Local Providers
We can Determine the top Payroll solutions in Hungary locally for you
Global Providers
Expand your business & relocate employees to Hungary using top global
PEO / EOR providers
Overview
Florin (HUF)
CURRENCY
Budapest
CAPITAL
monthly
PAYROLL FRECUENCY
11
PUBLIC HOLIDAYS
0 to 13
EMPLOYER TAXES
13TH / 14TH SALARY
The 13th Salary in this region is usual and typically given at the end of the year.
Employee and employeer taxation in Hungary
- 13%
Social Contribution Tax
0% - 13%
Total Employment Cost
Employee
Worker Payroll Contribution
- 7%
Health care contribution
- 1.50%
Pension fund
- 10%
Unemployment Fund
0% - 18.5%
Total Employee Cost
Employee Income Tax in Hungary
Employment Income Tax
15%
Flat rate (Personal income tax does not apply to employees under 25 years of age)
Minimum Wage in Hungary
General
Through payroll outsourcing, you can pay the minimum salary in the country, which is 200,000 HUF for unskilled labor. In contrast, the minimum wage for unskilled labor is 260,000 HUF. Yet, collective contracts can also establish a minimum wage.
$570 Minimum Wage per month
Payroll Contributions in Hungary
Payroll Cycle
The Employer of Record in Hungary will allow you to comply with the monthly payroll cycle. In addition, the employer must pay the monthly salary on the last day of the month but may do so before the 10th of the next month.
13th Salary
In Hungary, this payment is not compulsory but an employer may pay bonuses at its will.
Employee Benefit in Hungary
- Individual or season tickets for sporting events
- Holiday gift cards
- Meal allowance
- Mobile phone allowance
- Car allowance/reimbursement.
Visa and work permit in Hungary
With contractor management services, you can apply for visas for foreign citizens who want to work in Hungary. The country offers the following work permits:
- Individual work permit. This is for foreign nationals who want to work in the country for no more than 90 days out of 180 days.
- Joint work permit. In this case, it is for foreign citizens who want to work in Hungary for more than 90 days within 180 days.
- Residence permits. This allows a person to reside in Hungary for up to 90 days.
- Single application procedure. For non-EEA citizens who wish to reside in Hungary for more than 90 days within 180 days. Furthermore, a person can only apply for this permit through an employment relationship with a Hungarian employer.
Types of Visas
- Long-Stay Visa (D). In this case, it is for citizens who want to stay in the country in the long term since it works as a pre-approved residence permit.
- Working Schengen visa. This visa is for short-term employment opportunities.
- Schengen Business Visa. For non-EEA citizens who wish to temporarily travel to a Schengen area. Likewise, this visa allows single or multiple entries. It also allows holders to stay for 90 days within 6 months.
- Seasonal Employment Visa. In this case, it is for foreign citizens who wish to work in agriculture, animal husbandry, or fishing. However, it only allows the applicant to work for 180 days.
- EU Blue Card. This visa requires that a qualified community worker be able to work in the country. But you must reside in the EU countries and apply for a residence permit. Thus, the applicant must certify that he has legally stayed in a member state for at least 18 months.
With these permits, you will be able to hire and onboard workers in Hungary, as this residence permit is valid for up to 3 years. Likewise, the work permit is valid for 2 years but the visa can be valid for 1 year.
VAT in Hungary
In Hungary, the standard sales tax rate is 27.00%.
Working Hours in Hungary
General
Hungarian employees must work 8 hours a day regularly, for 5 days to total 40 hours a week.
Overtime
Labor contracts and collective agreements set overtime, which is what exceeds regular hours. In addition, overtime or work on holidays is limited to 72 hours per week. Likewise, the hours of work for minors also have a limit.
With the Employer of Record in Hungary, you can pay overtime at 150% of the base salary of the worker. However, if an employee works overtime on weekends and holidays, they must receive 200% of the base salary.
Working Week
Monday to Friday.
