When a company sets aside budget to reward the team, the reflex answer is a pay rise. But the same budget is not worth the same in every form – neither for the company nor for the employee. Let us look at it objectively.
The cost side: a difference of more than 20%
If we want HUF 100,000 of value to reach the employee, as salary – grossed up – it costs the company HUF 169,925; as group health insurance, HUF 133,040. The reason is taxation: salary carries a burden of nearly 70%, group insurance 33.04%, borne by the company alone. The ratio holds at any budget level – see our taxation article for the full breakdown.
The value side: what does the team remember?
A raise matters – but within months it becomes the new normal and its motivational effect fades. Health insurance works differently: it delivers its value again at every appointment and every screening. Anyone who has waited months for a scan knows exactly what it is worth to be seen within days through their employer.
What salary cannot do
- Screening: prevention is tangible care – and early detection means fewer lost days for the company too.
- It relieves the family budget: what the colleague used to spend on private care stays in their pocket.
- It covers colleagues who would struggle to get individual insurance – there is no individual underwriting in a group.
- Employer brand: a private healthcare package is a genuine differentiator in job ads today.
When is a raise still the better answer?
Honestly: if salaries lag the market, fix that first – benefits cannot compensate for a pay gap. Health insurance works best on top of competitive base pay, as the budget’s „next forint". The two are not rivals: the question is always where that next forint produces more.
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