Employing in Hungary

Situated in the heart of Europe, Hungary is the optimum expansion location for businesses involved in manufacturing, services and logistics — and the ideal base for investors who are planning cross-border business developments.

Foreign companies are often attracted to Hungary’s highly skilled and highly educated labour force, particularly in the engineering, pharmaceutical, IT, mathematics, economics, physics and professional services sectors. (Around two-thirds of the workforce in Hungary has completed secondary, technical or vocational education.)

Yet, where Hungary really stands out compared to other countries in the region is the Hungarian government’s dedication to streamlining business processes and increasing the competitiveness of both SMEs and large enterprises through a wide range of incentives. There are various refundable and non-refundable incentives available for companies looking to expand into Hungary, including cash subsidies, tax incentives, low-interest loans and land at reduced prices.


Our Expertise

Managing a global workforce in Hungary

Managing a workforce in Hungary presents unique challenges due to the country's specific labour laws and employment practices. Adherence to the Hungarian Labour Code, social security regulations, and tax obligations under the Personal Income Tax Act is essential for businesses operating in Hungary. TopSource Worldwide, with our extensive experience in global employee management, provides vital support to companies in Hungary, ensuring accurate, compliant, and efficient workforce management.


Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.


Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.


Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success. 


Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.


Global Employee Cost Calculator

Estimate the cost of your new hire with our calculator. Simply enter their location and salary information in to this handy tool to see what will be spent in employment costs each month.

Employment Cost Calculator

British Pound


British PoundHungarian Forint
Base Salary (per month)£6.63HUF 2,995.58
Local employer's costs£0.00HUF 0.00
Total Cost (Annual)£79.51HUF 35,946.93
Hiring in Hungary

Please note - the above costs are an estimate, and the actual amount may differ based on a number of variables.

Additional setup and management fees may apply.


Hear from our clients about our EOR solutions in Hungary

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven

”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar

”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Client based in Ft Worth, Texas, USA

Personalised Employer of Record services in Hungary

TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in Hungary. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your Hungary-based employees.

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End-to-end Hungary payroll services

Looking to expand into Hungary? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your Hungary expansion initiatives.

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Global entity management

Venturing into the Hungarian market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.

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Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.

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Global EOR services

Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.

Global Expansion Simplified

How to do business in Hungary

Entering the Hungarian market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.

TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in Hungary.


Hungary Insights

Key insights into Hungary's landscape


VAT rates: Hungary has a standard Value Added Tax (VAT) rate of 27%, with reduced rates of 18% and 5% for specific goods and services.


Ease of Doing Business rank: Hungary ranks 52nd in the World Bank's Ease of Doing Business Index, indicating a moderately favourable business environment.


Consumer Confidence Index: As of 2022, Hungary's Consumer Confidence Index was 69.3, reflecting cautious economic sentiment.


Employee maternity/paternity leave: Maternity leave is 24 weeks, and paternity leave is 5 days, providing support for new parents in the workforce.


Employee termination period: Standard notice for termination varies but is typically 15 to 30 days, depending on employment contract terms and length.


Employee salary pay date: Wages are usually paid monthly, with specific pay dates outlined in employment contracts and subject to labour laws.


Bank holidays: Hungary observes public holidays, including two Revolution Memorial Days, National Day, and Christmas, with a total of around 12 public holidays in a year.

Country guidelines

Salary currency

With the exception of work performed abroad, all wages shall be established and paid in Hungarian forints.

Rules on registration prior to hire date

Registration has to be made at the latest on the day the employee starts at the workplace but before the commencement of their work.

Probationary period

In the employment contract, the parties may stipulate a probationary period of not more than three months from the date of commencement of the employment relationship. In the event that a shorter probationary period has been stipulated, the parties may extend the probationary period once. In either case, the duration of the probationary period may not exceed three months (there’s no minimum prescribed in the law).

No extension is permissible after three months have been reached.

Notice period during probationary

During the probationary period, the employer and the employee have the right of termination without notice.

Notice period after probationary period

The period of notice is 30 days.

The notice period shall begin at the earliest on the day following the date when dismissal is communicated. However, certain cases such as incapacity to work due to illness may delay the first day of the notice period.
Where employment is terminated by the employer, the 30-day notice period shall be extended:

  • by five days after three years
  • by 15 days after five years
  • by 20 days after eight years
  • by 25 days after 10 years
  • by 30 days after 15 years
  • by 40 days after 18 years
  • by 60 days after 20 years of employment with the employer

By agreement of the parties, the notice periods may be extended by up to six months.

Working hours

Pursuant to the Hungarian Labor Code, ‘daily working time’ shall mean the duration of working time fixed by the parties or specified by employment regulations for:

a) Full-time jobs; or
b) Part-time jobs

The daily working time in full-time jobs is eight hours.

The scheduled daily working time of an employee may not be less than four hours, with the exception of part-time work.

According to the work schedule:

  • The daily working time of employees shall not exceed 12 hours
  • The weekly working time of employees shall not exceed 48 hours

In a given calendar year, 250 hours of overtime work can be ordered.

In addition to the 250 hours, a maximum of 150 hours of overtime work can be ordered in a given calendar year subject to a written agreement between the employee and the employer.

If the employer requests the employee to perform overtime, then additional compensation is payable.

