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Hungary is an ideal choice for businesses looking to expand due to its geographic location in the centre of Europe and its tax system. The corporate tax rate is 9%, which is the lowest among the member states of the European Union. Hungary is also a strategically important transport and logistics hub that bridges Eastern and Western Europe with a developed system of transport and communications.
The country has a talented and highly educated workforce. The labor costs, significantly lower than Western European standards, have made Hungary home to several major automotive, IT, and electronics companies.
Although the business environment is favorable, there are a number of challenges to doing business in Hungary. The legal and regulatory framework of the country is intricate, with continuous changes to labor laws, and there can be bureaucratic delays. The cultural and language barriers could make the management of local business entities more challenging for foreign employers.
A relatively simple and inexpensive solution is to work with an Employer of Record (EOR). An EOR allows a company to hire employees in Hungary without having to establish a separate legal entity. The EOR will handle compliance, payroll, contracts, and all other administrative processes on the company’s behalf, with the full support of the local employment team, ensuring that the company remains compliant with local legislation.
Employer of Record (EOR) in Hungary is a locally registered company that legally hires and employs workers for foreign businesses. An EOR enables foreign companies to hire, onboard, pay, and manage staff in Hungary. They enter into a legal employer-employee relationship in Hungary with full HR compliance, while the foreign company manages the employee’s day-to-day tasks and performance.
It is also necessary to distinguish between an EOR and a Professional Employer Organization (PEO). An EOR is the legal employer of companies without local presence; on the other hand, a PEO can operate only in a co-employment model. In this case, a client company is required to have an already registered entity in Hungary. Thus, for companies entering the Hungarian market for the first time, only the EOR model remains a practical and compliant solution.
EORs ensure full local compliance with the Hungarian Labour Code (Act I of 2012). Most EORs in Hungary work through a legally registered entity with a temporary agency license, reflecting the highly regulated nature of this employment solution. This safeguards foreign companies from potential legal or financial risk.
In Hungary, a Hungarian EOR typically handles the whole employment lifecycle, from drafting employment contracts in Hungarian and English to executing monthly payroll in Hungarian Forint (HUF), and making all statutory deductions (15% personal income tax, 18.5% employee social security contribution, and 13% employer social contribution tax). EORs also take care of all statutory benefits and local compliant termination management.
Hungarian employment law is primarily based on Act I of 2012 (the Labor Code), which sets out a detailed set of rules for the employment relationship. The system is designed to be both flexible for employers and protective of employees; however, many of the rules are mandatory in nature and cannot be contracted around.
The employment relationship in Hungary must be established by a written employment contract, which is signed on or before the first day of work. The contract should be in the Hungarian language. A bilingual version may be agreed upon if required for clarity, but in any event, the Hungarian language version is always the one that counts legally.
By law, the employment contract must include the following essential elements:
Employment contracts are of indefinite term unless otherwise agreed. Fixed-term contracts are allowed but are subject to a total term (including any renewals) of no more than five years and must be specifically justified. Probation may be stipulated in the contract, but the period of probation may not exceed three months and must be agreed upon in the original contract.
Hungary generally requires an eight-hour workday, five-day work week which sums up to a 40 hour work week. An employee must have at least a 20-minute break if the working day is longer than 6 hours and at least 11 hours rest between two working days.
Overtime working is strictly controlled. The general annual limit is 250 hours. An amendment of 2019 (controversial at the time, because it increases the maximum level of allowable overtime) permits up to 400 hours in a year if there is a collective bargaining agreement (tariff agreement) or a specific individual written agreement with the employee.
Overtime is paid at the rate of 150% of the employee’s pay for the normal working hours if these are worked during the weekdays. 200% of the pay for the normal working hours, or 100% plus an alternative rest day, if these are worked during the weekend or a public holiday.
Hungarian employees are entitled to at least 20 working days of paid annual leave. This amount of leave increases with the age of the employee. It is raised by one day per year, starting with the year the employee turns 25 years old, to a maximum of 30 days per year for employees age 45 and over.
Parents with children under 16 are also entitled to additional paid leave. Employees with children are entitled to additional days of paid leave based on the number of children as follows:
Hungarian law also provides employees with 15 days of sick leave per calendar year. The employer is liable to pay 70% of the absence pay during this time. The absence due to sickness must be confirmed by a medical certificate provided by a doctor.
If an illness lasts more than 15 days, the employee can take a further period of leave for a year. He/She will then be compensated by the state social security system at a reduced rate (50% to 60% of salary). The payment is divided between the employer and the state.
Hungary has several national and religious public holidays, on which working people have a paid day off. As of 2025, the following dates are official public holidays:
Female employees can take 24 weeks of maternity leave starting 4 weeks before the expected date of delivery. This benefit is called Pregnancy and Confinement Benefit (CSED) and is state-funded at 100% of the employees’ average daily wage.
