are private individuals, not companies. There is also an annual revenue cap and a list of excluded activities. Because most freelancers invoice businesses, KATA is off the table for them. See our KATA guide for the current eligibility and limits.
Flat-rate taxation (átalányadózás): the practical default
For most freelancers, flat-rate taxation is the go-to. The system assumes a fixed share of your revenue is business costs, so you do not have to track every expense. For most activities that share is 40%, which means 60% of your revenue is treated as taxable profit. That profit is then taxed at the usual rates: 15% personal income tax, plus an 18.5% social security contribution and a 13% social contribution tax. The regime is open up to a revenue limit of ten times the annual minimum wage, around 38.7 million HUF in 2026. Our flat-rate taxation guide goes into the detail.
The standard rules
Under the standard rules you are taxed on your actual profit, your revenue minus your real, documented expenses, at the same 15% income tax plus contributions. This takes more bookkeeping, but it wins when your genuine costs are high, more than the 40% the flat-rate regime assumes, since you deduct what you actually spend.
Which should you choose?
- KATA only really works if you are a full-time sole trader serving private individuals, for example a private tutor or personal trainer.
- Flat-rate suits most freelancers and consultants who bill businesses and do not have heavy costs.
- Standard is best when your real expenses are high, or your revenue is above the flat-rate limit.
The right choice depends on your income, your costs, and who your clients are, and it is easy to pick the wrong one. For the wider tax picture see our Hungary tax rates guide, and if you would like to speak to a tax lawyer about your situation, get in touch.
Frequently asked questions
How are the self-employed taxed in Hungary?
You choose one of three regimes: KATA (a flat monthly tax, for a narrow group), flat-rate taxation (taxed on 60% of revenue), or the standard rules (taxed on actual profit). All apply the 15% income tax plus social contributions.
Can I use KATA as a freelancer in Hungary?
Only if you are a full-time sole trader whose clients are private individuals, not companies, and you stay within the revenue cap and allowed activities. Since 2022 this rules out most freelancers, who invoice businesses.
What is flat-rate taxation (átalányadózás)?
A simplified regime where a fixed share of revenue, usually 40%, is treated as costs, so you are taxed on the remaining 60% at 15% income tax plus contributions. It is the practical default for most freelancers.
Which tax regime is best?
KATA suits sole traders billing individuals, flat-rate suits most freelancers with low costs, and the standard rules suit businesses with high real expenses. It depends on your income, costs, and clients, so advice is worth it.