Payroll and Benefits Guide Hungary
Last updated: Apr 10, 2022
Employer Payroll Contributions
|13.00%||Total Employment Cost|
|13.00%||Social Contribution Tax|
Employee Payroll Contributions
|18.50%||Total Employee Cost|
|7.00%||Health Care Contribution|
Employee Income Tax
|15.00%||Flat rate (personal income tax is not applicable to employees under the age of 25)|
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.
MINIMUM WAGE (PER MONTH)
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.
In Hungary, a 13th-month salary is not mandatory. However, an employer can pay bonuses at the employer’s discretion.
The standard working week in Hungary consists of 40 hours a week, typically 8 hours a day for a five-day working week.
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.
Paid Time Off
All employees are entitled to a paid vacation of 20 days every year, which increases according to the employee’s age to a maximum of 30 days for employees over 45 years of age.
In addition, employees with children under 16 years of age are entitled to extra vacation time as follows:
- Two working days for one child
- Four working days for two children
- Seven working days for three children
In case the child is with disabilities, extra vacation days must be increased by two working days.
Both parents may request this extra vacation time.
Upon the birth of his child, a father shall be entitled to five extra vacation days, or seven days in the case of twins, until the end of the second month from the date of birth.
There are 11 public holidays in Hungary but its custom to grant additional days e.g. 2nd St Stephen’s day in order to have a long weekend
Employees are entitled to 15 days of paid sick leave, paid by the employer. They receive 70.00% of their salary rate based on the average salary across the previous six months.
Should the sickness continue past the 15th day, the employee is entitled to further time off up to 1 year (or in the event of a work accident for an unlimited period). The sick payment is paid at a rate of one-third of the payment made by the employer and two-thirds paid by the National Health Insurance Fund.
Women have 24 weeks of maternity leave but can take up to three years of leave and receive maternity benefits.
For the first six months, mothers are entitled Pregnancy and Confinement Benefit (CSED) at a rate of 70.00% of the salary. For the next eighteen months, until the child’s second birthday, mothers are entitled to a Child Care Fee (Gyermekgondozási díj – GYED) at a rate of 70.00% of the salary up to a maximum of double the minimum wage.
A benefit called Child Home Care Allowance (Gyermekgondozási segély – GYES) is also available for parents or grandparents taking care of a child up to the age of three. The benefits are paid by the National Health Insurance Fund of Hungary (NEAK).
PAID MATERNITY LEAVE (DAYS)
A father is entitled to 5 days paid paternity leave, seven days for multiple/complicated birth, taken within the two-months following birth.
After the maternity leave period, one parent can take parental leave until the child reaches the age of 2 years old. This leave is paid at 70.00% but is capped at double the minimum daily wage.
Employees with children under 16 years of age are entitled to extra vacation time as follows:
- Two working days for one child
- Four working days for two children
- Seven working days for three children
There is no other statutory leave in Hungary, however, many companies do allow employees two days’ leave in the event of a death of a family member.
Employers can terminate a fixed-term contract for the following reasons – business, personal, or workers misconduct. It requires notice and a written explanation for the termination. If the reason is misconduct, a warning needs to be given, and the employee gets a chance to explain actions.
Upon termination of the employment relationship by notice, the employee must receive the final salary payment no later than the fifth working day after the termination of the employment relationship.
In Hungary, the notice period is 30 days. If the employer terminates the employment, the 30-day notice period must be extended by a set number of days based on the years of service:
- After three years of service, five additional days’ notice is required.
- After five years of service, 15 additional days’ notice is required.
- After eight years of service, 20 additional days’ notice is required.
- After ten years of service, 25 additional days’ notice is required.
- After fifteen years of service, 30 additional days’ notice is required.
- After eighteen years of service, 40 additional days’ notice is required.
- After twenty years of service, 60 additional days’ notice is required.
By agreement of the parties, the notice period may be extended by up to six months.
Employees are entitled to a severance payment if the employer terminates employment for operational reasons. The amount of severance pay is a minimum of 1 month’s salary and a maximum of six months, dependent on the stipulation in the employment contract.
The statutory length of probation in Hungary is no more than three months. Should the contracted probation period be less than three months the parties may extend the duration once, but for no longer than three months in its entirety.
Individual or season tickets for sports events, holiday gift cards, a meals allowance, mobile phone allowance, and car allowance/reimbursement.
For foreign nationals to enter Hungary to work, they need to apply for one of the following work permits:
- Individual work permit – For foreign nationals who want to work in Hungary for not more than 90 days over 180 days.
- Joint work permit – For foreign nationals who wish to work in Hungary for more than 90 days within 180 days.
- Residence permits – permits residency in Hungary for up to 90 days.
