HR Software for Hungary

Leave Policy

Maternity Leave

Pregnant employees who have worked 365 calendar days in the last two years are entitled to 24 weeks of paid leave. Four weeks of this must be taken before the birth of the child.

The employee usually receives 100% of the average monthly salary for the two-year period before the birth, and the tax authorities are responsible for this remuneration.

The employee cannot extend the vacation.

You can use the leave module in IceHrm to manage maternity leave in Hungary

Paternity Leave

Employees who have worked 365 days in the last 2 years are entitled to 5 days of paid vacation. The employee is paid PTO by the employer. The employer can request a refund from the national tax authority.

The employee cannot extend the vacation.

Parental Leave

There are no legal regulations for parental leave in Hungary. However, employees may be entitled to maternity and paternity leave.

Sick Leave

Employees are entitled to paid sick leave of up to 15 days per year (prorated if hired during the year). Depending on the duration, this vacation is paid at different rates and by different payers:

While the tax authorities pay sick leave after 15 days, the employer must reimburse the tax authorities 30% of the salary for this sick leave. If the sick leave is due to a high-risk pregnancy, an accident at work or an illness (including COVID 19), the state treasury pays from the first day of the leave.

Pay & Tax

Minimum Wage Requirements

The minimum wage is HUF 200,000 per month.

Individual Income Tax

The individual income tax in Hungary is 15%. Income tax is calculated at a flat rate.

Payroll Cost

The cost to the employer is generally estimated at 13.0% of the employee’s salary*.

  • Social Security – 13.0%
  • Additional costs for the employer – 15,700 HUF

One-off costs
Pre-employment medical examination – HUF 17,800

Additional costs
Local council tax
Hungarian municipalities can impose a local business tax on companies, which can be levied up to a maximum rate of 2%. 0.3% innovation tax may also be levied. These taxes are usually levied on the company’s turnover, including salaries and other employment costs of EORs based in Hungary. Council tax is billed twice a year, in March and September.

Overtime Pay & Maximum Hours

The standard working hours are 8 hours per day and 40 hours per week. Standard working hours are Monday to Friday.

Pay for overtime is mandatory. Hours outside of standard working hours are considered overtime. Employees can work a maximum of 4 hours of overtime per day and 8 hours of overtime per week.

For this overtime, employees receive an additional wage supplement of 50% on weekdays and 100% on public holidays and weekends.

For public holidays and weekends, employees receive a wage supplement of 50% if they are compensated with a weekly rest day.

Termination

Termination Requirements

Complex rules and the regulations of the country in which an employee is employed must be observed in the event of dismissals. Off-boarding is always carried out by the employer with the main parties involved. It may include ad hoc charges as well as required or recommended steps for specific termination cases.

Dismissals in Hungary can be complex. Outside of the probationary period, employers in Hungary cannot terminate at their own discretion and the termination must be for a valid reason.

Compliant terminations include:

  • Voluntarily by the employee
  • By mutual agreement
  • Unilaterally by the employer based on:
    • Probation period
    • Objective grounds
    • Disciplinary dismissal
    • Performance due to unsuitability for the job

Notice Period

The minimum notice period is 30 days and increases depending on the length of the employment relationship:

  • Up to 2 years of employment – 30 days notice period
  • 3 years of employment – 35 days notice period
  • 5 years of service – 50 days notice period
  • 10 years of service – 55 days notice period
  • 15 years of service – 60 days notice period
  • 18 years of service – 70 days notice period
  • 20 years of service – 90 days notice period

The notice period can be extended by up to 6 months by mutual agreement of both parties.

Severance for Employees

In Hungary, the amount of severance pay depends on the length of the employment relationship:

  • 3 years of employment – 1 month’s salary
  • 5 years of service – 2 months’ salary
  • 10 years of service – 3 months’ salary
  • 15 years of service – 4 monthly salaries
  • 20 years of service – 5 months’ salary
  • 25 years of service – 6 months’ salary

If the employment relationship is terminated by the employer if there are less than 5 years remaining until retirement, the severance payment is higher:

  • 3 years of employment – 2 months’ salary
  • 5 years of service – 3 months’ salary
  • 10 years of service – 5 months’ salary
  • 15 years of service – 6 months’ salary
  • 20 years of service – 8 monthly salaries
  • 25 years of service – 9 monthly salaries

In order to protect you from unforeseen financial risks arising from the termination of an employment relationship, IceHrm applies a severance pay provision in all employment contracts in this country. IceHrm has extensive expertise in managing litigation around the world and our settlement provision is based on prevailing common law or statutory claims and best local practices. If your employee resigns or is not entitled to severance pay, you will receive a refund of any unused amounts.

Statutory Time Off

Paid Time Off

Both full-time and part-time employees are entitled to at least 20 days of paid time off per year. The PTO entitlement increases depending on the employee’s age:

PTO eligibility is earned for each day of employment and is prorated based on the annual PTO entitlement.

Public Holidays

There are around 11 public holidays celebrated in Hungary. National holidays include:

  • New Year’s Day
  • Memorial Day
  • Easter Friday
  • Easter Monday
  • Labor Day
  • Pentecost Monday
  • State Foundation Day
  • Revolution Memorial Day
  • All Saints’ Day
  • Christmas Day
  • 2nd Day of Christmas

Onboarding

Onboarding

Onboarding takes 3 business days after the client signs the SOW.

Additional Info

Employment Contract Details

The contracts must be drawn up in Hungarian and can be bilingual. They must be in writing and signed by both parties.

The contract must contain:

  • Employer data
  • Employee data
  • Base salary
  • Job position
  • Length of the employment contract (if this is not there then it will be unlimited)
  • Place of employment
  • Probation period

Probation Period

Probationary periods are not mandatory. There is no minimum probation period. The maximum duration of the probationary period is 90 days (3 months).

There is no notice period during the probationary period.