Employer of Record in Hungary

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Rivermate's Employer of Record (EOR) solution helps companies hire remote employees in Hungary . We take care of global payroll, taxes, benefits, compliance and HR activities. So you can focus on growing your business. Our Employer of Record (EOR) solution is beneficial to companies that want to hire remote employees in a breeze. On this page you will find employment information for Hungary.

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1. Grow your team in Hungary with Rivermate as your Employer of Record (EOR) / PEO

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 Employer of Record (EOR) solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

2. Summary

Hungary is a Central European nation that is landlocked. It is surrounded by Slovakia to the north, Ukraine to the northeast, Romania to the east and southeast, Serbia to the south, Croatia and Slovenia to the southwest, and Austria to the west, spanning 93,030 square kilometers (35,920 square miles) of the Carpathian Basin. Hungary has a population of over 10 million people, most of whom are ethnic Hungarians with a sizable Romani minority. Hungarian, the official language, is the world's most extensively spoken Uralic language and one of Europe's few non-Indo-European languages. Budapest is the capital and biggest city of Hungary; other notable cities include Debrecen, Szeged, Miskolc, PĂ©cs, and Gyr.

For millennia, the land of modern-day Hungary has served as a crossroads for many peoples, including Celts, Romans, Germanic tribes, Huns, West Slavs, and Avars. The conquest of the Carpathian Basin by Hungarian grand prince rpád in the late 9th century AD laid the groundwork for the Hungarian kingdom. In 1000, his great-grandson Stephen I rose to the throne, transforming his empire into a Christian state. Hungary had become a regional power by the 12th century, reaching its cultural and political zenith in the 15th century. It was largely captured by the Ottoman Empire (1541–1699) after the Battle of Mohács in 1526. Hungary was ruled by the Habsburgs at the start of the 18th century, subsequently joining the Austrian Empire to create Austria-Hungary, a prominent power until the early 20th century.

After World War I, Austria-Hungary fell apart, and the Treaty of Trianon created Hungary's present boundaries, resulting in the loss of 71 percent of its land, 58 percent of its people, and 32 percent of ethnic Hungarians. After a turbulent interwar era, Hungary joined the Axis Powers in World War II, incurring tremendous damage and losses. Following World War II, Hungary became a Soviet Union satellite state, resulting in the foundation of the Hungarian People's Republic. Following the failure of the 1956 revolution, Hungary became a more liberal, but still oppressive, member of the Eastern Bloc. The demolition of Hungary's border barrier with Austria hastened the fall of the Eastern Bloc and, later, the Soviet Union. Hungary reverted to a democratic parliamentary republic on October 23, 1989. Hungary became a member of the European Union in 2004 and has been a member of the Schengen Area since 2007.

Hungary is considered a medium power in international affairs, due mostly to its cultural and economic clout. It is a developed nation with a high-income economy that ranks 40th on the Human Development Index, with inhabitants receiving universal health care and free secondary education. Hungary has made important contributions to the arts, music, literature, athletics, science, and technology for a long time. It is Europe's tenth most popular tourist attraction, with 15.8 million foreign visitors in 2017. It is a member of a number of international organizations, including the EU, the Council of Europe, NATO, the United Nations, WHO, the World Trade Organization, the World Bank, the IIB, the AIIB, and the Visegrád Group.

Hiring talented employees in a short span is not an easy task. Partnering with an Employer of Record (EOR) like Rivermate in Hungary is your best option, giving your organization enough time to focus on other aspects of international expansions like project management and inventory management. The EOR takes care of all the compliance and legal issues while helping you speed up hiring using their knowledge of domestic employment practices and virtual onboarding tools. Top EORs also have provisions for the e-signing of documents to enable faster onboarding.

3. Public holidays

4. Types of leave

There is no information about the types of leave for this country.

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

5. Employment termination

There is no information about employment information for this country.

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.

Probation period

Probation period is optional and cannot exceed 3 months.

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.

6. Working hours

There is no information about the working hours for this country.

General working schedule

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


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.

7. Minimum wage

There is no information about the minimum wage for this country.

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.

8. Employee benefits

There is no information about the employee benefits for this country.

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.

9. Taxes

There is no information about the taxes for this country.

Corporate tax

The corporate tax rate is harmonized at 9%, the lowest in the European Union. Dividends received are not taxed if they are not obtained from a Controlled Foreign Company (CFC). Capital gains are subject to corporation taxation, with some exceptions.

Individual income tax

In Hungary, income tax is imposed at a flat rate of 15%. A tax allowance is provided in the form of a family allowance (Hungarian: családi adókedvezmény), which is the allowance multiplied by the number of "beneficiary dependent children." The stipend for one or two children is HUF 62,500 per kid, and for three or more children, it is HUF 206,250 per child. The allowance may be divided among couples or life partners.

