Employment Overview
Navigating Hungarian employment legislation can be complex without local legal specialists.
At N2S, we simplify compliance, making it clear and straightforward for our clients and customers to grow and excel in Hungary.
Hungary Country
Guide
N2S provide expert solutions for businesses looking to expand or grow into Hungary, including compliance, payroll management and employment support. Request our Services to find out more about how we can help you.
For More Information
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Onboarding
Onboarding in Hungary can be straightforward for providers, like N2S, that have standard templates and processes.
Note that employment contracts must be in writing.
Engagement Types
There are two core engagement types in Hungary:
1. Employment – which can permanent or fixed term (not to exceed five years)
2. Independent contractor engagements – which should be project or time limited
Customers should consider carefully how they wish to engage their workforce and N2S can support customers in implementing compliant and scalable solutions.
IC Compliance
Customers should ensure that Independent Contractors (ICs) that they use are appropriately vetted and classified. This will help protect the business from misclassification claims.
Key considerations include the below, if you require further information or support, please contact us.
- Contractors should be distinct from employees and be in business on their own account
- The following elements should be considered when making a classification determination:
o Control
o Subcontracting
o Equipment
o Financial risk
o Management
o Contracts
o Opportunity for profit
Social Security/Taxes
Employer’s social security contribution in Hungary is around 13%.
Minimum Wages
Hungary does have a minimum wage which varies each year.
Working Hours
Standard working hours in Hungary are 8 hours per day and between 37.5 and 40 hours per week.
The standard workweek is Monday to Friday.
Overtime rules are subject to caps and require supplements to salary (typically 50% of salary).
Statutory Leaves
In Hungary, annual leave is up to 20 days per year which increases with length of service up to 30 days for employees over 45 years of age. Employees with children can also receive additional holiday entitlements.
Sick leave is up to 15 days per year at 70% salary paid by the employer. After 15 days, employer pays 1/3 of cost, the state pays the remainder.
Maternity leave in Hungary is up to 24 weeks; and maternity pay is paid by the state.
Paternity leave in Hungary is up to 10 days.
Parental leave is up to 44 days of leave until the child is 3 years old (or longer if child is disabled or sick), paid by the state.
Termination
The termination process in Hungary is relatively straightforward – terminations must “a fair and objective reason” for dismissal.
Probationary periods are not longer than three months (one month for fixed term contracts under a year).
Notice periods are stipulated in the employment contract (or any collective agreement) and is usually linked to the length of service.
The total employer notice period varies according to length of service, starting at 30 day notice and increasing to 90 days after 20 years of service.
Employees are entitled to statutory redundancy pay. The amount will depend on the length of service and age of the employee.
