hungary

Hungary

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Minimum wage

What are the minimum wage requirements?

The minimum wage in Hungary is 200,000 HUF for unskilled labor and 260,000 HUF for skilled labor. Minimum wages may also be set within collective bargaining agreements.

Contributions & Taxes

How much are the contributions & taxes?

The employer’s contribution rate (so-called ‘social tax’) is 13% (the rate of social tax has been reduced from 15% to 13%, additionally the 1.5% vocational training fund contribution has been abolished from 1 January 2022). The employees’ social security contribution rate is 18.5%

Employer

Employers pay a 15.5 percent social tax on gross salary. Hungarian resident employers also pay a 1.5 percent contribution to the training fund. All contributions are uncapped. Employees pay a 18.5 percent uncapped social security contribution.

Corporate

The corporate income tax rate is 9%. Surtax: Various surtaxes are levied at a range of rates on financial institutions and financial transactions; telecommunication services; and insurance, retail, and energy companies.

Employee

In Hungary, the average single worker faced a net average tax rate of 33.5% in 2020, compared with the OECD average of 24.8%. In other words, in Hungary the take-home pay of an average single worker, after tax and benefits, was 66.5% of their gross wage, compared with the OECD average of 75.2%.

Income Tax

Hungary has a personal income tax rate of 15% of the tax base. For resident taxpayers, the tax base is their whole income, while in the case of non-resident taxpayers it represents their locally taxable incomes.

Payroll

What is the payroll cycle?

In Hungary, the payroll frequency is monthly. Work between the first and last day of the month is typically paid on the last day of the month but must be paid for by the 10th of the following month.

Is there 13th salary in Hungary?

In Hungary, a 13th-month salary is not mandatory. However, an employer can pay bonuses at the employer’s discretion.

Labor Rules

Probation period rules

In the Hungarian employment contract, the parties may stipulate a probation period of not more than three months from the date of commencement of the employment relationship. In the event that a shorter probationary period has been stipulated, the parties may extend the probation period once.

Notice Period 

The notice period is 30 calendar days, which can increase up to 90 days depending on time spent in employment. The parties may agree on a different duration of notice period, but not for longer than six months.

Severance Period

The notice period is 30 calendar days, which can increase up to 90 days depending on time spent in employment. The parties may agree on a different duration of notice period, but not for longer than six months.

Working Hours

In Hungary, most people work Monday through Friday, 8 hours a day. The 8 hours are usually from 8 a.m. to 4 p.m. or from 9 a.m. to 5 p.m. Saturday and Sunday are rest days for most of the population.

All work above the standard working hours is paid as overtime and regulated by employment contract/collective agreements. When an employee is requested to work overtime or work on holidays, there is a limit of 72 hours a week; there are also different maximum working hours for minors.

Overtime hours of more than 40 hours a week are paid at 150.00% of the employee’s basic salary rate.   Overtime hours worked on weekends and public holidays are paid at 200.00% of the employee’s basic salary rate.

Leave and Benefits

Leave and Benefits rules

Public holidays

Hungary celebrates 10 public holidays for which employees are given the day off, including:

  • New Year’s Day
  • Revolution Day
  • Easter Monday
  • Labor Day
  • Whit Monday
  • Saint Stephen’s Day
  • Republic Day
  • All Saints’ Day
  • Christmas Day
  • Second Day of Christmas

Employees in Hungary are entitled to at least 20 days off per year. The amount increases based on the age of the employee as follows:

  • Up to the Age of 25: 20 business days
  • From the Age of 25: 21 business days
  • Up to the Age of 31: an additional business day every 3 years
  • Up to the Age of 45: an additional business day every 2 years
  • From the Age of 45: 30 business days

Sick leave

An employee is entitled to 15 sick days annually while enrolled in the national social security system. Employees generally receive 70% of their salary which is paid by the employer. After 15 days, the amount paid varies from 50% – 60% depending on the term of service. One third is paid by the employer and the remaining amount is paid by the state.

If an employee is unable to work due to a work related accident or occupational illness for 4 days or more but less than 3 months, the employer must pay the injured employee at a rate of pay of at least 75% from the first day of injury until the employee returns to work. If the employee is unable to work for a period longer than 3 months, the employee must claim compensation from the Compensation Fund.

Maternity leave & Paternity leave

Pregnant employees are entitled to 24 weeks of maternity leave. The leave must start 4 weeks prior to the scheduled delivery date. The employee is entitled to 70% of her average salary. During the first 6 months of nursing, the employee is entitled to two hours of work time allowance daily and one hour after that until the child reaches 9 months.

The father is entitled to 5 days off for paternity leave which the employer must allocate within two months following the date of birth. The father is also entitled to take unpaid leave until the child reaches 3 years of age.

Parental Leave: 

One parent is entitled to take additional leave until the child reaches 2 years of age. The amount paid is 70% of previous earnings, however, the amount cannot exceed 70% of twice the minimum daily wage. One parent is also entitled to extra annual paid time off, 2 days for 1 child, 4 days for 2 children, or 7 days for more than 2 children under 16 years of age.

Other leave (marriage, bereavement, exam leave)

There is no other statutory leave in Hungary.

Insurance

Health Security & Private Insurance

Payroll taxes and the general budget are used to fund Hungary’s mandatory universal healthcare system.

* Native Teams can support you in finding the best private insurance in the country. Contact us and we will send a comparison of insurance packages and prices*

Visa

Relocation and Work Permits

Native Teams will apply for your work visa in the nation on your behalf and serve as your Employer of Record. All the required documents can be uploaded using our app. Until you have your work and residency visa, Native Teams will support you by providing you with frequent information on the progress.

How long is the Visa / Work Permit process?

2 to 4 weeks depending on the authorities and provided documents

Which documents do you need?

To apply for visa/work permit in Hungary, please upload the documents from our onboarding list (relocation to log in/pricing).