Employee Termination in Hungary
Termination Process
With International PEO Services, you can manage the termination of the contract. In this case, an employer can terminate the fixed-term contract for business, personal, or employment misconduct. However, the employer must notify the employee and explain the reasons for the termination in writing.
Besides, if the reason is the misconduct of the worker, the employer must issue a warning and the worker may explain.
Furthermore, when the employment relationship ends by notice, the worker must receive the payment no later than 5 days before the termination date.
Notice Period
The employer of record in Hungary can manage the notice period which is usually 30 days. However, if the employer terminates employment, he must extend this period according to the years of service:
- 3 years of service require an additional 5 days of notice.
- 5 years of service require an additional 15 days of notice.
- 8 years of service require an additional 20 days of notice.
- 10 years of service require an additional 25 days of notice.
- 15 years of service require an additional 30 days of notice.
- 18 years of service require an additional 40 days of notice.
- After 20 years of service, an additional 60 days of notice is required.
Likewise, the employee and the employer can agree on a 6-month extension.
Severance Pay
If an employer terminates the contract for operational reasons, it must compensate the employees for the dismissal. In this case, the minimum amount of compensation is 1 month of salary and the maximum is 6 months of salary. This is determined by the employment contract.
Probation Period
After the employee onboarding, the trial period cannot exceed 3 months. Thus, if this period is less than 3 months, the parties can extend it only once but not for more than the time limit.
Employee Leaves in Hungary
Paid Time Offs
In Hungary, all employees are entitled to 20 days of paid vacation each year. However, this leave rises to 30 days for workers over 45 years of age. Additionally, employees with children under the age of 16 may receive additional vacation as follows:
- Two days of work for 1 child.
- Four days of work for 2 children.
- Seven days of work for 3 children.
Nevertheless, if the employee has a child with a disability, the extra vacation days increase by 2 more. Additionally, either parent has the right to request this extra vacation time. Also, after the birth of 1 child, the father may receive 5 additional vacation days or 7 days if they are twins. However, you can only take them until the end of the second month from the date of birth.
Public Holidays
There are 11 national holidays throughout the year.
Vacation Holidays
There are 20 vacation holidays throughout the year.
Sick Days
With global employment outsourcing, you will be able to grant 15 days of sick leave to an employee. Thus, an employee must receive a payment of 70% of the average salary of 6 months before the leave. Similarly, if the illness continues after the leave period, the employee is entitled to up to 1 time off. Likewise, this applies in the case of an accident at work, which can be for an unlimited period.
Moreover, the payment consists of 1/3 by the employer and 2/3 by the National Health Insurance Fund.
Paternity Leave
The international PEO can manage this permit which consists of 5 paid days. Though it is increased to 7 days for multiple or complicated delivery and the employee must take it for two weeks after delivery.
Paternal Leave
After ending the maternity leave, either parent can take this leave until the child turns 2 years old. Thus, a worker receives 70% of his regular salary or a maximum payment of twice the minimum wage. Similarly, employees with children under the age of 16 may receive extra vacation as follows:
- Two days of work for a child
- Four days of work for two children.
- Seven days of work for three children
Other Leave
The Hungarian employment law does not provide for any other type of leave. However, companies usually grant 2 days of leave for the death of a close relative.
Maternity Leave in Hungary
Women can receive 24 weeks of maternity leave, although they can extend it up to 3 years. In this case, through the Employer of record in Hungary you can manage and pay maternity benefits.
In this way, mothers are entitled to receive the Pregnancy and Childbirth Benefit (CSED) at 70% of their salary for 6 months. Besides, from the next 18 months until the second year of the child, mothers receive the Child Care Fee (Gyermekgondozási díj - GYED). This consists of 70% of the regular salary up to double the salary.
Parents or grandparents can also receive the Family Child Care Allowance (Gyermekgondozási segély – GYES). In this case, it is the Hungarian National Health Insurance Fund (NEAK) that pays these benefits.
There are 168 leave throughout the year.