Good to know
Hungary has labour laws in place to regulate employment relationships. These laws cover various aspects of employment, including working hours, overtime, termination, and employee rights.
Are you ready to hire in Hungary?
Labour costs in Hungary are generally lower than in many Western European countries, making it an attractive destination for cost-conscious businesses looking to maintain high-quality talent at a competitive cost.
Hungary offers a relatively business-friendly environment with a simplified tax system and various incentives for foreign investors, including grants, tax credits, and special economic zones.
Want to know more?
Call us today at: +44 (0) 333 034 1068
The minimum wage for unskilled labour is 232,000 HUF, and for skilled labour, it amounts to 296,400 HUF. Collective bargaining agreements may also establish specific minimum wage levels.
Standard Working Hours
The standard working week in Hungary consists of 40 hours a week, typically 8 hours a day for a five-day working week. The working week is Monday – Friday.
Any work performed beyond the regular working hours is considered overtime and is subject to the regulations outlined in the employment contract or collective agreements. Overtime work is allowed if the daily maximum of 12 working hours respected and compensated at 50% of the employees wage.
In Hungary, payroll is processed on a monthly basis. Compensation for work performed from the first to the last day of the month is usually paid on the last working day of the month. Regarding the 13th salary, it is not obligatory by law in Hungary. Employers have the discretion to provide bonuses or a 13th-month salary to employees if they choose to do so.
Paid time off
Every employee is granted of 20 days of annual leave, with an increase based on the employee’s age, reaching a maximum of 30 days for those aged 45 and above.
Sick pay rules in Hungary entitle employees to receive statutory sick pay for the first 15 days of leave, typically amounting to 70% of their average earnings. Beyond this initial period, extended sick pay may be provided by the Hungarian Social Security system if the illness continues. The specific amount and duration of extended sick pay depend on various factors, such as the employee’s contributions and the length of their sickness. To qualify for sick pay, employees generally need to present a medical certificate issued by a doctor.
Employees have the right to 24 weeks of maternity leave. During the initial 6 months, they receive the Pregnancy and Confinement Benefit (CSED) at a rate of 70% of their salary, which is provided by the National Health Insurance Fund of Hungary (NEAK).
Employees are also entitled to 5 days of paid paternity leave, which must be taken within 2 months after the birth of the child.
Termination of Employment
In Hungary, when it comes to termination of employment, both the employee and the employer are required to submit written notices with valid justifications for dismissal. Additionally, the amount of severance pay is determined based on the duration of the employee’s service with the company.
In Hungary, the notice period is 30 days. However, this can be extended depending on the employees length of employment and their job role.
The employer and employee have the option to mutually establish a probationary period lasting a maximum of three months. Within this period, the employment relationship can be terminated without advance notice and without the need to provide a specific reason for the termination.
Foreign nationals seeking employment in Hungary must apply for one of the following work permits based on their intended duration of work:
– Individual work permit: which is designed for those who plan to work in Hungary for a period not exceeding 90 days.
– Joint work permit: Applicable for foreign nationals aiming to work in Hungary for more than 90 days within a 180-day time period.
Additionally, there are residence permits available for short stays of up to 90 days, and a single application procedure is available for non-EEA nationals who intend to reside in Hungary for more than 90 days within a 180-day period. The latter permit requires the applicant to have an employment relationship with a Hungarian employer.
The standard rate of VAT in Hungary is 27.00%.