Guide to employing in Hungary

Hungary

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Capital City

Budapest

Currency

Forint

Population Size

9,772,756 (2020)

Language Spoken

Hungarian

Overview

Hiring employees in a foreign country can be a challenging and resource-intensive task. XPANDIUM is an expert provider of Employer of Record (EOR) services in Hungary. We offer an EOR solution as a cost-effective and compliant way to handle all aspects of onboarding, payroll management/administration, tax payments and benefits without you having to establish a legal entity in Hungary.

When you choose to partner with XPANDIUM as your employer of record in Hungary, our own local EOR entity assumes all the responsibilities of an employer. We assist you in navigating the applicable employment regulations of the specified country while you focus on unlocking your business’s full potential.

XPANDIUM - Hire your employees in Hungary

The Hungarian labour market operates under the labour code, which ensures fair and transparent labour practices and protects the rights of both employers and employees.

This labour code specifies rules and procedures that companies must comply with when hiring employees in Hungary and includes regulations regarding working hours, paid time off, illness termination and maternity benefits.

Ensuring labour practices are correctly implemented requires a thorough understanding of the labour code, and implementing it correctly can be a time-intensive task. Non-compliance with the labour code can be costly and lead to fines and sanctions for the offending company. XPANDIUM understands the importance of these regulations and will work diligently to prevent any potential pitfalls, allowing your business to flourish in Hungary's dynamic market.

When you hire workers in Hungary using an EOR service, it’s important to note that Hungarian EOR service providers are strictly regulated and legally required to have a valid agency licence.

XPANDIUM can assist your company in navigating the intricacies of the labour market when you hire employees in Hungary. With our extensive knowledge of the Hungarian labour code, we offer you seamless guidance and support, ensuring proper labour practices are always maintained.

When you partner with XPANDIUM, we will ensure your company complies and stays current with any Hungarian labour code changes.

Employment Contract

Employment contracts may be fixed term or for indefinite duration.Fixed-term contracts are allowed for up to a maximum 5-year period (including breaks) if they are for temporary, seasonal work or EOR scheme.

Probation period

Max 3 months; if shorter, may be extended once but never beyond 3 months total

Working hours

40 hrs/week; overtime max 250 hrs/yr (up to 400 by collective agreement)

Flexible work schedule

Employees telecommuting i.e. working remotely in “home-office” may work flexible hours, however special labor law conditions apply for both a flexible telecommuting or uneven time-framed working schedule scheme.

Minimum wage

HUF 322,800/mo gross (from 1 Jan 2026); skilled/guaranteed minimum HUF 373,200/mo

13th month salary

Not mandatory

Benefit package

In Hungary, there are no obligatory fringe benefits that an Employer must offer however a voluntary plan can be set up which is referred to as a Cafeteria system (see more details in the Benefits section).

Payroll Cycle

Monthly salaries must be paid within 10 calendar days following the relevant month and after payroll is closed for all employees.

Health insurance in Hungary

Hungary provides full medical coverage to all residents, with payroll contributions as one source of funding. The government pays contributions for certain groups such as the unemployed and pensioners.

Public Holidays

11 public holidays per year

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Popular Benefits in Hungary

When you decide to partner with XPANDIUM’s payroll services in Hungary, we can help you create specialised benefit packages to attract top candidates in the Hungarian market.

This means XPANDIUM will help your company design and establish customised plans to compensate employees beyond regular salaries. These voluntary, non-salary benefits may include:

Szèchenyi card / Accommodation support (special terms apply)

Voluntary pension fund contribution (VPF)

Commuting allowance (special terms may apply)

Voluntary healthcare fund contribution (special terms apply))

Benefit planning process includes

XPANDIUM understands the importance of offering attractive benefits to attract top-tier candidates when your company hires employees in Hungary. We can assist your company in designing and implementing unique benefit programmes for single or group employees. This process will include:

Helping you determine the annual benefit amount you want to offer employees – this amount can be divided into 12 instalments and integrated into the regular payroll.
Determining which benefit items to offer employees and designing unique benefits packages.
Internal policies should be created to outline the benefits plan, formally communicated to relevant employees and integrated with the monthly payroll.
Ensuring employees have accurately completed benefit statements – specifying preferred benefits and respective amounts. These statements must be completed, signed and provided to the Hungarian Employer of Record for processing.

