Laws and Policies in Hungary

Employment Contracts in Hungary

Employment relationships are governed by the Hungarian Labour Code (Act I of 2012).

Contract Requirements

Employment contracts must be in writing and include:

• Employer and employee details
• Job title and responsibilities
• Work location (office, hybrid, remote)
• Salary in HUF and payment terms
• Working hours
• Starting date
• Probation period (if applicable)

Additional terms often included:

• Bonus schemes
• Benefits
• Confidentiality and IP rights
• Non-compete clauses (with compensation)

Types of Contracts

• Indefinite-term contract – default and most common
• Fixed-term contract – allowed but restrictions apply on renewals
• Part-time contracts
• Remote and hybrid work agreements

Probation Period

Up to 3 months, or up to 6 months if agreed in writing.

An EOR ensures your contracts fully comply with the Hungarian Labour Code and local language requirements.

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Working Hours in Hungary

• Standard working time: 40 hours per week
• Typical schedule: 8 hours/day, Monday to Friday

Overtime

• Overtime is paid at 50% extra on weekdays
• Work on rest days or holidays may be compensated at 100% extra or with time off in lieu
• Annual overtime caps apply unless special agreements exist

Rest Periods

• Daily rest: 11 consecutive hours
• Weekly rest: 48 hours, usually including Sunday

Flexible Arrangements

Hungary allows structured systems such as:

• Working time banking
• Shift work
• Remote work agreements

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Employee Leave in Hungary

Annual Leave

Employees receive 20 days of paid annual leave per year.
Additional leave is granted based on age:

• +1 day from age 25
• Increasing gradually up to +10 days by age 45

Parents also receive extra annual leave based on the number of children.

Sick Leave

• The employer pays 70% of salary for the first 15 days of certified sick leave
• From day 16 onward, social security pays sickness benefit (with conditions)

Maternity Leave

• 24 weeks of maternity leave
• Benefit is typically provided through social security (CSED), paid based on average salary

Paternity Leave

• Fathers are entitled to 10 working days, paid at 100% of salary

Parental Leave

Available up to the child’s 3rd year, with monthly parental allowances.

Public Holidays

Hungary has 11–12 national public holidays, mostly fixed dates.

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Employee Benefits in Hungary

Social Security Contributions

Both employer and employee must contribute to Hungary’s social insurance system.

Employer Contributions

• 13% Social Contribution Tax (SZOCHO)

Employee Contributions

• 18.5% total, broken down into:
  • 10% pension
  • 7% health insurance
  • 1.5% unemployment / labour market contribution

Statutory Benefits

Social security provides:

• Healthcare services
• Sick pay
• Maternity and parental benefits
• Pension benefits
• Work injury coverage

Common Additional Benefits

Competitive employers often offer:

• SZÉP Card (popular tax-advantaged benefit)
• Private health insurance
• Transportation allowance
• Meal vouchers
• Bonus and incentive plans
• Remote-work stipends
• Professional development support

Your EOR can design a benefits package that aligns with local expectations.

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Payroll & Tax in Hungary

Payroll Currency

• Salaries are paid in Hungarian Forint (HUF).

Payroll Frequency

• Generally monthly, paid by the 10th of the following month.

Individual Income Tax

Hungary has a flat 15% personal income tax rate.

Employers must:

• Withhold income tax (15%)
• Deduct employee social contributions
• Pay employer social contributions
• Submit monthly payroll declarations
• Provide annual tax statements

An EOR ensures accurate payroll compliance and timely filings.

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Employment Laws & Compliance in Hungary

Key obligations under the Labour Code include:

• Written employment contract
• Maximum working time rules
• Minimum wage compliance
• Statutory leave and holiday entitlements
• Proper social security registration
• Safe working environment

Termination & Severance

Termination must follow strict legal procedures.

Employees may be entitled to:

• Notice period: 30 days minimum, increasing with service
• Severance pay: 1–6 months’ salary depending on years of service
• Special protections apply (e.g., during pregnancy, sick leave, maternity leave)

Non-Discrimination

Employers must prevent discrimination based on:

• Gender
• Age
• Disability
• Nationality
• Race or ethnicity
• Family status
• Trade union activity

Clear HR processes and documentation reduce compliance risks.