- Single application procedure – Non-EEA nationals who wish to reside in Hungary for more than 90 days within 180 days. An employee can only apply for this permit type through an employment relationship with a Hungarian employer.
Types of Visas
- Long Stay Visa (D) – Those who wish to stay in Hungary long-term act as a pre-approved residency permit.
- Working Schengen Visa – This visa type is used for short-term employment opportunities.
- Schengen Business Visa – For foreign, non-EEA nationals who wish to travel to a Schengen area temporarily. This visa can be used for single or multiple entries. It allows holders to stay for 90 days within six months.
- Seasonal Employment Visa – foreign nationals who wish to work in agriculture, animal husbandry, or fishing are eligible for this visa. This allows the applicant to work for no more than 180 days.
- EU Blue Card – a highly-skilled non-EU worker, residing in an EU-member country can apply for this card as long as a residence permit is acquired. The foreign national will need to prove 18 months of lawful stay in a member state to be eligible for this card.
A residence permit is valid for up to 3 years. A work permit is valid for two years, while a visa can be valid for a year.
The standard rate of sales tax in Hungary is 27.00%.
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Tax brackets have been updated.
Questions & Answers
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Payroll and Benefits Guide
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
Public Holidays Calendar
|Monday||Feb-27||Hungary National Day|
I have an employee who’d like to be paid in euros, is this possible?
Hi Albert, thank you for your question. According to the Hungarian Labor Code, wages must be paid in the local currency (Hungarian Forint), so it isn’t possible to pay your employee in euros.
I have a visa and work permit offered by X company. In this case can i do a part time at restaurants as i also have passion on cooking and i cook well. If yes, what is the maximum part time hours
Hi Bharat, can you please tell me what kind of visa you have and which country you are from?
I have D type Visa and i am from India.
Thank you. Your visa is not tied to your employer, meaning that you are able to work for multiple employers if you so choose. Part-time work is considered to be between 4-6 hours per day.
Thank you!! This visa processing is actually done by My company, so you mean this is indeed independent?
Thank you again for your detailed responses!!
Hi. I am a third country citizen living in Hungary more than 3 years. I want to get maternity leave 1-2 months before my labor. The company I am working for told me that I wont be eligible for maternity leave benefits from the state in case if the delivery of babies happen in my home country (Azerbaijan) as there should be signatures and stamps of Vedónó on my papers every month regularly and finally birth certificate is supposed to be received from Hungary itself. I couldnt believe the truthfulness of this info,as it should be our right to choose the destination in which we want to give birth. Could you please help me?
We recommend you contact the National Health Insurance Agency in Hungary for advice regarding this matter.
I about to have an interview with A Hungarian company but I am S. Korean.
Can I get paid my salery in euro even though I will be hired by Hungarian corporation? I am not sure about which type of my visa will be.
Hi, a worker in Hungary must be paid in the local currency.
Hi, About travel expenses reimbursed by an employer in Hungary, what are the max tax free amounts for a meal reimbursed locally and abroad ? Same for an hotel room locally and abroad ? Thanks for your lights …
Most expenses are tax-free if they are supported by a valid tax receipt or claim form. In some cases, limits apply to the amount of a per diem that can be paid tax-free but this is subject to many scenarios (eg. location where a worker is based and where they are required to work, time spent in location, length of time receiving the per diem, etc.). This will need to be reviewed on a case by case basis depending on location.
Hi! I’ve an employee who we want to employ and we set a yearly rate of 50000 EUR. I get it they will have to be paid in local currency (HUF) but can the contract has the EUR amount fixed by month. Or is it possible to have new contract every month so as EUR – HUF exchange rate changes the employee doesn’t get lower salary in EUR?
Kindly seek legal and contractual advice, this is something that might be agreed upon with the employer, as the exchange rate can be included in the contract.
What about White Card visa? does it fit the visas mentioned above?
A white card is a residency permit intended for a third-country national who:
– has a verified employment relationship/owns a share in a company in a country other than Hungary and performs his/her work from Hungary using an advanced digital technology solution.
– meets the general requirements for staying in Hungary for more than 90 days within any 180-day period and does not have any disqualifying conditions
– does not pursue any gainful activity in Hungary and does not hold a share in a Hungarian company
Hello, I am an Indian citizen with Permanent Residency in Hungary. When I travel to India, can I claim the home travel expense from the company/ government. Does the Hungarian law permits this? I have been told that as I dont travel to work from my Home(India), I cannot avail this, although my passport mentions permanent address as India. Can someone shed some light on this? If possible direct me to a government policy provided by the government?
Commuting reimbursement is usually applied when traveling from the office to home and back or reimbursement when on a business trip. If someone is traveling abroad for personal reasons this would not be required to be covered by the company (unless the employer relocated the worker to Hungary for the job and advised them at the time that paid travel to India would be included as part of the package).