Employer of Record in Hungary

How an Employer of Record works in Hungary

Using an Employer of Record (EOR) in Hungary allows foreign companies to hire employees without establishing a local legal entity. The EOR acts as the legal employer of the new hire by providing an employment contract, handling onboarding and processing payroll in line with Hungarian regulations. The foreign company retains day-to-day responsibility for managing the employee’s work and performance.

Rivermate’s EOR services are built on three pillars:

• In-country HR experts with deep first-hand understanding of the local employment laws.
• A network of local partners providing competitive, market-relevant benefits.
• A Rivermate platform offering centralized management of every aspect of the employment relationship.

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Hungary labor market: At a glance

The hiring market
Greatest hiring activity:	Major employment hubs include the capital of Budapest but also manufacturing areas such as Debrecen and Székesfehérvár.
Hiring timelines:	Locals (all roles): 3 days once documentation is complete EU nationals: 3-5 days
Non-EU nationals: 3 months
In-demand sectors:	IT, engineering, manufacturing, shared centers and R&D facilities in Budapest.
Sectors with skills shortages:	Healthcare, social work, education, arts, entertainment, public administration, administrative and support services.

The salary market
Employer tax contributions:	13% social contribution tax on top of gross salary.
Minimum wage:	HUF 322,800 per month (HUF 373,200 for jobs requiring at least secondary education)
Average gross annual salary:	Gross HUF 9,065,400/yr (HUF 754,700/month)
Income tax brackets:	Flat 15% personal income tax rate, subject to applicable exemptions/tax benefits.

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What will it cost to hire in Hungary?

Salaries in Hungary vary across sectors and geographic regions, with common high-paying sectors typically including IT and financial services. In June 2026, average gross earnings across the whole economy were up 7.1% compared to the previous year.

Base salary

As of June 2026, the official Hungarian statistics show an average gross monthly salary of HUF 754,700. With 12 monthly payroll cycles standardly applicable, a 13th salary is not legally mandated but is becoming common practice in certain sectors. Salaries are typically paid by the 10th day of the following month. Alongside the payment of the net salary, the employer deducts and remits the employee's part of the social contributions as well as the personal income tax to the authorities on behalf of the employee.

Employer taxes and contributions

The employee social security contributions in Hungary are deducted from the employee’s gross salary at a rate of 18.5%. However, employers should budget for a 13% social contribution tax (szociális hozzájárulási adó, or SZOCHO) on top of gross salary.

Statutory benefits

Hungary has a number of required statutory benefits that must be provided to employees working in the country. The standard weekly working time is generally set at 40 hours, spread into 5 working days. Statutory premiums and benefits, among others, include:

• Overtime pay: Permitted under certain conditions and subject to a premium of 50% if worked on a regular workday or 100% if worked on a rest day. Compensatory time off may be provided instead of the premium or may reduce the premium payable. An annual maximum limit of 250 hours of overtime applies. Under a special collective bargaining agreement and through a written voluntary agreement, this limit can be extended.
• Nighttime pay: Work during nighttime (22:00-06:00) is generally subject to a premium of 15% unless already paid under a shift-work schedule.
• Annual leave: Minimum of 20 days per year. This basic entitlement increases with age and can reach up to 30 days of leave for workers older than 45. Generally, an employee should take 14 consecutive calendar days of leave at a time.
• Paid sick leave: Subject to a medical certificate, the first 15 working days of sick leave in a calendar year are paid by the employer, typically at a rate of 70% of average earnings. After the 15th day, the sick pay is paid by the social security system, at a rate ranging from 50%-60%.
• Maternity leave: 24 weeks, paid by the social security system at a rate of 100% of the average earnings, subject to eligibility.
• Childcare leave: Various types of leave available, often with state pay.

Additional benefits

In addition to mandatory benefits, employers often offer a range of supplementary benefits in order to enhance compensation packages. While benefits packages vary across industries and companies, they frequently include private health insurance, voluntary private pension, meal allowances, transportation support and sports and wellness benefits.

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Calculate employment costs

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Case Study: Rivermate helps a software company retain a key developer in Hungary

A Netherlands-based software company had come to Rivermate with a challenge: retaining a key developer that had relocated to Hungary for personal reasons. The company had to choose between finding a way to keep him employed legally from Hungary, or lose him. Setting up a legal entity in Hungary would have taken months and created ongoing overhead disproportionate for a single hire. The pressure was real: the developer was a key contributor, and the window to find a workable solution was short.

Ultimately, Rivermate was the chosen EOR due to its flexibility, cost structure and the quality of the working relationship. Since that first hire, Rivermate has employed more than five people for the company in Hungary.

Read the full customer story

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What hiring in Hungary really looks like

Overall: 🟡 Moderately challenging

Easier to navigate	More challenging to navigate
🟢 Overall talent availability	🔴 Onboarding documentation and paperwork
🟢 Language skills - English, German, French, Italian, Dutch and Nordic.	🔴 Employment laws and labor disputes
🟡 Sustained wage growth (7% y-o-y) and growing importance of benefits.	🔴 Monthly payroll tax clearance and application of family allowances

Hungary has a unique labor market which places importance on job security, work-life balance and competitive compensation. When hiring Hungarian employees, challenges typically arise from navigating employment requirements, administrative procedures and steadily rising employment costs, particularly in high-demand sectors.

