An employer of record in Hungary is a local entity that employs a worker on your behalf under Act I of 2012, the Hungarian Labour Code, runs forint payroll, withholds the employee's taxes and contributions and pays the employer's social contribution tax on top. The buyer directs the day-to-day work; the EOR carries the legal employer obligations, including a notice regime that starts at thirty days and grows with tenure. Hungary is a frequent EOR market for engineering and shared-services hires made without a Budapest entity.
What an EOR does in Hungary
The EOR issues a Labour Code-compliant employment contract, registers the employment, runs monthly payroll with the employee's personal income tax and 18.5% social security contribution withheld at source, remits its own employer social contribution tax and administers leave, sick pay and termination. Hungarian termination law rewards preparation: notice periods are suspended during protected absences such as illness and childcare leave, so an exit planned without checking the employee's current status can stall. A competent EOR tracks these protected periods as part of the service, which is a real part of what the monthly fee pays for.
Notice periods under the Labour Code
The base notice period is thirty days, beginning at the earliest on the day after the dismissal is communicated. When the employer terminates, the period extends with service: five extra days after three years, fifteen after five, twenty after eight, twenty-five after ten, thirty after fifteen, forty after eighteen and sixty extra days after twenty years, taking the maximum to ninety days. The parties may agree to extend notice up to six months, and collective agreements can set longer periods where they favour the worker. Budget an exit at the employee's actual tenure band, not at the thirty-day base, because for long-serving staff the difference is a full quarter of salary.
What a Hungarian payslip costs the employer
The employer's social contribution tax, the szocho, is 13% of gross salary in 2026, and it is the main employer on-cost above the wage itself. On the employee side, an 18.5% social security contribution is withheld from gross pay, with reductions available against unused family allowances. The statutory monthly minimum wage in 2026 is HUF 322,800, which sets the floor for full-time employment and for several contribution calculations. When comparing EOR quotes for Hungary, confirm the 13% employer tax is a separate line on top of gross salary; a bundled single rate makes it impossible to check what the provider is actually charging as fee.
Entity or EOR in Hungary
A Hungarian kft is not expensive to run, but registration, bank account, payroll and Hungarian-language filings take months a first hire cannot wait, and dismissal law rewards local expertise from day one. The EOR fits while the team is small or the market is being tested; it stops fitting when headcount grows to the point where fees exceed the cost of an accountant and payroll bureau for your own entity, or when a customer or regulator requires local contracting from the operating company. Whichever route you take, the Labour Code applies identically; the choice is about who carries it. Nothing on this page is legal or tax advice.
Questions people ask about employer of record hungary
What is the notice period in Hungary?
Thirty days at base. On employer termination it extends with tenure, by five days after three years of service up to sixty extra days after twenty years, for a maximum of ninety days. The parties may agree up to six months.
What does an employer pay on top of gross salary in Hungary?
The social contribution tax of 13% of gross salary in 2026. The employee's 18.5% social security contribution and personal income tax are withheld from gross pay, not added on top.
What is Hungary's minimum wage in 2026?
HUF 322,800 per month for full-time employment, and several contribution calculations key off this figure.
Can notice run while an employee is on sick leave in Hungary?
Protected absences such as illness and childcare leave suspend the start of the notice period, so an exit has to be planned around the employee's current status.