After the 24-week maternity leave period, either parent can take unpaid childcare leave until the child is 3 years old. The employee remains on the job during this time and can apply for other state-funded allowances (such as Child Care Fee (GYED) or Child Home Care Allowance (GYES)), for example.
Dad can take 10 working days of paternity leave after the birth of his child (within 2 months of birth). Paternity leave is paid leave.
Termination of an employment contract is governed by statutory regulations, with the employer required to serve written notice of termination, with a valid, substantial, and specific reason for the termination. A valid reason for termination may be connected with the conduct or ability of the employee, or with operational reasons, such as restructuring or redundancy, on the part of the employer.
The statutory notice period is 30 days, which is extended depending on the seniority of the employee with the company, where the employer is the party terminating the agreement.
Severance pay is required for any employee with a tenure of at least three years that are terminated for operational reasons. Severance pay is also scaled by tenure, from one month’s salary for three years of service all the way up to six months’ salary for 25 or more years of service.
Employers in Hungary have a wide range of legal responsibilities. The social contribution tax (employer’s contribution) is 13% of gross wages. Since January 1, 2022, the separate vocational training contribution of 1.5% has been abolished and is now included in the 13% social contribution tax. These contributions are paid to fund the healthcare system in Hungary, pensions, and labor market insurance.
Employees are subject to a flat 15% personal income tax withholding. The employer is responsible for withholding and paying these amounts to the National Tax and Customs Administration (NAV) every month, along with the employer’s social contribution tax.
Employers in Hungary are responsible for following workplace health & safety regulations, including risk assessments, safety training, protective equipment, and provision of occupational health services as per Hungarian labor law and other legislation.
Partnering with an Employer of Record (EOR) in Hungary provides foreign companies with a strategic advantage by streamlining their expansion into a market that is both full of opportunity and regulatory complexity. The EOR solution is a quick, compliant, and budget-friendly alternative to establishing a local entity.
Market Entry Speed is one of the many key benefits: Setting up a Hungarian entity like Kft. takes several months and a lot of paperwork. An EOR skips all that and allows companies to hire and onboard employees in days, which is crucial when it comes to new opportunities.
The EOR handles compliance with Hungarian labor laws, meaning all legal formalities are processed by them from contract to termination in line with the Hungarian Labour Code. This relieves companies of the burden and risk of non-compliance, which can lead to fines or legal challenges.
Employing contractors can also involve risks of misclassification. If a contractor is deemed to be an employee in the eyes of the law, this can result in back taxes and penalties for the company. An EOR provides a clear and legal employment relationship, avoiding this risk.
Finally, the EOR solution can provide flexibility and scalability for businesses testing the Hungarian market or needing to adjust team size rapidly without additional administrative hassle.
Remote People is a company that provides HR outsourcing, recruitment, EOR, contractor management, and payroll outsourcing. One of their greatest strengths is the local presence and knowledge of the market, language, and business culture.
Remote People’s approach is finding and hiring the best talent in the shortest time. They offer EOR in Hungary as an easy way to try the market or hire remote employees, without the hassle of setting up an entity.
| Pros | Cons |
|---|---|
| Very affordable, starting at $199 per employee per month | It’s not specified whether they operate their own local entity in Hungary or through third-party partners, which is a consideration for some clients in terms of risk |
| They also offer recruitment services that will help their clients find talent in Hungary, not just employ them | |
| Focuses on local expertise, which can be valuable for navigating cultural and market-specific nuances |
Deel is a global EOR provider with a strong, technology-driven platform and a proven track record. The company stands out for having direct ownership of its Hungarian entity. This allows them to operate without third-party partners in Hungary, and is an added level of security and accountability for clients.
Deel’s platform was built to automate and optimize every step of the hiring, onboarding, and payroll process for an end-to-end, seamless experience.
| Pros | Cons |
|---|---|
| Owns a legal entity in Hungary, removing third-party risks and ensuring direct oversight of compliance matters | Pricing is premium relative to other affordable competitors |
| Highly-rated platform (G2 and Trustpilot) that automates tax documents, payroll, and benefits | Some additional services, like visa sponsorship, may be subject to additional costs on top of management fees |
| Transparent, line-item quotes and flat monthly management fees with no hidden fees | |
| Extensive global coverage with the ability to hire in over 150 countries from one dashboard |
Skuad offers EOR in Hungary with a focus on providing access to the local talent pool without the need for a separate legal entity. The platform can manage all the aspects of end-to-end human resources, making sure it aligns with the local legislation and laws.