Types of Leaves in Hungary

Annual (paid) leave

20 working days minimum, rising with age (up to +10 days); extra days per number of children

Sick leave

15 working days/yr at 70% of gross wage, employer-paid (first 3 days generally unpaid)

Maternity leave

24 weeks / 168 calendar days (4 wks pre-birth + 20 post)

Paternal leave

Private sector 5 days (7 for twins)

Short-term child care leave

Employees are entitled to short-term and paid child care leave. This type of special leave is certified by the employee’s GP.

Other leave

Unpaid leave: Unpaid leave can only be defined as quasi extraordinary vacation without pay, which is an opportunity, but also there are compulsory cases according to the Hungarian Labour Law for reasons.

Employees shall convey the request for leave of absence without pay in writing, at least fifteen days in advance, for example for Long-term child care leave

Compassionate leave: when a close family member (i.e spouse or grandparents) of the employee is seriously or life-threateningly ill or be in such and requires care.

Emergency and short absence leave

Military service

Employment termination in Hungary

In Hungary employers have the below options to terminate an employment contract:

Termination by mutual consent

The termination by mutual consent is not regulated by expressed Hungarian Labour Law provisions, because termination by mutual consent allows the employer and employee to agree freely but in written agreement with each other on the conditions of termination.

However terminating employment this way is a very common and highly supported practice due to parties waiving all further claims, subject to individual severance payment and notice period.

Termination by notice

Minimum 30 days; extended by employer based on length of service (up to 90 days)

Dismissal without notice

Employer or Employee may terminate an employment relationship without notice if the other party:

wilfully or by gross negligence commits a grave violation of any substantive obligations arising from the employment relationship; or
otherwise engages in conduct that would render the employment relationship impossible.

The right of termination without notice may be exercised within a period of fifteen days of gaining knowledge of the grounds. Therefore, in any case within not more than one year of the occurrence of such grounds, or in the event of a criminal offense up to the statute of limitation.

In case of termination without notice, the justification is obligatory for the employer or the employee as well.

Severance pay

From 3 yrs service: 1 month; scaling up to 6 months at 25+ yrs; +1–3 months near retirement

How EOR works in Hungary

XPANDIUM offers specialised EOR services in Hungary as a strategic solution for companies hiring employees across borders. By opting for XPANDIUM’s EOR solution, you delegate the responsibility of employing talent to our local business entity. XPANDIUM will seamlessly handle all aspects of labour regulations, payroll administration, distributing salaries and filing employee-related taxes and returns.

As your employee’s EOR in Hungary, XPANDIUM will help you to navigate all employment processes from start to finish and assist you in enhancing your workforce management.

Take the complexity out of hiring employees in Hungary, and contact XPANDIUM for a tailored employer-of-record solution.

Payment in Hungary

Thanks to its IT advancements and pool of highly skilled professionals, Hungary has become an excellent choice for global expansion. However, managing employee payroll in Hungary can pose a significant challenge amidst this landscape.

At XPANDIUM, we offer local expertise to ensure your company complies with local Hungarian payroll regulations. Our dynamic team effortlessly handles the intricacies associated with payroll services in Hungary, such as wage calculations, taxation complexities, deductions and benefits administration.

By partnering with XPANDIUM as your payroll provider in Hungary, we will guide the way forward to a strategic approach towards payroll management. Here is what is included in XPANDIUM’s payroll services in Hungary:

Pre-Payroll Processes – XPANDIUM will collect and verify all your employee’s data and develop the proper procedures to ensure future payroll success.
Payroll Calculation – The data collected during the pre-payroll phase will be seamlessly integrated with your payroll system to ensure precise salary calculations.
Post-Payroll – XPANDIUM will facilitate salary payments, payroll accounting, and payroll reporting and ensure compliance with local payroll regulations

Experience a seamless payroll journey in Hungary with the expertise of XPANDIUM. Our specialised payroll services enhance your experience by ensuring compliance, efficiency and operational excellence. Discover the benefits of payroll management with XPANDIUM as your partner in Hungary.