Coberon Chronos provides EOR services for clients who want to hire employees and run a full payroll without establishing an entity in Hungary.

In Hungary, your candidates get hired by CoberonChronos’ PEO legal entity in accordance with local Labor Code and can be onboarded in days by signing an employment contract we can provide in the required language of Hungarian. The employed is eligible and assigned to work with and on your company’s behalf exactly as if he or she were your employee in-country. We prepare the monthly salary, benefits and allowances payroll based on timesheet provided and we calculate all expense reimbursement costs too. 



The Hungarian labor market is well regulated and governed by the local labor code which protects the employees’ rights. There are specific rules and procedures that must be followed in cases of new employment, working times, day-offs, termination, illness. The labor law also very strongly protects employees being on maternity/paternity leave. Companies can be fined and sanctioned if they do not follow the statutes. The labor code has a specific section for local employee-leasing, and also permitting collective bargaining and works councils which both represent employees' rights.

There is licensing requirement for Hungarian temporary agencies providing EOR/PEO services.

Companies hiring people to work on behalf of other coompanies in Hungary, as part of an EOR are legally require to have an agency licence for temporary work. As we take pride in following the local law, it is a great advantages for our clients that any local employee is not at risk with being employed by a licenced service provider.

Best Practices in Hungary

It is very important that when the negotiating is on for the terms and condition of a new employment, the offer letter is advised to be revised locally and finalized in a written format, but possibly get signed by both parties. Offer letter needs to include an expiry date, usually 7 or max. 14 days recommended.

Employment contract

Generally, an employment contract can be executed for a definite or indefinite period of duration.
Fixed-term contracts are allowed for up to a max. 5 years period (including breaks) if they are for temporary, seasonal work or EOR. The number of fixed-term employment contract extensions between the same parties are not limited anymore but each subsequent contract must be renewed in written signed by both parties. 

Employment contracts must be in writing in the local (Hungarian) language and include the below terms and conditions:
- start date and contract period
- job title and classification number of this occupation*
- weekly working hours (for example: 40 hrs/week for a full time contract) 
- probationary period (max. 90 calendar days allowed)
- monthly base gross salary (which must be always stated in the local currency of HUF / Hungarian Forint)
- a job description with responsibilities, duties. 

* Classification number is announced by the state. 

If the employee’s monthly base gross salary is previously agreed in foreign currency like USD or EUR, than still the amount must be exchanged to Hungarian Forint and written into the contract with the daily exchange rate it was calculated with. In case of no exchange rate is stipulated or agreed on , than the publicly announced daily exchange rate of the Hungarian Monetary Bank is applicable of the day the contract was signed on. It is all required because the monthly payroll must be done and reported in the local currency. 

Any employment contract must be signed at least one working day before the planned start date in order to file the necessary hiring report locally and for an adequate social security coverage from day one. 

Local employer has the individual right to the content of its employment contract, can even stipulate the contract period and no 3rd party or even client has the right to require to change its content and wordings. Local employer should not required to share the signed employment contract to any 3rd party without the written consent of the employee or vica versa. In case of statutory tax or work audits, the employee have to be informed on.


Salary payment

Payroll cycle is monthly. The net salary payment can be done with bank transfer following the subject month but not later than the 10th calendar day. In case of this day is on a weekend or on public holiday the salary should be paid before.

Local employer has the right to pay the net salary any day until the 10th calendar day following the subject month. In case of a delay the Labor Code stipulates the applicable default interest. 


Probationary period

The local Labor Code specifies that the probationary period can be set up to 3 months (equals to a max. 90 calendar days).

Public Holidays in Hungary

Hungary celebrates several public holidays for which employees are given the day off, including:
New Year’s Day: January 01
National Day / Memorial Day of the 1848 Revolution: March 15
Good Friday / Friday before Easter Sunday: varies yearly 
Easter Monday: varies yearly
Labor Day / Anniversary of the accession to the EU: May 1
Pentecost Sunday: May 21
Saint Stephens Day: August 20
Republic Day: October 23
All Saints Day: November 01
Christmas Day: December 25
Second Day of Christmas: December 26

13th month salary

In Hungary, the 13th month salary is not mandatory, however if it is offered than all employees must receive it on the equal rights specified in the Labor Code.

Bonus payments

It is entirely up to the employer what bonus to pay or whether to pay at all. Any employee may receive for example individual bonuses based on performance and its key factors or based on corporate structure bonus plan linked to individual/department/corporate performances.

