Effortless Hiring in Hungary

Employment Contracts

• Employment contracts must be in writing and should include essential terms such as:
• Job descriptions.
• Compensation.
• Working hours.
• Leave entitlements.
• Employers are obligated to inform employees in writing within seven days from the start of employment about various aspects, including daily working hours and remuneration components.

Probationary Period

• The probationary period is typically three months for most employees but can be extended up to six months for positions of technical complexity or high responsibility. During this period, either party can terminate the employment without prior notice.

Payroll Frequency

• Employees are generally paid on a monthly basis, with payments made at the end of each month.

Minimum Wage

• As of April 1, 2024, the guaranteed minimum wage is set at HUF 200,000 per month for full-time employees aged 25 and over. For employees aged 18 to 25, the minimum wage is HUF 150,000.

Overtime

• Standard working hours are typically 40 hours per week. Overtime is compensated as follows:
• 125% of the regular hourly rate for the first hour on a working day.
• 137.5% for subsequent hours on a working day.
• 150% for each hour worked on a rest day or public holiday.
• Overtime is limited to a maximum of 50% of normal working hours in a single day, with a maximum of 200 hours per year.

Employee Contributions

1. Social Security: Employees contribute approximately 13.07% of their gross salary to social security.
2. Personal Income Tax (PIT): Hungary employs a flat personal income tax rate of 15% on gross income.

Employer Contributions

1. Social Security: Employers contribute approximately 27% of the employee's gross salary to social security funds.
2. Labor Accident Insurance: Approximately 1.75% of the employee's gross salary.
3. Wage Guarantee Fund (WGF): Approximately 1% of the employee's gross salary.

Types of Leave in Hungary

1. Annual Leave

• Employees are entitled to a minimum of 20 days of paid annual leave after completing one year of service. This entitlement increases with age and years of service.

2. Sick Leave

• Employees are entitled to at least 15 working days of paid sick leave annually if they are unable to work due to health problems. The employer must pay 70% of the absence pay during this period.

3. Maternity Leave

• Female employees are entitled to 24 weeks of maternity leave (with at least one week taken before the expected due date). The first 15 weeks are paid by social security.

4. Paternity Leave

• Male employees are entitled to 5 days of paid paternity leave following the birth of their child.

Mandatory Benefits

1. Social Security Benefits: Contributions cover health benefits, invalidity benefits, old-age pensions, family benefits, and unemployment benefits.

2. Health Insurance: Employees have access to Hungary's healthcare system through mandatory contributions.

Notice Period

• The required notice period varies based on length of service:
• Less than 2 years: 4 weeks.
• Between 2 and 5 years: 6 weeks.
• More than 5 years: Notice periods can extend up to 8 weeks.

Severance Pay

• Employees dismissed without serious cause are entitled to severance pay calculated based on their length of service and salary.

Dismissal Procedures

• Employers must have valid reasons for termination, which can relate to performance or operational needs. Specific procedures must be followed, including providing written notice and adhering to applicable notice periods.