The parties may agree a salary which is inclusive of the compensation for the overtime. The parties may also stipulate a fixed monthly payment covering regular wages and wage supplements as well. In this case, if one hour overtime is requested, we would still need to pay the proportionate basic salary and the relating supplement.

This means that the overtime still has to be counted and (the proportionate salary) paid.

Other statutory provisions

Employees who are ill are entitled to 15 days’ sick leave per year and receive 70% of their salary met by the employer. After these 15 days, the employee may receive a minimum of 50–60% of the base salary: two-thirds of this will be paid by the government, with the rest falling to the employer.

New mothers receive 24 weeks of maternity leave, at a minimum of 70% of their base salary. They may also take up to three years off and receive maternity benefits. Fathers are entitled to five days of paternity leave, which can be taken in the first two months following the birth.


An employment relationship may be terminated:

  • By mutual consent
  • By notice
  • By dismissal without notice

An employment relationship may be terminated either by the employee or the employer by notice. The employer may not terminate the employment relationship by notice:

  • During pregnancy
  • During maternity leave
  • During a leave of absence taken without pay for caring for a child
  • During any period of actual voluntary reserve military service
  • In the case of women, while receiving treatment related to a human reproduction procedure, for up to six months from the beginning of such treatment

(All of the above cases apply only if the employee has informed the employer thereof.)

Employers are required to justify their dismissals. The reasoning shall clearly specify the grounds for termination, and it shall also be authentic and reasonable. Employees may terminate the employment by notice without reasoning.

An employee may be dismissed only for reasons in connection with their behavior in relation to the employment relationship, with their ability or in connection with the employer’s operations.

The notice period shall begin at the earliest on the day following the date when dismissal is communicated; however, some exceptions exist, and they may delay the commencement date.

In the event of dismissal, the employer shall excuse the employee concerned from work duty for at least half of the notice period.

An employee shall be entitled to severance pay if the employment relationship is terminated by the employer.

Severance pay shall be the sum of the absentee pay due for:

  • One month, in the case of at least three years
  • Two months, in the case of at least five years
  • Three months, in the case of at least 10 years
  • Four months, in the case of at least 15 years
  • Five months, in the case of at least 20 years
  • Six months, in the case of at least 25 years

The amount of severance pay shall be increased if the employment relationship is terminated within a five-year period before the date when the employee reaches the age limit for old-age pension.

The employee shall not be entitled to receive severance pay if:

  • They are recognised as a pensioner at the time when the notice of dismissal is delivered or when the employer is terminated without succession
  • They are dismissed for reasons in connection with their behaviour in relation to the employment relationship or on grounds other than health reasons

Termination without notice

An 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
  • Otherwise engages in conduct that would render the employment relationship impossible

Holiday entitlement

Employees are entitled to paid annual leave based on the time spent at work, comprising vested vacation time and extra vacation time. The amount of vested vacation time shall be 20 working days.

Employees shall be entitled to extra vacation time as follows:

  • One working day over the age of 25
  • Two working days over the age of 28
  • Three working days over the age of 31
  • Four working days over the age of 33
  • Five working days over the age of 35
  • Six working days over the age of 37
  • Seven working days over the age of 39
  • Eight working days over the age of 41
  • Nine working days over the age of 43
  • 10 working days over the age of 45

Employees shall be first entitled to extra vacation time in the year when reaching the age specified above.

Employees may also be entitled to extra vacation for other reasons, such as if they have children. Regarding children, employees entitled to:

  • Two working days for one child
  • Four working days for two children
  • A total of seven working days for more than two children under 16 years of age

The Hungarian Labor Code respects calendar years. Vacation time shall be allocated in the year in which it is due, but if the employment relationship commenced on 1 October or subsequently, the employer shall be entitled to allocate vacation time by 31 March of the next year. If vacation time could not be allocated as written above for reasons attributable to the employee, it shall be allocated within 60 days after the cause ceases to exist. (This usually happens when the employee comes back to work from maternity leave.)

Vacation time shall be considered allocated during the year when it’s due, provided that it begins during that year and the portion allocated in the following year doesn’t exceed five working days. In the event of economic reasons of particular importance or any direct and consequential reason arising in connection with its operations, the employer: 

  • May amend the date of vacation previously agreed upon
  • May recall the employee from vacation
  • ay allocate one-fourth of the employee’s vacation time by 31 March of the following year if so stipulated in the collective agreement

By agreement of the parties covering a calendar year, the employer shall be entitled to allocate the vacation time related to the age of the employment (above the basic 20 days) by the end of the year following the year when due.

Employ and pay anywhere

Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in Hungary

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

  • Understand the different types of EOR taxes
  • Stay up-to-date on the latest changes to EOR tax regulations
  • Avoid penalties for non-compliance
Our author

Mark Robbins

Global Sales Director

Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013. 

Published 2023-11-14 00:00:00

Updated 2023-11-15 00:00:00

Adrian Cooney

Reviewed by:

Adrian Cooney

Adrian Cooney

Fact checked by:

Adrian Cooney

Employer of Record FAQ

Frequently Asked Questions about Hungarian employment solutions

What is an Employer of Record in Hungary?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in Hungary. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in Hungary?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in Hungary. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in Hungary?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in Hungary. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.

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