Employer of Record Guide in 

Hungary

Vacation Leave

Hungarian employees are entitled to generous annual leave:

Additional leave:

• Extra days may be granted for hazardous work conditions
• University degree holders receive additional 5 days
• Leave must be taken within 15 months of earning it

Sick Leave

• Duration: Up to 1 year for the same illness
• Payment:
  • First 15 days: 70% of average earnings (paid by employer)
  • After 15 days: 60% of average earnings (paid by social security)
• Medical certification: Required from day 1 of absence

Maternity Leave

• Duration: 24 weeks total
  • 4 weeks before expected birth (mandatory)
  • 20 weeks after birth
• Payment: 70% of average daily earnings (paid by social security)
• Job protection: Position must be held open during leave

Parental Leave

• Childcare allowance (GYES): Until child reaches 3 years
  • Payment: Minimum wage amount monthly
  • Available to either parent
• Childcare benefit (GYED): Up to 2 years
  • Payment: 70% of previous earnings (capped)
  • Higher benefit level than GYES

Other Leave Types

• Paternity leave: 5 days (paid by employer)
• Bereavement leave: 2-5 days depending on relationship
• Study leave: For educational purposes (unpaid unless specified in contract)
• Emergency leave: For urgent family matters (typically unpaid)

Summary

Termination Types

Termination by Employer:

• With notice: Standard termination requiring notice period
• Without notice: Only for serious misconduct or breach of contract
• Mutual agreement: Both parties agree to end employment

Termination by Employee:

• Resignation: Employee gives required notice
• Immediate termination: Only in cases of employer breach

Notice Period Requirements

Notice periods depend on employment duration and who initiates termination:

Severance Pay

Severance is required for certain terminations:

• Redundancy: 1-6 months' salary depending on length of service and age
• Employer termination without cause: May be required based on circumstances
• Calculation: Based on average earnings over previous 12 months

Probationary Periods

• Maximum duration: 90 days (3 months)
• Notice during probation: 3 days' notice required from either party
• Extension: Not permitted beyond initial 90 days

Final Pay Requirements

• Timeline: Final payment due on last working day
• Components:
  • Outstanding salary
  • Unused vacation pay
  • Any earned bonuses or allowances
• Deductions: Only legally permitted deductions allowed

Protected Employees

Certain employees have enhanced protection against termination:

• Pregnant employees: Cannot be terminated except for serious misconduct
• Employees on sick leave: Limited termination rights
• Union representatives: Special protection procedures apply
• Employees over 55: Enhanced severance requirements

National Public Holidays

Hungary observes the following national public holidays:

Holiday Pay Rules

• Eligibility: All employees entitled to holiday pay
• Payment: Regular daily wage for each public holiday
• Working on holidays: 150% premium pay plus substitute day off
• Falling on weekends: Substitute weekday designated as public holiday

Religious Observances

• Christian holidays: Widely observed (Easter, Christmas)
• Other religions: Employees may request time off for religious observances
• Accommodation: Employers should reasonably accommodate religious practices

Required Documents for Employment

Employment Contract Requirements:

• Job title and description
• Place of work
• Salary and benefits
• Working hours
• Notice periods
• Probationary period (if applicable)

Employee Documentation:

• Identity documents: Hungarian ID card or passport
• Tax number: Required for payroll processing
• Social security number: For benefit contributions
• Bank account details: For salary payments
• Educational certificates: If relevant to position

Language Requirements

• Official language: Hungarian
• Contract language: Must be in Hungarian (translations acceptable for foreign employees)
• Workplace communication: Hungarian typically required unless specified otherwise
• Documentation: All official employment documents must be available in Hungarian

Background Checks & References

• Permitted checks: Criminal background, employment history, educational verification
• Employee consent: Required for all background checks
• Data protection: Must comply with GDPR and Hungarian data protection laws
• Relevance: Checks must be relevant to job requirements

Data Protection & Privacy

• GDPR compliance: Mandatory for all employee data processing
• Consent requirements: Explicit consent needed for data collection and processing
• Data retention: Specific limits on how long employee data can be stored
• Employee rights: Right to access, correct, and delete personal data

Work Permits & Visas

EU/EEA Citizens:

• No work permit required
• Right to work immediately upon arrival

Non-EU Citizens:

• Work permit required before starting employment
• Residence permit may also be necessary
• Employer typically assists with application process

Onboarding Timeline

Worker Classification: Employee vs. Contractor

Hungarian law strictly distinguishes between employees and independent contractors:

Employees:

• Work under employer direction and control
• Entitled to all labour law protections
• Employer pays social security contributions
• Regular salary and benefits

Independent Contractors:

• Work independently with minimal supervision
• Invoice for services provided
• Responsible for own taxes and social security
• No employment law protections

Misclassification risks: Significant penalties and back-payment of contributions if contractors are deemed to be employees.

Collective Bargaining & Unions

• Union membership: Approximately 10-15% of workforce
• Collective agreements: May apply at company or sector level
• Works councils: Required in companies with 50+ employees
• Consultation rights: Unions have rights to information and consultation on major decisions

Cultural Norms & Workplace Expectations

Communication Style:

• Formal business relationships initially
• Direct but polite communication
• Hierarchy respected in traditional companies

Work-Life Balance:

• Standard business hours: 8:00 AM - 5:00 PM
• Lunch breaks: Typically 30-60 minutes
• Punctuality highly valued

Professional Development:

• Continuing education encouraged
• Language skills (especially English and German) valued
• Technical certifications important in many sectors

Anti-Discrimination Laws

Hungarian law prohibits discrimination based on:

• Gender, age, race, nationality
• Religion or belief
• Disability
• Sexual orientation
• Political opinion
• Trade union membership

Equal pay: Required for equal work regardless of gender or other protected characteristics.

Remote Work Considerations

Legal Framework:

• Remote work (telework) regulated under Labour Code
• Written agreement required specifying remote work conditions
• Employer must provide necessary equipment or compensation

Tax Implications:

• Home office expenses may be tax-deductible
• Cross-border remote work requires careful tax planning

Health and Safety:

• Employer responsible for ensuring safe remote work environment
• Regular health and safety assessments may be required

What Borderless AI Handles:

• Employment contract preparation and compliance
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