Payroll and Benefits Guide - Hungary

Hungary
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Currency

Forlnt
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Capital

Budapest
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Employer Taxes

13.00%
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Date Format

yyyy.mm.dd
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Fiscal Year

Jan 1 – Dec 31

Fun Facts

Buda and Pest, the two historic cities that made up Budapest, the capital of Hungary, were split by the Danube River.

The third-largest parliament building in the world is the Hungarian Parliament Building in Budapest.

Hong Kong is known for being “a shopper’s paradise”, with a variety of upscale malls, street markets, and lively shopping areas.

The oldest subway system in continental Europe is in Budapest.

Its rich thermal waters have led to the development of more than 1,500 spas and bathhouses.

The country currently has 13 Nobel Prizes.

Hungary

Contributions

Employee Payroll Tax

Contribution TypeRate
Pension Fund10.00%
Health Care Contribution7.00%
Unemployment Fund1.50%

Employer Payroll Tax

Contribution TypeRate
Social Contribution Tax13.00%

Payroll

Payroll Cycle

Monthly payrolls are the norm in Hungary and payment is usually done from the last day of work to the 10th day of the following month.

13th Salary

A 13th-month salary is not required by law, but an employer has the discretion to award bonuses.

Work Hours and Week

A regular workweek is made up of 40 hours and five days or approximately 8 hours per day.

Overtime

Employment contracts and collective agreements govern overtime. There is a cap of 72 hours per week for requests for overtime or holiday work, and there is a different maximum working hours for children.

Overtime work earns the employee 150.00% of their base pay. Weekend and holiday overtime is compensated at a rate of 200.00% of the employee’s base pay.

Hungary

Leave

Paid Time Off

Every year, every employee is entitled to a paid vacation of 20 days, which increases based on age to a maximum of 30 days for those over 45 years old.

Public Holidays

There are currently 11 public holidays in Hungary.

Sick Days

Employees are entitled to 15 days of employer-paid sick leave. On the basis of the average wage for the previous six months, they are paid 70.00% of their salary rate.

If the illness lasts longer than 15 days, the employee is entitled to further time off up to one year (or an unlimited amount in the event of a work accident).

Sick pay is calculated at a rate equal to 80% of the average daily earnings for the previous 12 months. In the case of employment for less than a year, the calculation is based on the average wages obtained since the employee’s start date.

Employees may accrue a maximum of 120 sick days at any time throughout the course of their employment.

Maternity Leave

Although they can extend their leave by up to three years and still receive maternity benefits, women have 24 weeks of basic maternity leave.

Mothers are entitled to Pregnancy and Confinement Benefit (CSED) for the first six months at a rate of 70.00% of their pay.

Then, they are entitled to a Child Care Fee (Gyermekgondozási dj – GYED) at a rate of seventy percent of their salary, up to a maximum of double the minimum wage, for the subsequent eighteen months until the kid turns two.

Parents or grandparents who are caring for children under the age of three are also eligible for a benefit known as Child Home Care Allowance (Gyermekgondozási segély, or GYES).

The National Health Insurance Fund of Hungary (NEAK) is responsible for paying the benefits.

Paternity Leave

In the first two months after a child is born, a father is given 10 days of paid paternity leave, or 12 days in the case of numerous or problematic births.

Parental Leave

If an employee has worked for at least a year continuously, they are eligible for 44 working days of parental leave until a child is three.

If an employee has worked for at least a year continuously, they are eligible for 44 working days of parental leave until a child is three.

Employees with children under the age of 16 are also entitled to the following additional paid leave yearly: two days of work for one child, four days of work for two kids, and seven days of work for three kids.

Extra vacation days must be supplemented by two working days if the child has special needs.

This extra vacation time may be requested by both parents.

Other Leave(s)

If an employee’s family member dies, an additional two days of leave may be permitted by the employer.

Termination

Termination Process

A fixed-term contract may be terminated by the employer due to business, personal, or employee misconduct. It necessitates notice and a justification for the termination in writing. A warning must be delivered and the employee is given the chance to defend their actions if the reason is misconduct.

The employee must receive the final wage no later than the fifth working day following the termination of the employment.

Notice Period

The standard notice period is 30 day; it must be increased if the employer terminates the job by a specific number of days based on the number of years of service:

  • For three years of service, five days.
  • For five years of service, 15 days.
  • For eight years of service, 20 days.
  • For fifteen years of service, 30 days.
  • For eighteen years of service, 40 days.
  • For twenty years of service, 60 days

The notice period may be extended by up to six months with the parties’ consent. On probation, no notice is necessary.

Severance Pay

Following three years of employment, employees are eligible for severance pay. It ranges from 1-6 months’ income based on the worker’s age and length of employment. When employing a fixed-term contract, it is not necessary.

Probation Period

Probation Period

In Hungary, a probationary period cannot be longer than three months. If the agreed-upon trial term is shorter than three months, it may be extended as long as it still totals three months.

Immigration

Foreign nationals must apply for one of the following work permits in order to enter Hungary to work:

  • Individual work permit – for foreigners who want to work in the nation for no more than 90 days
  • Joint work permit – for foreigners who want to work in the nation for more than 90 days up to 180 days.
  • Residence permit – allows up to 90 days of residence.
  • Single application procedure – those who are not EEA citizens and who want to stay in Hungary for more than 90 days in a 180-day period. Only those who are employed by a Hungarian employer are eligible to apply for this type of permission.

They must also apply for the appropriate visa along with these permits.

A visa lasts for a year, a work permit for two, and a residence permit for three.

VAT

The commonly used VAT rate in Hungary is 27.00%