Employer of Record in Hungary

An Employer of Record (EOR) in Hungary is a company that legally hires employees on your behalf. This means you can have a team in Hungary without setting up your own local entity. The EOR handles all the legal and HR tasks that come with employment, like payroll, taxes, benefits, and contracts. You manage your employee's day-to-day work, while the EOR takes care of the local employment rules. For companies looking to hire talent in Hungary, an EOR like Rivermate simplifies the process, ensuring you stay compliant with Hungarian law.

How an Employer of Record (EOR) Works in Hungary

Using an EOR to hire in Hungary is straightforward. The process typically follows these steps:

1. You Find the Talent: First, you identify and recruit the person you want to hire in Hungary.
2. Choose an EOR: You select an EOR provider that operates in Hungary. Look for one with clear pricing and a solid understanding of local labor laws.
3. Define Employment Terms: You decide on the salary, job responsibilities, and other key terms of employment. You then pass this information to the EOR.
4. EOR Creates a Compliant Contract: The EOR drafts a legally compliant employment contract based on Hungarian labor laws and the terms you provided. A written contract is mandatory in Hungary.
5. Employee Onboarding: The EOR onboards your new employee. This includes registering them with the tax authorities and social security.
6. Ongoing HR Management: The EOR manages payroll, taxes, and benefits each month. They ensure everything is done according to Hungarian regulations, so you don't have to worry about it.

Why use an Employer of Record in Hungary

Using an EOR in Hungary can save you time and reduce complexity. It allows you to enter the Hungarian market and hire talent quickly without the major step of creating a local company.

Here are some key benefits:

• Avoids Setting Up a Legal Entity: Establishing a company in Hungary can be a long and expensive process. An EOR lets you bypass this step completely.
• Ensures Legal Compliance: Hungarian labor laws can be complex. An EOR has local expertise and takes on the responsibility of staying compliant with all employment regulations, reducing your legal risks.
• Saves Time and Money: You can get your employee working in a matter of days instead of months. This saves on legal fees, setup costs, and administrative time.
• Simplifies HR and Payroll: The EOR handles all payroll processing, tax withholdings, and social security contributions. This removes a significant administrative burden from your team.
• Offers Competitive Benefits: An EOR can provide your employees with statutory benefits and even supplementary private health coverage, helping you attract and retain top talent.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Hungary includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Hungary.

Hiring in Hungary can be straightforward when you understand the local landscape. The country has a skilled workforce and a business-friendly environment, but it's important to follow the rules set out in Hungary's Labour Code. This guide will walk you through the key areas you need to know to hire talent in Hungary, whether you're looking for full-time employees or independent contractors.

Employment contracts & must-have clauses

You must provide a written employment contract in Hungary. While you can include various terms, some clauses are essential for the contract to be legally sound.

Here are the must-have clauses for any Hungarian employment contract:

• Employee's personal details: Full legal name and address.
• Employer's details: Full legal name and address.
• Job title and description: A clear outline of the employee's role and responsibilities.
• Base salary: The gross amount of the employee's wages.
• Place of work: The primary location where the employee will work.
• Start date: The first day of employment.

If your contract doesn't specify other terms, the law will assume it's a full-time, indefinite-term position.

Probation periods

In Hungary, you can include a probationary period in the employment contract. This gives both you and the employee time to see if the role is a good fit.

• Maximum duration: The probation period cannot be longer than three months.
• Extension: If you agree to a probation period shorter than three months, you can extend it once, but the total time cannot exceed three months.
• Termination: During the probation period, either you or the employee can terminate the contract immediately without giving a reason.

Working hours & overtime

Standard working hours in Hungary are straightforward, but there are specific rules for overtime.

• Standard hours: A typical work week is 40 hours, usually eight hours per day, five days a week.
• Maximum overtime: You can ask employees to work up to 250 hours of overtime per calendar year. With a collective agreement, this can be extended.
• Overtime pay: Overtime work requires extra pay. For work on a regular workday, the supplement is 50%. For work on a weekly rest day or public holiday, it's a 100% supplement, or 50% plus an additional rest day.

Public & regional holidays

Employees in Hungary are entitled to paid time off for public holidays. Here are the public holidays for 2025:

Hiring contractors in Hungary

You can hire independent contractors for project-based work, which offers flexibility. However, it's crucial to classify them correctly.

An independent contractor works autonomously, sets their own hours, and uses their own tools. An employee, on the other hand, works under your direct supervision and follows your company's schedule.

Misclassifying an employee as a contractor can lead to serious consequences, including fines, back taxes, and other legal penalties. The authorities in Hungary monitor this closely.

An Employer of Record (EOR) can help you avoid these risks. An EOR acts as the legal employer for your workers, ensuring they are classified correctly under Hungarian law. This means the EOR handles all the administrative tasks, like payroll, taxes, and benefits, while you manage the employee's day-to-day work. Using an EOR simplifies the hiring process and ensures you stay compliant with local labor laws.

In Hungary, your payroll process is straightforward. You pay employees monthly in Hungarian Forint (HUF). You must provide a payslip detailing earnings and deductions. While a 13th-month salary isn't required, you can offer it as a bonus.