For an international employer considering hiring in Hungary, the main advantages are the strong talent pool, multilingual capabilities and competitive costs compared to Western Europe. Despite rising costs, it still offers a good balance between employer costs and the availability of skilled talent. IT, engineering, automotive, shared services and R&D are particularly active sectors with significant competition, thus requiring careful compensation considerations.

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What employers must know about onboarding documentation in Hungary

Employers must register any new employee with the authorities before the employee can commence work. Hungary’s documentation requirements during onboarding are quite extensive when compared to other countries, with each new hire requiring the provision of the employee’s tax card, social security card, address and the employee’s mother's name, which are all required for the registration procedure.

Any mistakes or inconsistencies between documents may stall the onboarding process and may require the employee's direct involvement, including a visit to the authorities (tax or immigration), if needed. Should an employee’s social security number be incorrect or missing, the registration procedure may be significantly delayed.

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What you should know when hiring expats in Hungary

As an EU country, Hungary does not require EU/EEA nationals to obtain a work permit. An extra registration step is required before onboarding but typically takes no longer than a few days.

Third-country nationals generally require an appropriate residence permit that allows employment. Depending on the nationality, role and qualifications, available routes include the EU Blue Card, Hungarian Card and National Card. As of 1 January 2026, the minimum salary requirements for an EU Blue Card is gross HUF 1,001,048 per month. Certain professions with shortages (eg. healthcare) have a lower threshold requirement (HUF 800,838). All employers must ensure these salary requirements are met.

Per law, an immigration procedure should take around 21 days, but in practice it rarely takes less than 3 months. Foreign companies should note that a newly established entity may be restricted from immediately hiring third-country nationals in Hungary, which may require support from an existing EOR.

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Staying compliant when hiring in Hungary

Hungarian employment requirements are highly structured and several aspects demand particular attention.

Fixed-term contracts and probationary periods

Hungary allows fixed-term contracts for a specific period or until a particular project or task is completed. Certain restrictions are in place - a fixed-term employment cannot exceed a maximum aggregate period of five years.

A probationary period of up to three months may be agreed in writing in an employment contract. If the initially agreed probationary period is shorter than three months, it may be extended once but may not exceed the maximum of three months. During the probationary period, both parties may terminate the employment without notice or justification but should do so in writing.

Remote work documentation

Remote work is permitted and generally governed by the Labor Code in Hungary. The remote work arrangement must be agreed in writing, should specify the remote location as well as any working arrangements. Statutory rules on working hours, rest periods and overtime apply as in the case of on-site workers, while employers are generally responsible for either providing or reimbursing equipment expenses and ensuring health and safety requirements are met.

Monthly payroll tax declarations

Foreign companies are often surprised by the complexity of monthly payroll declarations, which are mandatorily submitted to the National Tax and Customs Administration (NAV) by the 12th day of the following month. When there are any non-standard payments (such as bonuses or expenses), there can be delays in declarations being cleared by the authorities.

Terminations

Terminations and offboarding in Hungary are a highly regulated process requiring detailed understanding of local legislation requirements. Depending on the grounds for termination and the duration of the employee’s service, both severance and notice requirements vary.

In terms of notice requirements, the minimum notice period is 30 days, but it can extend up to 90 days for an employee with a tenure exceeding 20 years. The table below summarizes the minimum notice period requirements:

Length of service	Minimum notice period
Less than 3 years	30 days
3-5 years	35 days
5-8 years	45 days
8-10 years	50 days
10-15 years	55 days
15-18 years	60 days
18-20 years	70 days
20+ years	90 days

While a longer notice period can be defined in the individual employment contract, the above periods are the statutory minimum.

Certain separation scenarios - primarily employer-initiated terminations such as redundancy - require the payment of severance. Subject to the length of service with the terminating employer (a minimum of three years of service is required), the total severance amount depends on the service duration and can range from one to nine average monthly salaries (maximum six average monthly salaries for employees with 25+ years of service plus maximum additional three average monthly salaries for workers terminated within five years of retirement).

Other termination options include unilateral employer-initiated terminations (due to misconduct, inability to perform job), mutual terminations and resignations. Employer-initiated terminations require detailed justification of the grounds for termination, a formal notice delivery process and have certain restrictions during certain leave periods (sick leave, maternity leave etc).

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Benefits of hiring employees through an EOR in Hungary

If you are considering hiring in Hungary or have already found your ideal candidate, setting up your own legal entity in Hungary may be something you are actively thinking about. However, this will require you to navigate through complex administrative onboarding processes, compliantly process payroll and risk labor disputes. Additionally, a newly-setup company may face certain restrictions in immigration procedures.

An EOR, like Rivermate, is an alternative option. Rivermate can hire your employees in Hungary using an existing entity and with local expert knowledge. With Rivermate managing the whole process from onboarding to offboarding and ensuring alignment with complex Hungarian laws, it allows foreign companies to focus on their core business.

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Ready to hire in Hungary?

If you have already found your next employee in Hungary, talk to a Hungary Hiring Expert. Rivermate will handle the complexities so you can hire with confidence.

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Sources:
EURES: Labor Market Information Hungary
Hungarian Central Statistics Office: June 2026 average gross earnings
Hungarian Labor Code 2012 (69. § on notice periods, 45. § on probationary periods, 116-120. § on annual leave)
PwC: Hungary individual taxes
National Directorate-General for Aliens Policing: EU Blue Card