Employment Law

Hungarian Employment Contract

Employers in Hungary are required to provide their employees with a written employment contract. Most contracts are of indefinite duration and are expected to be indefinite.

Each contract should be written in the local Hungarian language, in the local currency of the Hungarian Forint, and include all relevant employment terms such as wages/wages, vacation allowance, etc.

Fixed Term

Indefinite

Working Hours in Hungary

Hungarian employees normally work 40 hours a week, 8 hours a day, for 5 consecutive days. Working hours exceeding this standard shall be paid at an overtime pay of no less than 150% of the normal wage, and workers shall not work more than 250 overtime hours in a year.

Holiday Policy

Hungary Vacation

Workers in Hungary are entitled to at least 20 days of paid leave per year. As employees age, this increases:

• Under 25 years old = 20 days off
• 25 years old = 21 days
• 25-30 = one more day every three years
• 31-45 = one more day every two years
• 45+ = 30 days

Hungarian Sick Leave

Any employee registered in the state social security scheme is entitled to a minimum of 15 days of sick leave. During this period, they receive 70% of their regular salary, paid by their employer. Beyond the initial 15-day period, compensation will be reduced to approximately 50-60% (the exact amount will vary depending on the specific terms of employment and length of service). Employers must pay one-third of this, with the government paying the remaining amount.

Parental Leave in Hungary

Hungarian female workers are entitled to 24 weeks of paid maternity leave, with a salary of 70% of the average salary. Male employees are entitled to five days of paternity leave, which must be used within two months of the birth of the child.

Termination and Severance in Hungary

There are no legally prescribed limits on probationary periods in Hungary, but probationary periods are almost always kept to a reasonable length, i.e. a few months at most.

Employees must be given at least 30 days' notice of termination. This minimum period increases based on years of service:

• Three years of work = five extra days
• Five years of service = 15 extra days
• Eight years of work = 20 extra days
• Ten years of work = 25 extra days
• 15 years of service = 30 extra days
• 18 years of service = 40 extra days
• 20 years of service = 60 extra days

If employees are laid off under certain circumstances, they are also entitled to severance pay, which can range from one to six months depending on length of service, with an additional three months of severance pay available if the employee retires within five years.

Hungarian Taxes

Employers in Hungary are required to contribute approximately 27% of wages to a compulsory social security fund. Employees are required to pay 9.5% and 7.5% respectively for social insurance and health insurance.

The income tax rate in Hungary is 15%.

Health Insurance in Hungary

Hungary has national healthcare, so employees are covered and therefore employers are not required to provide private health insurance as a benefit.

Salary and Benefits

Hungarian Compensation Law

As of mid-2020, the minimum wage in Hungary was €487.10 per month.

Welfare Administration in Hungary

Employees in Hungary often expect benefits packages to be part of their employment agreement, so you may want to set up a benefits management system when recruiting in the country. But setting up and managing a benefits system in Hungary can be complex, especially if you're unfamiliar with the country's unique regulations and procedures.

Remoly can help you significantly simplify this step of your Hungary expansion by providing benefits administration outsourcing. Our team can advise you and handle the set-up of your benefits plan, allowing you to focus on expanding your organization in Hungary.