Overview

Capital
Budapest
Currency
Forint (HUF)
Date Format
yyyy.mm.dd.

Taxes

Employer
0.74% - Health Care Contribution for Financial Allowance
19.50% - Social Contribution Tax
1.50% - Vocational Training Fund
Employee
4.00% - Health Care Contribution for Inkind Fund
3.00% - Health Care Contribution for Financial Allowance
20.00% - Pension Fund
1.50% - Vocational Training Fund

Minimum Wage

General

 As of January 1, 2020, the monthly minimum wage for an unskilled employee in Hungary is 161,000 HUF. 

For a guaranteed skilled employee, the monthly minimum wage is 210,600. 

Payroll

Payroll Cycle

Pay date is at the end of the month. 

Working Hours

General

Full Time employment is considered 40 hours weekly, and 8 hours daily.

Overtime

Overtime work is paid at 150% regular wages. 

Payroll Contributions

Social Security

Contributions are made as 33% of average earnings for the first ten years of coverage. * From years 11 - 25: 2% is added each year. *From years 26 - 36 : 1% is added. * From years 37 - 40 : 1.5% is added. * From year 40 onward: 2% is added.

Pension Fund

27% of gross monthly payroll in the form of a social contribution tax. The minimum earnings used to calculate contributions are the monthly minimum wage. The monthly minimum wage is 111,000 forints. There are no maximum earnings used to calculate contributions. The employer's contributions also finance work injury benefits, sickness and maternity benefits, and unemployment benefits.

Leave

Maternity Leave

In Hungary, mothers are entitled to 24 weeks of paid maternity leave and must begin at least 4 weeks before the expected due date. A minimum of 6 weeks maternity leave after the birth of the child is mandatory.  Maternity leave is paid at the rate of 70% of the regular pay. 

Paternity Leave

The father is entitled to 5 days of paid maternity leave and must be taken within the first 2 months after the birth of the child. 

Parental Leave

After the maternity leave is over, one parent can take parental leave up until the child reaches the age of 2 years old. This leave is paid at the rate of 70% but is capped at double the minimum daily wage.  

In addition, one parent is entitled to additional paid time off:

  • 2 additional days for 1 child
  • 4 additional days for 2 children
  • 7 additional days for more than 2 children

This additional leave is granted up until the child reaches the age of 16 years old.

Termination

Termination Process

Both the employee and employer must provide termination in writing and must contain a justified reason for dismissal. 

Notice Period

Notice period for both the employee and employer is at least 30 days, however, is extended based on the duration of employment:

  • At least 3 years of employment- an additional 5 days of notice
  • 3-5 years of employment- an additional 15 days of notice
  • 5-8 years of employment- an additional 20 days of notice
  • 8-10 years of employment- an additional 25 days of notice
  • 10-15 years of employment- an additional 30 days of notice
  • 15-20 years of employment- an additional 40 days of notice
  • 20+ years of employment- an additional 60 days of notice

There are circumstances that allow for termination without notice:

  • Gross negligence
  • Conduct that would create an impossible employment relationship
  • Criminal misconduct
Severance Pay

Severance payment is only applicable in the even that the employer initiates the termination process.  Severance pay depends on the length of employment:

  • Up to 3 years- 1 months’ severance pay
  • 3-5 years- 2 months’ severance pay
  • 5-10 years- 3 months’ severance pay
  • 10-15 years- 4 months’ severance pay
  • 15-20 years- 5 months’ severance pay
  • 20-25 years- 6 months’ severance pay  

VAT

General

27% standard rate.