Standard Working Hours

In Hungary, the standard working time is 8 hours a day, 5 days a week in full-time jobs.
In principle, the weekly hours have to be split equally among the working days, and same rule goes for the part-time work schedule as well. 
Employees have the right to at least 11 hours of undisturbed rest between daily work schedules and 2 days full rest for each week. Days free of work are Saturdays, Sundays (called resting days) and public holidays. 

Employees can work no more than 250 hours in overtime per year. 

Extraordinary hours (commonly called OT hours) requires special payroll:

- Employee is entitled to a +50% allowance on top of the normal gross salary for overtime hours worked on normal workdays,
- Employee is entitled to double remuneration for hours worked on resting days (incl. Saturdays, Sundays, public holidays) or +50% remuneration if an extra (full) day-off is offered within 7 days.

- Employee is entitled to special +15% remuneration for hours worked during nights (between 10.00pm - 6.00am) and other allowance may also applicable depending on the work schedule indicated on timesheets.

- For the stand-by and on-call duty works, there are other rules to follow and can only be required for specific jobs, job titles. Stand-by and On-call duties are also maximized in 180 hours per year.

However, in accordance with the Labor Code, working hours may be arranged unequal by the local employer for specific schedule (monthly period is the most common but not longed then 4 month or 17 weeks) and for specific jobs within the legal limits, and the resting rules must be followed for such work schedules. Unequal work schedules must be announced in a written schedule min. 7 days the work schedule starts. However, EOR service provider may only offer other then standard working schedules to local employees if end-client is a registered local company in Hungary.

Employee's working hours must be recorded and the documented on monthly timesheets (commonly called as attendance sheet) in respect to hours worked must be signed with both employee and employer. There is timesheet drafts we recommend to be used based on local requirements to record worked standard or extraordinary (for example OT) hours properly for payroll.

Offsite work (such as working in home-office) requires no attendance sheet, but timesheets are recommended. Offsite work is allowed for specific nature of jobs and titles such as information technology (IT) related jobs where work can be done and provided through computer, internet and phone connections.

Vacation in Hungary

Employees are entitled to be paid annual leave based on the time spent at the contract. The days increases based on the age of the employee and the number of children in the family:

Up to the Age of 25: 20 days
From the Age of 25: 21 days
From the Age of 28: 22 days
From the Age of 31: 23 days
From the Age of 33: 24 days
From the Age of 35: 25 days
From the Age of 37: 26 days
From the Age of 39: 27 days
From the Age of 41: 28 days
From the Age of 43: 29 days
From the Age of 45: 30 days
+ extra vacation days are applicable both to mother and father based on the number of children:

For 1 child: + 2 days
For 2 children: + 4 days
For 3 children or more: + 7 days

Vacation time shall be allocated in the subject year in which it is due and minimum 7 consecutive days shall be given to employee based on employee’s request (employee has the right to decide on which days the consecutive 7 days are taken within the year) but still a longer vacation must be allocated to contain at least 14 consecutive days at a time in subject year (public holidays and weekend resting days can be calculated into the 14 days). These 7 and also the 14 consecutive days vacation rules are important to be followed without exception in Hungary.

If the employment relationship commenced on the 1st of October or subsequently, the employee shall be entitled to get vacation time by 31/March of the next year latest.

Employees’ paid leave entitlements and the leaves taken should be recorded and the documents in respect to leaves must be signed with both employee and employer.

If an employee starts or ends work part way through a year than he is entitled to paid leave on a pro-rata basis. 

Sick Leave

An employee is entitled to 15 sick-leave days yearly while enrolled in the national social security system. During this 15 days of period employees must receive 70% of their base gross salary which is paid by the Employer. 

After 15 days, the amount paid varies from 50% – 70% depending employment social security coverage the employee has had 760 days backwards. 

The sick leave allowance gets paid one third by the employer and the remaining amount is paid by the state.

If work/ occupational related accident or illness happens and the employee is unable to perform the work due to it then 4 days or more but less than 3 months, the employer must pay the injured employee at a rate of pay of at least 90%, in some cases even 100% from the first day of injury until the employee returns to work. If the employee is unable to work for a period longer than 3 months, the employee must claim compensation from the State compensation fund.

Sick leave is required to be proved by a medical certificate issued by a local certified doctor (GP). Such certificate is to be provided to the employer immediately in 8 days. 

Maternity/Paternity Leave

Women have 24 weeks maternity leave, but are allowed to take up to three years off and receive maternity benefits. For the first six months, a woman receives 70 percent of her base salary paid by the State; this support is called Pregnancy and Confinement Benefit. For the next eighteen months, until the child’s second birthday, a Child Care Fee (GYED) is available, however the employee is entitled to work part time and still receiving this benefit by the State.
The amount paid is 70 percent of the previous earnings of the parent taking care of the child; however it is capped, and cannot be higher than 70 percent of twice the minimum daily wage. Actually, the maternity leave have to start 4 weeks prior to the scheduled delivery date unless the employee would like to work up to the delivery day on her own risk.

