Guide to employment, payroll and benefits in

Hungary

Rivermate offers complete payroll, benefits and compliance services for

Hungary

01. Overview

Last updated: 

August 19, 2021

Currency
Hungarian Forint
Capital
Budapest
Ease of doing business
73.4
Language
Hungarian
Population
9660351
GDP growth
3.99%

02. Grow your team in

Hungary

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Hungary

, particularly if you don't have established local relationships. You can hire employees in

Hungary

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Hungary is a Central European republic. It is bordered on the north by Slovakia, the northeast by Ukraine, the east and southeast by Romania, the south by Serbia, the southwest by Croatia and Slovenia, and the west by Austria. Hungary is a country in the Carpathian Basin that spans 93,030 square kilometers and has a population of ten million people. The official language, Hungarian, is the world's most widely spoken Uralic language and one of Europe's few non-Indo-European languages. The capital and largest city of Hungary is Budapest; other major cities include Debrecen, Szeged, Miskolc, Pécs, and Gyr. Various peoples, including Celts, Romans, Germanic tribes, Huns, West Slavs, and Avars, populated the area of modern-day Hungary for millennia. With the conquest of the Carpathian Basin by Hungarian grand prince rpád in the late ninth century AD, the foundations of the Hungarian state were laid. In the year 1000, his great-grandson Stephen I ascended the throne, transforming his kingdom to a Christian one. Hungary became a regional force by the 12th century, achieving its cultural and political pinnacle in the 15th century. It was partly occupied by the Ottoman Empire after the Battle of Mohács in 1526. Hungary was ruled by the Habsburgs at the turn of the 18th century, later entering the Austrian Empire to create Austria-Hungary, a major force until the early 20th century. After World War I, Austria-Hungary collapsed, and the Treaty of Trianon formed Hungary's current boundaries, resulting in the loss of 71% of Hungary's territory, 58% of its population, and 32% of ethnic Hungarians. Hungary entered the Axis Powers in World War II after a turbulent interwar era, suffering major damage and casualties. Hungary became a Soviet satellite state after WWII, resulting in the creation of the Hungarian People's Republic. Hungary became a comparatively freer, but still repressive, member of the Eastern Bloc following the failed 1956 revolution. The fall of the Eastern Bloc, and later the Soviet Union, was hastened by the destruction of Hungary's border fence with Austria. Hungary became a democratic parliamentary republic on October 23, 1989. Hungary became a member of the European Union in 2004 and of the Schengen Area in 2007. Hungary is a middle force in foreign relations, owing to its cultural and economic clout. It has a high-income economy and ranks "very high" on the Human Development Index, with universal health care and free secondary education for its residents. Hungary has made important contributions to the arts, music, literature, sports, science, and technology for many years. In 2017, it was Europe's thirteenth most popular tourist destination, with 15.8 million foreign visitors. It is a member of the United Nations, NATO, the World Trade Organization, the World Bank, the IIB, the AIIB, the Council of Europe, and the Visegrád Group.

04. Public holidays

05. Types of leave

Paid time off

Any employee is entitled to at least 20 paid holiday days a year. Starting at 25, the number of annual holiday days increases by one day per three years in their twenties, then every two years in their thirties and forties.

Public holidays

In Hungary, there are 11 public holidays, but it is customary to give extra days, such as the second St Stephen's Day, in order to have a longer weekend.

Sick days

Employees are entitled to 15 days of maternity time each year, which is paid at 70% of their wages by the employer.Payments begin at the 16th day and range from 50% to 60% based on the length of service. The company pays 1/3 of the bill, while the National Health Insurance Fund pays the other two-thirds.

Maternity leave

Women are entitled to 24 weeks of maternity leave, but they will take up to three years off while still receiving maternity benefits. Mothers are entitled to a 70 percent Pregnancy and Confinement Benefit (CSED) for the first six months of their pregnancy.Mothers are entitled to a Child Care Fee (Gyermekgondozási dj – GYED) for the next eighteen months, or before their child turns two, at a cost of 70% of their earnings, up to a limit of twice the minimum wage.For parents or grandparents caring for a child under the age of three, a payment called Child Home Care Allowance (Gyermekgondozási segély – GYES) is eligible.The services are provided by Hungary's National Health Insurance Fund (NEAK).

Paternity leave

Fathers are entitled to five days of paid leave after the birth of their child, which they may take in one or more installments before the end of the second month after the birth. The Hungarian State Treasury reimburses the contractor for any wages and taxes earned during this duration of supplemental leave.

Parental leave

After the maternity leave is over, one adult will take parental leave before the infant is two years old. This leave is paid at a 70 percent premium, at a maximum of twice the minimum day wage.Furthermore, one parent is entitled to extra paid vacation time:For one boy, an extra two days are available.For two girls, an extra four days are available.If you have more than two children, you will be given an extra seven days.This extra time off is allowed before the kid hits the age of sixteen.

Other leave

06. Employment termination

Termination process

Both the employee and the employer must provide termination in writing and include a cause for dismissal that is justified.

Notice period

During probation, you can be terminated at any time. A temporary (fixed-term) contract ends when the period expires. A 30-90-day notice period is required when terminating a permanent contract.

Severance pay

Severance pay ranges from one to nine months, based on the duration of employment and age of the employee. Severance pay is entitled in the following situations: termination by the employer, dissolution of the employer without succession, and if the transferee employer is not covered by the labor law during a transformation as a legal succession or business transfer.

Probation period

Probation period is optional and cannot exceed 3 months.

07. Working hours

General

In Hungary, the standard work week is up to eight hours per day, five days a week.

Overtime

Employees are permitted to work a maximum of 250 hours of overtime per year. Weekly overtime hours are compensated at a rate of 150 percent. Weekends and bank holidays are compensated at a rate of 200 percent.

08. Minimum wage

General

The minimum wage in Hungary is set at 167,400 HUF. However, when the job requires secondary educational and vocational qualifications, the guaranteed minimum wage is 219,000 HUF.

09. Employee benefits

General

Hungary offers comprehensive medical coverage to all citizens, with payroll contributions serving as one source of funding. Certain groups, such as the unemployed and pensioners, are compensated by the government.

Employers in Hungary will occasionally provide additional private health care coverage. The most common non-wage benefits are meal vouchers and other non-wage benefits. The annual limit for non-wage benefits with a 35.7 percent tax liability is HUF 450,000. Non-wage tax benefits in excess of HUF 450,000 are subject to an overall tax liability of 51.17 percent.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Hungary

to hire a team takes time, money, and effort. The labor law in

Hungary

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Hungary

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Hungary

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Hungary

via our Employer of Record / PEO solution.

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