Payroll cycles & wage structure

You should pay your employees monthly. Payments are due by the 10th of the following month. Salaries are typically fixed and outlined in the employment contract. You can pay in cash or through a bank transfer.

Overtime & minimums

The standard workweek is 40 hours, typically eight hours per day, five days a week. Any work beyond these hours is overtime. Overtime pay is 150% of the regular rate. For work on weekends or public holidays, the rate increases to 200%. There's a cap on overtime, generally 250 hours per year.

As of 2025, the monthly minimum wage is HUF 290,800. For jobs requiring a secondary-level qualification, the guaranteed minimum wage is HUF 348,800 per month.

Employer taxes and contributions

You are responsible for paying social contribution tax on behalf of your employees.

Employee taxes and deductions

You must withhold taxes and social security contributions from your employees' gross salaries.

In Hungary, the benefits and leave system is a mix of government-mandated programs and supplemental perks offered by employers. The social security system covers the basics like sickness, maternity, and old age. Employers then build on this foundation. This approach gives you a solid starting point for your team's compensation package.

Statutory Leave

Hungarian law sets minimum leave requirements for all employees.

• Annual Leave: Employees get a minimum of 20 paid vacation days per year. This amount increases with age, reaching a maximum of 30 days for employees over 45.
• Sick Leave: If an employee gets sick, they are entitled to 15 days of sick leave paid by you, the employer, at 70% of their salary. After 15 days, the Hungarian Social Security system takes over the payments.
• Maternity Leave: Mothers receive 24 weeks of maternity leave.
• Paternity Leave: New fathers are entitled to paternity leave.
• Parental Leave: Both parents can take unpaid leave to care for a child.

Public Holidays & Regional Holidays

Your team in Hungary is entitled to paid time off for public holidays. If a holiday falls on a weekend, the day off is usually lost.

Typical Supplemental Benefits

Many companies offer benefits beyond the legal requirements to attract and retain talent.

How an EOR Can Help with Setting Up Benefits

Setting up a competitive and compliant benefits package in a new country is complex. An Employer of Record (EOR) simplifies this process for you.

We handle the administrative burden of managing benefits. This includes everything from enrolling employees in mandatory social security to sourcing and managing supplemental insurance plans. We make sure your benefits package complies with all Hungarian laws. This saves you time and reduces the risk of legal issues.

An EOR helps you offer competitive benefits that attract top talent. We have local market knowledge and can advise you on what other companies in your industry are offering. This allows you to create a package that is both attractive to employees and fits your budget.

When you part ways with an employee in Hungary, you need to follow a clear process. It’s not just about saying goodbye. You must handle the termination and offboarding correctly to stay compliant with local labor laws. This involves providing written notice, having a valid reason for the dismissal, and making sure all final payments are calculated correctly.

Notice periods

When you terminate an employment contract, you must provide a notice period. The legal minimum is 30 days. This period increases based on how long the employee has worked for your company.

Here is a breakdown of the minimum notice periods:

You and your employee can agree to a longer notice period in the employment contract, but it cannot be shorter than these legal minimums. During the notice period, you must release the employee from work for at least half of the time.

Severance pay

Employees are entitled to severance pay if you terminate their employment. The amount depends on their length of service. Severance pay is not typically required if the termination is due to the employee's behavior or performance.

How Rivermate handles compliant exits

When you use an Employer of Record like Rivermate, we manage the entire offboarding process for you. We make sure every termination is fair, compliant, and handled with care.

Here’s how we help:

• Documentation: We prepare and deliver all necessary legal documents, including the written termination notice.
• Calculations: We calculate the correct notice period and any severance pay based on the employee's service time.
• Final Payroll: We ensure all final payments, including unused holiday pay, are processed correctly and on time.
• Guidance: We provide expert advice on Hungarian labor laws to make sure you understand your obligations as an employer.

We handle the complexities of offboarding so you can focus on your business.

Getting a visa to work in Hungary involves a few key steps. If you are not a citizen of the European Union, you will generally need a permit to be employed. The most common route is a "Single Permit," which combines your residence and work authorization into one application. This permit is typically valid for up to two years and can be renewed. Your employer in Hungary will need to sponsor your application and often has to prove that no suitable Hungarian or EU candidate was available for the job.

Employment visas & sponsorship realities

An Employer of Record (EOR) can be a practical way to handle visa sponsorship in Hungary. An EOR with a registered legal entity in the country can sponsor the most common type of work permit for full-time foreign employees. This means you don't have to set up your own local company to hire someone.

Here are the key realities:

• Sponsorship is necessary: For most long-term roles, you need an employer to sponsor your work permit.
• EORs can sponsor: A compliant EOR can act as your legal employer in Hungary and manage the visa process.
• Contractors are different: Independent contractors typically cannot be sponsored for a standard employment visa.

Business travel compliance (short‑term visits)

For short-term business trips, the rules are different. If you are a non-EEA national and your stay is less than 90 days, you may need a short-term work permit. Even if you are not directly employed by a Hungarian company, your sponsoring company will need to apply for this permit. Some visas may limit your stay to 30 days, so it's important to have the right authorization for your visit. Always check the specific requirements based on your nationality and the nature of your business activities to ensure you are compliant.