Employment in Hungary is governed by the Labour Code (Act I of 2012), supplemented by collective agreements. Income tax is a flat 15%, with generous exemptions for young people and mothers. Here is what employers need to know about leave, pay, tax and ending employment.
Annual leave in Hungary is made up of base leave plus extra days that depend on the employee’s age and children. Leave accrues pro-rata for employees who join or leave during the year.
Working days a year, plus age-based extra days from age 25 that reach 10 extra days at 45.
Working days a year, paid by the employer at 70% of the absence fee. Longer illness is covered by sickness benefit from the health insurance fund.
Pregnancy and confinement benefit (CSED) at 100% of average daily earnings, paid by the state for mothers with enough prior insurance.
Working days, to be taken by the end of the fourth month after the birth, in up to two parts. The employer pays and is reimbursed by the state.
Set up each Hungarian leave type in IceHrm with its own accrual, carry forward and approval rules, and use leave groups to give age-based and child-related extra days to the right people. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
Hungary has two statutory minimums: the general minimum wage and a higher guaranteed wage minimum for jobs that require at least secondary education or vocational qualifications. Both are set by government decree, usually from 1 January.
Gross, for full-time employees, for 2026.
Gross per month for 2026, for roles requiring secondary or vocational qualifications.
8 hours a day, 5 days a week. Working time can be averaged over a reference period (working time frame).
Overtime is capped at 250 hours a year, which a collective agreement can raise to 300 and a written agreement with the employee can add up to 150 voluntary hours. It is paid at a 50% premium or compensated with time off. Work on a rest day attracts a 100% premium (50% if another rest day is given), and work on a public holiday a 100% premium.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so you can track annual overtime against the legal cap and premiums reflect what was actually worked. Time & attendance →
Hungary levies personal income tax at a flat rate. Employers withhold tax and contributions from each payment and report them monthly to the National Tax and Customs Administration (NAV).
| Taxpayer | Rate |
|---|---|
| All residents (flat rate) | 15% |
| Employees under 25 | Exempt up to the cap |
| Mothers under 30 | Exempt up to the cap |
| Mothers of three or more children (from 1 October 2025) | Exempt |
| Mothers of two children under 40 (from 1 January 2026) | Exempt |
The exemption for mothers of two children is being extended to older age groups each year until 2029. A family tax allowance for dependent children also reduces the tax base.
Employer costs in Hungary are among the lowest in the EU, made up mainly of the social contribution tax. Employees pay a larger share through their own social security contribution.
Paid by the employer on gross pay, with no upper cap.
10% pension, 7% health insurance and 1.5% labour market contribution, withheld from gross pay.
Set by each municipality, up to 2% of adjusted net turnover rather than of payroll.
Build Hungarian pay the way you already structure it, with your own salary components, deductions and formula columns, such as social contribution tax and employee contribution columns. Want to know how well IceHrm handles payroll calculations for Hungary? Contact us or see Payroll →
Outside probation, an employer who ends an indefinite contract with notice must give a clear, genuine reason relating to the employee’s behaviour, ability or the employer’s operations. Notices must be in writing. Either party can end the relationship during probation with immediate effect.
| Service with the employer | Notice |
|---|---|
| Less than 3 years | 30 days |
| 3 years | 35 days |
| 5 years | 45 days |
| 8 years | 50 days |
| 10 years | 55 days |
| 15 years | 60 days |
| 18 years | 70 days |
| 20 years | 90 days |
Severance is due after at least 3 years of service when the employer dismisses the employee with notice (other than for conduct or non-health-related capability) or the employer ceases without a successor.
| Service with the employer | Severance |
|---|---|
| At least 3 years | 1 month |
| At least 5 years | 2 months |
| At least 10 years | 3 months |
| At least 15 years | 4 months |
| At least 20 years | 5 months |
| At least 25 years | 6 months |
Final pay, including any payment for unused annual leave, and the employment certificates must be issued by the fifth working day after employment ends.
The Labour Code lists 11 public holidays that fall on weekdays or Saturdays, plus Easter Sunday and Whit Sunday. The government may also move working days around holidays to create long weekends.
Monthly-paid employees receive their normal salary for public holidays that fall on working days. Work on a public holiday is only allowed in certain sectors and attracts a 100% premium.
Leave groups give each office its own holiday calendar, so bridge days and swapped working Saturdays can be set up once and every employee gets the right days off automatically. Holiday calendars →
Employment contracts must be in writing and must at least state the base wage and the job. Other key terms must be given to the employee in writing shortly after they start.
A probation period of up to 3 months can be agreed, extendable to 6 months by collective agreement. Fixed-term contracts, including renewals, can last up to 5 years.
Send contracts for e-signing, store them on the employee’s record, and track onboarding steps such as NAV registration and the medical check with task lists so nothing is missed. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Hungary, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Hungary? Talk to us.
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