The father is entitled to 5 (five) days off for paternity leave which the employer must allocate within two months following the date of birth upon the father’s request. The father is also entitled to take unpaid leave until the child reaches 3 years of age.

Business travelling

Generally, if employees are required to travel 15 or more days on business purposes they must be notified in written prior to 7 days before any business travels. The travel information should include the purpose of the business trip, the duration and location(s), the applicable wage and non-wage allowances incl. the daily per-diem amounts, the travel expense reimbursement and returning conditions.

Termination of Employment Contract, Severance in Hungary

An employment relationship may be terminated:
- by mutual consent;
- by notice;
- by dismissal without notice.

The reasoning shall clearly specify the grounds for termination. The burden of proof to verify the authenticity and substantiality of the grounds of the act of termination shall lie with the party taking the legal act. The employment can not be terminated during the period or a maternity/paternity leave and based on other special reasons local Labor Code specifies. 
The employer can set a probationary period in the employment contract and during this period the contract can be terminated by either party, but no explanation for reason is required. 

The employer may terminate the definite period of time contract with explanation or no explanation, but the gross base salary for the remaining period of the original contract must be paid within 5 days the written termination is handed over to employee. 

When terminating employment, either party must provide a notice period of at least 30 days but no more than one year. The 30-day notice period must be extended by the following:
- 5 days after 3 years of employment
- 15 days after 5 years of employment
- 20 days after 8 years of employment
- 25 days after 10 years of employment
- 30 days after 15 years of employment
- 40 days after 18 years of employment
- 60 days after 20 years of employment
The employee is entitled to severance pay if the employer terminates the employment by ordinary termination (as a result of the employee’s work or performance ability well documented, behavior in relation to the employment relationship or the employer’s banckruptcy economic reasons). The following payments apply:

1 month base gross for up to 3 years of employment
2 months base gross for up to 5 years of employment
3 months base gross for up to 10 years of employment
4 months base gross for up to 15 years of employment
5 months base gross for up to 20 years of employment
6 months base gross for up to 25 years of employment

The employment contract can be terminated by mutual consent with agreed terms between Employer (Employer of Record) and Employee.

Employment Taxes in Hungary

Applicable from Jan/1/2020
The employer pays into social security at a rate of 19.00% monthly. Additional monthly 'rehabilitation tax' is applicable for each employee (average 1,4% but min. 6,000 HUF / employee per month) and payable quarterly.

Employee's contributions are the Personal Income Tax / SZJA (15%) and other, lower rate contributions such as pension, social security for health insurance and labor market contribution. Both Employer's and Employee's taxes and social contributions may vary year by year or even from a specific date may announced by the government in Hungary.

Health Insurance in Hungary

Hungary provides a full medical coverage to all citizens and foreign citizen employees with work permits being on a full payroll based on employment contract and based on the specific payroll contributions as one source of such coverage funding. Private health insurances are not required, but in case provided than it is taxable as salary.

Additional Benefits in Hungary

Non-statutory (or non-wage) benefit can be offered by employer in Hungary on individual bases and a wide range of benefits can be given to the employee which are specified in our informational brochure of Non-Statutory Benefits in Hungary. In case of a special benefit plan (called Cafeteria) can be or is already in place by the local employer in Hungary, than this plan has to be offered for each employee on equal benefit rights. 

Expense reimbursement

Expense reimbursement requires adequate and monthly administration based on personal income tax laws for statutory and even non-statutory expense reimbursements. Most expense reimbursement is taxable as salary since Jan/1/2020.

Work Permits

Since Hungary is a member of the European Union (EU) as well as a party to the Schengen Treaty, differing rules and conditions apply to EU/EEA nationals compared to non-EU/EEA nationals. There are different types of residence and work permits issued in Hungary which include individual work permit, individual work permit within a collective residence permit. Restrictions apply for non-EU/EEA national (such as EOR-based employment can not be offered for such nationals).


In Hungary to hire a small or large number of staff can be time consuming, expensive and complex without the extensive knowledge of the local Labor Code but mostly to apply it to the best practices.

We can help your business to hire your candidates, handle all the hiring administration and payroll and ensure that you’re in compliance with local labour laws, without the burden of setting up a large office or subsidiary abroad in a rush. 

Our employment services lets you focus on running your key business in a new country.

If you have an immediate EOR needs or just would like to discuss how we can provide a seamless temp staffing, contingent workers solutions for hiring employees in Hungary, please contact us at