Quick facts

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Hungary, located in Central Europe, has a rapidly developing economy primarily driven by manufacturing, especially in sectors like automotive, electronics, and pharmaceuticals. The country has been an attractive location for foreign investment due to its relatively low labor costs and central location. Hungary’s labor laws ensure employee protections, including comprehensive social security and health benefits.

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Employment Contracts

In Hungary, employment contracts must be written and typically apply for indefinite periods. Fixed-term contracts are allowed but are limited to 5 years, including any extensions. A valid reason is required for contract renewal, ensuring it aligns with the employer's economic interests.

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Probation Period

Probation periods in Hungary can last up to 3 months, although a 6-month probation period is permitted if outlined in a collective bargaining agreement.

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Working Hours

Standard working hours are 8 hours per day and 48 hours per week. Employees must receive at least 11 hours of rest between workdays. For on-call roles, daily hours can extend up to 24 hours, and weekly hours up to 72 hours. Collective bargaining agreements typically set the rules for work hours and rest periods.

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Vacation Days

Employees are entitled to a minimum of 20 days of paid annual leave, with additional days granted based on age:

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• Over 25 years: +1 day
• Over 35 years: +5 days
• Over 45 years: +10 daysAdditional days are granted for employees with children and in specific personal circumstances.

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Sick Leave

Employees in Hungary are entitled to 15 days of paid sick leave per year, during which they receive 70% of their normal salary. If sick leave coincides with a public holiday, payment is only made to hourly or output-based employees.

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Wages and Salary Payment

Wages are typically paid monthly by the 10th of the following month. The minimum wage in 2024 is HUF 266,800 (around EUR 600). Payments may be made via bank transfer or in cash, as stipulated in the employment contract.

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Public Holidays

Hungary observes 13 public holidays, including:

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• January 1: New Year's Day
• March 15: National Holiday
• May 1: Labour Day
• August 20: St. Stephen's Day
• October 23: National Holiday
• December 25-26: Christmas

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Employer Taxes

Employers contribute 15.5% of the employee’s salary toward social security and a 1.5% vocational contribution. These contributions cover health insurance, pensions, and other mandatory benefits.

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Employee Taxes

Employees in Hungary pay the following:

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• Personal Income Tax: 15%
• Pension Contribution: 10%
• Social Security: 7%
• Employment Contribution: 1.5%

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Notice Period

The minimum notice period is 30 days, which may extend up to 90 days depending on the employee’s length of service. Fixed-term contracts may only be terminated if there are external circumstances or performance-related reasons that justify early termination.

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Termination and Severance Pay

Employment may be terminated by mutual agreement or unilaterally by either party. Employers must provide a valid reason for termination, while employees can resign without cause. Severance pay varies with the length of employment; for example, employees with 1-2 years of service are entitled to 1 month's salary as severance if terminated without notice.