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Employee Leasing in Hungary

As an EU member, Hungary offers access to a market of nearly 500 million people. The country’s favorable location in the center of Europe and well-developed infrastructure connecting it to major European markets make it a privileged destination for business expansion at competitive costs.

Thanks to the employee leasing services offered by FMC Group, businesses can explore their potential in Hungary and the entire region of Central and Eastern Europe with ease and without having to worry about local administrative and legal regulations. Employee leasing also gives clients great flexibility and significantly reduces business expansion costs.

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Stephan Dorn FMC Group

Content:

  • Advantages of Employee Leasing in Hungary
  • Employee Leasing Services Offered by FMC Group
  • Advantages of the Hungarian Market
  • Recruitment in Hungary
    • Minimum Wage and Payroll
    • Social Contributions and Taxes
    • Working Hours and Overtime
    • Vacation Days
    • Parental Leave and Sick Leave
    • Notice Period

Advantages of Employee Leasing in Hungary

  • Employee leasing in Hungary allows businesses to quickly expand their activity into the EU with highly-reduced costs compared to some other European locations.
  • Expanding into Hungary through employee leasing gives companies the opportunity to take control of a highly-skilled local team that is already well-familiarized with the local business environment and the potential it offers.
  • Employee leasing services help businesses hire the best talent available thanks to well-tailored job advertisements and scrutinous candidate screening.
  • Employee leasing allows companies to immediately expand their activity into Hungary, without the need for setting up a local company or working on administrative procedures related to recruitment, allowing them to put their entire focus on their business growth strategies.

Employee Leasing Services Offered by FMC Group

  • We select the best candidates that match your requirements after an extensive search;
  • We conclude employment contracts after negotiations;
  • We provide payroll accounting services that respect international standards;
  • We pay taxes and social contributions according to the Hungarian labor law;
  • We pay various expenses and allowances after your approval;
  • We monitor paid vacation days of your employees;
  • We implement private health insurance at competitive rates if requested;
  • We maintain constant contact with you regarding the management of your employees.

Management and Reporting Flow of Employee Leasing Services

Management and Reporting Flow Chart

Advantages of the Hungarian Market

  • The location of Hungary at the center of Europe makes it one of the best destinations for business expansion. The country is located at the crossroads of three major transport corridors: The Mediterranean Corridor running through six countries from Spain to Hungary, the Orient/East-Med Corridor running through nine countries from Germany to Cyprus, and the Rhine-Danube Corridor running through five countries from France to Romania.
  • Hungary offers world-renowned infrastructure, including a 1,880-kilometer motorway network with direct connections to Austria, Slovakia, Romania, Ukraine, Serbia, and Slovenia, as well as a 7,700-kilometer railway network connecting Hungary to all of its neighboring countries.
  • The telecommunications infrastructure in Hungary is highly-developed, with 4G internet coverage available across the entire country, while 5G coverage is available in the majority of metropolitan areas. Broadband internet is also available all over the country, with a speed of at least 100 Mbps in around half of the Hungarian households.
  • Hungary is home to more than 27,000 foreign companies that decided to benefit from the country’s low labor costs and privileged location, including over 4,000 German companies and 3,800 from Austria.
  • Hungary has a friendly legal environment that is completely harmonized with EU standards. Hungary’s EU membership also allows it to offer advantageous trade opportunities thanks to the preferential agreements signed by the EU.

Recruitment in Hungary

Minimum Wage and Payroll

  • The minimum monthly wage in Hungary is set at HUF 200,000 (EUR 523) for unskilled labor and HUF 260,000 (EUR 679) for skilled labor.
  • Salaries are paid monthly, usually on the last working day of the month. The payment of salaries should not be delayed for more than 10 days in the following month.
  • A 13th-month salary bonus is not mandatory in Hungary. Instead, yearly performance-based bonuses are common.

Social Contributions and Taxes

Employer Contributions
Social Contribution Tax 13.00%
Total 13.00%
Employee Contributions
Pension Fund 10.00%
Health Care Contribution 7.00%
Unemployment Fund 1.50%
Total 18.50%
Employee Income Tax
Employees under the age of 25 0.00%
Employees at the age of 25 and over 15.00%

 

Working Hours and Overtime

  • The legal working hours limit in Hungary is set at 40 hours per week and eight hours per day.
  • Overtime work is possible but it cannot exceed eight hours per week or, in the case of stand-by jobs, 32 hours per week.
  • Overtime work is paid at a rate 50% higher than the basic salary on regular working days and 100% higher on weekends and public holidays.

Vacation Days

  • Employees in Hungary have the right to 20 days of paid vacation per year, which gradually increases according to the employees’ age to a maximum of 30 days when they become over 45 years old.
  • Employees with children have the right to additional paid leave days every year: Two extra days for employees with one child, four extra days for two children, and seven extra days for three children and above.
  • If one of the children is with disabilities, extra vacation days are increased by two more days.
  • Hungary celebrates 12 public holidays:
    • New Year’s Day: January 1st;
    • Revolution Day: March 15th;
    • Good Friday and Easter Monday: Between late March and late April (moveable);
    • Labor Day and Mother’s Day: May 1st;
    • Pentecost Monday: Between late May and late June (moveable);
    • Father’s Day: Third Sunday of June;
    • Saint Stephen’s Day: August 20th;
    • Republic Day: October 23rd;
    • All Saints’ Day: November 1st;
    • Christmas Holiday: December 24th-26th.

Parental Leave and Sick Leave

  • Female employees in Hungary have mandatory maternity leave of 24 weeks but they can take up to three years of leave. For the first six months of leave, mothers receive 70% of their regular salary covered by the Infant Care Payment (CSED). For the following 18 months, until the child is two years old, mothers are entitled to a Child Care Fee (GYED) at a rate of 70% of their salary, but it is capped at double the minimum wage. In the third year, payment equals the minimum pension – HUF 28,500 per month (EUR 75), and it is covered by the Child Home Care Allowance (GYES).
  • New fathers are entitled to five days of paid paternity leave, or seven days in the case of multiple or complicated births, that can be taken within the first two months following birth.
  • Employees can take up to one year of paid sick leave. For the first 15 days of leave, employers have to cover their employees’ pay at a rate of 70% of the regular salary. Afterward, pay is covered by the employer (one-third) and by the National Health Insurance Fund (two-thirds).

Notice Period

  • The minimum notice period in Hungary is set at 30 days. However, starting from the third year of service, the minimum notice period starts to increase according to the table below:
Years of Service Additional Days of Notice Required
+3 years 5 days
+5 years 15 days
+8 years 20 days
+10 years 25 days
+15 years 30 days
+18 years 40 days
+20 years 60 days

Disclaimer: Although we carefully researched and compiled the above information, we do not give any guarantee with respect to the actuality, correctness, and completeness.