Explore our EOR & PEO services in HUNGARY

As your EOR in Hungary, we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.

Your candidate is hired by a PEO in Hungary provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.

Central Europe

Country Overview

Hungary is a country in Central Europe. It shares borders with Slovakia, Ukraine, Romania, Serbia, Croatia, and Slovenia. The country has an area of 93,030 sq km and a population of 9 million. Hungary is a unitary parliamentary republic and a member of the European Union and NATO.

The economy of Hungary is developed and diversified with an advanced industrial sector. The service sector contributes more than 60% to the country’s GDP, while the industry accounts for around 30%. Agriculture contributes only about 3% to the nation’s GDP. The nation has been experiencing economic growth at an average rate of 4% over the past decade.

General Information

Population: ~10.000.000

Capital City: Budapest (population: ~1.700.000)

GDP: ~$409 billions

GDP per capita: ~$42.726

Currency: Forint (HUF)

Unemployment: ~4.12%

Employer Taxes: 13%

Employee Taxes: from 15%

HUNGARY EOR SPECIFICS

Employment contracts in Hungary

Employment contracts and additions must be in writing. Employment contracts usually last for an indefinite period of time, but can be written for a definite term with the employer’s legitimate economic interest. The term may not exceed 5 years and cannot be extended more than once.

Probation period in Hungary

A probationary period may be specified in a contract for up to three months, or up to six months in the case of a collective bargaining agreement.

Working hours in Hungary

Employees are limited to no more than twelve or forty-eight hours of work per day or week respectively. For stand-by jobs, the limits on working hours are 24 or 72 hours per week. If actual working time cannot be measured, the entire period of on-call duty must be considered working time. The limits on working hours, the work regime, and rules governing working time arrangement are established by collective bargaining agreements or employer policies in the absence thereof.

Vacation days in Hungary

Employees are entitled to leave in each calendar year worked, based on how long they have been working. Leave comprises primary and supplementary leave. The standard length of basic leave is 20 working days. Employees are also entitled to more extended extra leave in the year in which they reach a specific age.

Sick leave in Hungary

Employees may take fifteen days of sick leave per calendar year, during which time they receive 70% of their standard pay. If the sick days fall on a public holiday, employees paid hourly or output are not entitled to any absence pay.

Wages and Salary Payment in Hungary

Wages must be paid each month not long after the tenth day of the following month. If a salary cannot be calculated until later—for example, if it is based on performance—half of the base wage is due as an advance before the end of the month. Wages may be paid in cash or by electronic transfer to an employee’s bank account.

The minimum wage in Hungary was ~€542 per month as of 2022, equivalent to €6,500 per year. This was an increase of 32,600 Hungarian forints per month (~20%) from the previous year’s level.

Public Holidays in Hungary

Employees do not have to work on legal public holidays, which are:

1 January, New Year’s Day
15 March, commemoration of the revolution in 1848
Good Friday, (movable)
Easter Monday, (movable)
1 May, Labor Day
Whit Monday, (movable)
20 August, St. Stephen’s Day
23 October, commemoration of the revolution in 1956
1 November, All Hallows’ Day
24 of December, Christmas Eve, “short day”
31 December New Year’s Eve, “short day”
25 and 26 December 1st and 2nd day of Christmas

A 100 % wage supplement is payable for work performed on a legal public holiday, on Easter or Whit Sunday or on a Sunday which would otherwise be a legal public holiday.

Employer Taxes in Hungary

Social contribution tax: 15.5%

Vacational contribution: 1.5%

Employee Taxes in Hungary

Personal income tax: 15%

Pension contribution: 10%

Social security contribution: 7%

Employment contribution: 1.5%

Notice Period in Hungary

The notice period is a minimum of 30 days, which can be extended to 90 days, depending on the employee’s tenure. The parties may agree on a longer notice period not exceeding six months.

Termination / Severance in Hungary

Most terminations of employment are based on mutual agreement. Employers must provide a reason for terminating the contract, which must be realistic and rational. Employees may terminate their contracts and do not need to give a reason. In all cases, both parties must provide a substantial and verified basis when terminating with immediate effect.

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