Looking for an Employer of Record in Hungary? Here’s what you need to know

Hiring employees in Hungary can be great for business, but it comes with complexity. Many international businesses typically explore using an Employer of Record when expanding internationally. However, traditional EOR services may not be applicable in Hungary. 

That said, global companies still have options. Companies may use a workforce management platform like Payoneer Workforce Management to onboard, manage, and pay employees in Hungary, while getting support to meet local compliance requirements.

If you’d like to learn how Payoneer Workforce Management can support your global expansion strategy, get in touch today. Or, keep reading to learn more about Hungary payroll, onboarding, and more.

How to hire employees in Hungary

There are three main ways to engage talent in Hungary.

1. Set up a local legal entity

Registering an entity allows you to hire and pay employees in Hungary directly. However, this approach requires significant time, cost, and ongoing administrative effort, including local accounting, tax filings, and compliance management.

2. Hire independent contractors or freelancers

Companies may engage Hungarian contractors, but strict rules apply. Misclassifying employees as contractors can lead to fines, back payments, and reputational risk.

Using Payoneer Workforce Management assists with mitigating risks related to contractor misclassification.

3. Partner with a workforce management platform

While a traditional Employer of Record in Hungary may not be permitted, a workforce management platform offers a streamlined solution. Payoneer Workforce Management helps companies manage employment contracts, payroll, benefits, and supports compliance processes globally.

Payoneer Workforce Management also helps you set up localized benefits as per local laws and requirements. 

How to onboard employees in Hungary

Onboarding local talent in Hungary involves multiple administrative and compliance steps, which can take time to process through local systems. 

The onboarding process typically involves:

• Payroll and mandatory benefits setup: Enroll local employees into the local payroll system and complete the registration for all statutory benefits required under local employment regulations.
• Provisioning and configuration of work equipment: Equip new team members with the necessary hardware and tools, ensuring all devices are properly set up so they can begin their tasks without delay.
• First‑week orientation program: Arrange an orientation during the employee’s initial week to walk them through company policies, onboarding procedures, and key expectations for their role.
• Team and organization-wide introductions: Coordinate introductory meetings to help the local candidate connect with their immediate team and build relationships with colleagues across different departments.

Payoneer Workforce Management enables companies to compliantly engage talent across borders through its technology platform.

Pay employees in Hungary

Managing Hungary payroll requires adherence to strict timelines and statutory rules.

Some key information that employers must be across: 

• Payout currency: Hungarian Forint (HUF)
• Pay date: By the 10th of the following month
• Minimum wage: HUF 290,800 per month
• Qualified minimum wage: HUF 348,800 per month
• Annual bonus: Not mandatory, but may be paid as per the employer’s policy
• Taxes: 15% personal income tax on all taxable income

Employees are also covered by mandatory social contributions, including:

• Public Health Insurance: Overseen by the National Health Insurance Fund (NEAK), it covers employees and insured children in education.
• Social Security (Társadalombiztosítás – Tbj): It covers healthcare, pensions, family support, unemployment, and other benefits.

Payoneer Workforce Management’s unified, all-in-one platform gives you a single dashboard to manage a global workforce, and lets you pay contractors in just a few clicks.

Employment laws in Hungary

Hungarian labor law defines clear employee protections. 

This includes a 40-hour working week, with up to 250 hours of overtime per year, paid at 50% above gross salary (though an additional 150 hours are allowed with a written agreement). Probation can last a maximum of 3 months and cannot be extended.

To stay compliant with local labor laws, use Payoneer Workforce Management’s infrastructure.

Minimum wage in Hungary

The minimum wage in Hungary is set nationally and updated periodically. 

The minimum wage is HUF 290,800 per month (or HUF 1,672 per hour). 

The qualified minimum wage is HUF 348,800 per month (or HUF 2,005 per hour).

Employers must ensure wages meet or exceed these thresholds to remain compliant.

Employment contracts in Hungary

Employment contracts in Hungary must be in writing and typically include:

• Job title and description
• Salary and payment terms
• Working hours and location
• Contract duration (fixed or indefinite)
• Termination and notice conditions

Payoneer Workforce Management allows you to onboard talent quickly and securely with localized contracts and payroll.

Leave policy in Hungary

Hungary sets minimum levels of leave that employers must give their employees, including vacation time, public holidays, sick leave, and more.

Vacation leave and public holidays

Employees start with 20 days of vacation leave, and then it increases based on the employee’s age. 

Parental leave

Mothers must take at least 2 weeks of maternity leave, though they can take as much as 24 weeks starting up to 4 weeks before birth. Fathers are entitled to 10 days of paternity leave. Parents can also take 44 working days of childcare leave until the child turns 3.

Other leave

Employees in Hungary are also entitled to sick leave (15 days per year) and compassionate leave (2 days per year).

Work permit in Hungary

Work permit requirements vary based on nationality and differ based on the employee’s country of origin.

Employers and employees should consult official Hungarian government resources for more information.

Background checks in Hungary

As in many other countries, employers may conduct background checks before engaging local talent. 

This can include things like: 

• Address verification
• Criminal records
• Employment history
• Education verification
• Social media review

Employee consent is typically required, and employers must disclose what checks will be performed.

Employment termination in Hungary

In Hungary, certain scenarios are deemed valid grounds to terminate an employment contract. 

This includes:

• Employee resignation
• Mutual agreement between the employer and employee
• Termination during probationary period
• Employer termination due to misconduct, performance, or absence

Notice periods

The notice periods required to be given before termination extend based on employment duration. No notice period needs to be given if the employee is still under probation.

Severance pay

Severance is mandatory after 3 years of service and ranges from 1 to 6 months’ salary, depending on tenure and employee age.

Company registration in Hungary

Registering a company in Hungary allows direct hiring but involves regulatory complexity. For employers wishing to follow this path, details on how to do this can be found on the government website.

For many companies, however, a workforce management platform offers a faster and more flexible alternative for engaging and retaining local talent. 

Payoneer Workforce Management enables compliant onboarding and engagement of talent in 160+ countries without having to set up a legal entity.

PEO in Hungary

A PEO is designed to help you with HR and admin tasks for employees you already employ through your local entity.

While some countries allow the use of EORs, in Hungary, companies should use compliant workforce management solutions, like Payoneer Workforce Management, instead. Our platform helps manage HR and compliance processes for companies without a local entity. This is invaluable for international companies seeking Romanian talent.

Explore Payoneer Workforce Management services in Hungary

Working with a partner like Payoneer Workforce Management helps support global operations and access local talent. 

Our unified platform offers assistance with:

• Onboarding & offboarding
• Payroll and taxes
• Benefits
• Timesheets and more

Book a demo today.

FAQs

1) Are EORs legal in Hungary?

Traditional Employer of Record Hungary services may not be permitted. However, companies can use a workforce management platform as a streamlined solution to manage hiring and payroll.

Partnering with Payoneer Workforce Management allows global companies to onboard talent in 160+ countries without having to set up a legal entity, while staying compliant with local labor laws.

2) How much does it cost to hire Hungarian talent?

The estimated employer cost is 15% on an annual salary of USD 60,000. Costs vary based on salary and local factors. For more employment cost estimates, use our cost calculator tool. 

3) Why hire through a workforce management platform?

If you’d like help engaging talent in Hungary without the complexity of setting up a local entity, Payoneer Workforce Management can help.

Payoneer Workforce Management allows you to engage and pay employees across the globe in 70+ currencies. We offer a transparent pricing structure. Get in touch today for full details.