Employer social security payments are levied at a fixed rate of 17.5 percent on employment income. Capital gains are taxed at a fixed rate of 15%.

VAT, GST and sales tax

The normal VAT rate is 27 percent, the highest in the European Union. Most medications and certain food items are taxed at 5%, while internet connections, restaurants and catering, dairy and bread products, hotel services, and entry to short-term open-air events are taxed at 18%.

10. VISA and work permits

There is no information about VISA and work permits for this country.

Work permits for foreign people entering Hungary to work include an individual work permit, a joint work permit, a residency permit, and a single application process work permit.

Individual work permits are issued to foreign nationals who want to work in Hungary for no more than 90 days in a 180-day period.

A joint work permit is required for foreign nationals who want to work in Hungary for more than 90 days in a 180-day period.

Residence permits allow you to stay in Hungary for up to 90 days.

Non-EEA citizens who seek to stay in Hungary for more than 90 days within 180 days must use a single application process. An employee may only apply for this form of permit if they have a working connection with a Hungarian employer.

A Long Stay Visa, a Working Schengen Visa, a Schengen Business Visa, a Seasonal Employment Visa, and an EU Blue Card are all available in the nation.

A Long Remain Visa (D) is for people who want to stay in Hungary for an extended period of time and serves as a pre-approved residence permit.

A Working Schengen Visa is a kind of visa that is used for short-term job possibilities in the Schengen area.

A Schengen Business Visa is intended for international, non-EEA citizens who desire to visit the Schengen region on a temporary basis. This visa is valid for a single or numerous entries. It permits holders to remain for up to 90 days in a six-month period.

A Seasonal Employment Visa is available to foreign nationals who want to engage in agriculture, animal husbandry, or fishing. This permits the candidate to labor for a maximum of 180 days.

An EU Blue Card is for a highly skilled non-EU worker who is resident in an EU-member nation and has obtained a residence permit. To be eligible for this card, the foreign person must have spent at least 18 months lawfully in a member country.

A residency permit is valid for a period of up to three years. A work permit is valid for two years, but a visa is only good for one year.

11. Employer Of Record service terms

There is no information about the Employer of Record (EoR) service terms for this country.

Employment contracts

A written employment contract is required. If the contract is meant to be for a definite duration, it must include the employee's base pay, job function, location of work, and term. Any probation term must be specified in writing in the contract.

With Rivermate being your Employer of Record (EoR) in Hungary, you do not have to worry about the employment contracts, as we take care of that.

Minimum assignment length

Contracts for employment may be indefinite or fixed-term, with a maximum period of five years. A fixed-term contract's term might alternatively be the completion of a specified job rather than a predetermined length of time. A probationary term of no more than three months, including any extensions, is permitted.

Payment currency

Hungarian Forint (HUF)

Euro (EUR)

13.Opening a subsidiary in Hungary

There is no information about the working hours for this country.

How to set up a subsidiary

The procedure of establishing a subsidiary in Hungary is determined by your business considerations and the legislative framework that applies to your firm. Subsidiary laws in Hungary might vary based on your sector, the type of your firm, your nationality, and other factors. We suggest outlining the kind of company you want to run in Hungary to discover what the incorporation procedure entails.

Hungary also has a number of laws and regulations that control enterprises, including Act XLV of 2004, Act X of 2006, Act V of 2013, Act CCXXXII of 1997, and others. The regulatory framework also varies depending on the kind of Hungary subsidiary you establish. You may form a general (unlimited) partnership, a limited partnership, a limited liability company (LLC), a private company limited by shares, a public company limited by shares, a branch office, or a commercial representative office.

Because of the advantages to all parties involved, many businesses form as an LLC. The following actions are required to establish a Hungary subsidiary as an LLC:

1. Obtaining legal counsel from a legal expert in Hungary

2. Using a locally based legal firm to register

3. Opening a bank account in your home country

4. Depositing at least 50% of the share capital

5. Filing an application with the Registration Court and passing muster with the Tax Authority

6. Registration for the local business tax with the Municipal Tax Department and the Hungarian Chamber of Commerce and Industry

7. Registering with the National Office of Health Insurance for social security benefits

Subsidiary laws

Hungary's subsidiary regulations differ depending on where you are in the nation and the form of your company. LLCs may be formed with only one member, however members cannot be found via public offers. The quantity of capital contributed by each member limits their liability.

If the law requires it and you have more than 200 full-time workers each year, you must create a supervisory board. To administer the subsidiary's day-to-day activities, all LLCs need at least one managing director. In most cases, the expenses of incorporating in Hungary are higher than in other nations, since you will require 500,000 HUF in initial capital. A registration fee of 100,000 HUF is also required.

13. Why choose Rivermate as your Employer of Record / PEO in Hungary

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 (EOR) 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 (EOR) / PEO solution.

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