With a population of more than 9 million people, Hungary offers a wide range of opportunities for companies looking to expand. The main industries are mining, energy production, and mechanical engineering. Hungary offers several types of company formations depending on your business needs, which must be registered with the National Tax Authorities, Social Insurance Institute, and the Court of Firms before beginning operations.
Employers are required to pay several taxes in Hungary as part of the payroll process, including payroll, social contribution, and vocation tax, in addition to healthcare, pension, unemployment, and other statutory benefits for employees.
Here are some additional labor and payroll considerations in Hungary:
- Employment contracts must be in writing
- Collective bargaining agreements are usually company-driven, but some CBAs can be based on the industry
- Minimum wage is HUF 167,400 per month, or HUF 219,000 for professional workers (USD $585 – $766)
- Employers withhold income tax and social security from employee pay
- New employees must have a Social Contribution Number and tax number when they register with the tax authority before beginning work
- Pay stubs must be provided to employees monthly
- If an employee is terminated, a T1041 form must be submitted to the National Tax and Customs Administration
- An employer must advertise a job locally before hiring a foreign worker
- Foreign workers from countries outside the EU/EEA need a work permit
Payroll funding options are flexible in Hungary. If you do not have a bank account in Hungary, you can utilize Blue Marble money movement services to fund payroll in USD and settle in the local currency, or you can fund payroll with the in-country provider who will make employee payroll and statutory payments. If you have a local in-country bank account you can utilize the in-country provider or pay employees directly.
If you are just getting started in Hungary, or would like to simplify payroll operations, we can help. Our cloud-based payroll platform with customized monthly reporting gives you real-time access to your payroll across all countries and currencies. We provide a US service team and direct access to in-country experts to help when questions come up. Easily manage payroll in Hungary and ensure compliance with Blue Marble. Click here to get started