The EOR solution by Skuad takes care of global hiring and aims to make it less complex by managing the process of onboarding and payroll, along with mandatory documentation.
| Pros | Cons |
|---|---|
| Affordable pricing is suitable for startups and small or medium-sized businesses | Uses a partner network, which may be less suitable for businesses that prefer direct employment |
| Manages both full-time staff and contractors in one place, and works in over 160 countries | |
| Simple, self-service onboarding with employee experience at its core |
Oyster HR is a global employment platform offering EOR, contractor management, and global payroll services in over 180 countries, including Hungary. Oyster’s platform helps companies hire, pay, and manage talent compliantly and ethically without local presence. Oyster’s value proposition is that they see themselves as a global expansion partner. They offer their clients access to their local knowledge and expert support when it comes to navigating complex labor laws.
| Pros | Cons |
|---|---|
| Provides an end-to-end, all-in-one platform to effectively manage a distributed global team | The EOR service fee is high, and won’t fit all budgets |
| Provides compliant employment agreements that are legally reviewed and automates compliance within its network | |
| Transparent pricing for its EOR, contractor, and payroll services | |
| Has a strong focus on fair, ethical employment and providing competitive, localized benefits packages |
Multiplier‘s EOR services support businesses to hire employees in 150+ countries, including Hungary, without establishing a local entity, covering end-to-end aspects of the employee lifecycle from onboarding, payroll, benefits, to compliance.
Multiplier positions itself as an all-in-one platform to support companies in testing new markets, attracting international talent, and ensuring full compliance with local employment regulations.
| Pros | Cons |
|---|---|
| Simplifies global workforce management, including payroll, benefits, and insurance | Mid-to-high range pricing relative to some more cost-conscious providers |
| Delivers expert assistance with Hungary’s work permit and visa regulations | |
| Creates compliant employment contracts and facilitates complex termination procedures for companies |
Globalization Partners (G-P) is a global leader in the EOR industry. Its global entity network enables clients to hire talent in over 180 countries in days.
G-P distinguishes itself through its large team of in-house HR and legal professionals who provide dedicated support for each hire, including payroll, benefits, and ensuring local compliance with Hungarian labor law.
| Pros | Cons |
|---|---|
| G-P operates through its own global entity infrastructure | Pricing is typically premium, customized, and will need to be quoted |
| Large in-house HR and legal team | The platform is not easily customizable for specific HR use cases, per user feedback |
| A straightforward platform that automates global compliance and payroll | |
| Integrates with a broad range of HR/payroll software, including ADP, Workday, and BambooHR |
RemoFirst markets itself as an easy and cost-effective EOR solution and places particular focus on its transparent and all-inclusive, flat-rate pricing structure. The company serves over 185 countries, including Hungary, through a network of long-term local partners to maintain compliance and low pricing. It handles all aspects of the employment lifecycle, including onboarding, payroll, benefits, and even provides visa support.
| Pros | Cons |
|---|---|
| One of the lowest starting rates available on the market, with no hidden fees or minimum contract terms | As a budget-first option, it lacks the extensive list of enterprise-level integrations of its premium-priced competitors |
| Full suite of services including visa support, healthcare plans, and equipment delivery |
The cost of employing via an EOR in Hungary is composed of two components: the cost of the EOR’s service and the legally mandated employer contributions.
The fees EORs charge for their services are typically a fixed amount per month per employee for unlimited administrative and compliance services. Percentage-based pricing models exist, but are less common. Global EOR pricing falls within the range of $500 to $700 per employee per month. Some budget options, like Remote People and RemoFirst, can be found as low as $199 to $299.
In Hungary, employers are responsible for paying a Social Contribution Tax of 13% of gross salary, which goes towards pensions, healthcare, and unemployment benefits. The prior 1.5% employer contribution to vocational training has been absorbed into this amount.
The most popular form of entry into the Hungarian market is to establish a Limited Liability Company (Kft.) or Private Company Limited by Shares (Zrt.). This option allows full operational control and shows a long-term commitment, but requires high start-up costs and takes a long time.
The company has to hire a local lawyer and open a company bank account. The Zrt. also requires a minimum of HUF 5,000,000 share capital and incurs accounting and tax filing obligations going forward.
Hiring contractors allows for greater flexibility in the workplace and saves on social contributions. However, there is a high risk of misclassification. If a contractor is working like an employee (direct instructions, specific working hours, using equipment provided by the company), the authorities will re-classify this person as an employee. This could cause fines and back payments.
Staffing agencies provide workers for short-term and temporary work. These companies take on all employment and payroll responsibilities. In contrast to an EOR, a staffing agency will recruit its own workers, and not the hiring company’s candidates. An EOR will hire and onboard your own candidates for compliant, longer-term employment in Hungary.
For international companies, one of the easiest ways to expand to Hungary is through an EOR. This service has been popular in recent years as it is less expensive than setting up your own local entity while still providing you with full legal security.
An EOR manages all of your payroll, compliance, contracts, and taxes in accordance with Hungarian labor law. The EOR model also provides you with greater speed, flexibility, and scalability, as you can start hiring and operating in Hungary in a matter of days instead of months.
If you are a business owner looking to expand, an EOR can be a quick and easy way to enter the market, reduce admin overhead, and avoid compliance issues. Check out the top EORs in Hungary and contact us for personalized advice to find the solution that is best for your hiring needs.
