Employer of Record in Hungary: 2026 Hiring Guide

Introduction

For foreign companies, an employer of record (EOR) in Hungary is often the fastest way to navigate one of Central Europe's most Labor Code-heavy hiring environments. Hungarian law requires:

• Employment contracts drafted and signed in Hungarian (or a language fully understood by both parties)
• NAV is notified of every new hire on their first working day
• Social insurance contributions calculated and filed separately from income tax
• Every termination reported to NAV (Nemzeti Adó- és Vámhivatal - National Tax & Customs Administration Office of Hungary) within eight working days

Miss any of these and NAV can prohibit further employment, impose penalties, or flag the company for audit. Most foreign companies find this out after they've already made a hire.

An EOR in Hungary handles contracts, payroll, statutory benefits, and tax filings through an established local structure with no entity setup, notary filings, or registered capital required.

This guide covers employment contracts, payroll, statutory leave, work permits, and how to choose the right EOR partner for Hungary.

Hungary at a Glance

Population: 9.6M

Currency: Forint

Capital City: Budapest

Languages: Hungarian, Romani, Serbian, Slovene, Slovak, Croatian, and German.

GDP: USD 271.6 billion

What Are the Legal Requirements to Hire in Hungary?

To set up a local entity in Hungary, a company must be thorough with Hungary's local employment laws. Let us briefly discuss a few important ones here.

For working in Hungary, the employer and employee must enter into a written contract duly signed by both parties. The absence of a written employment contract can put the employer at high risk, as the labor inspectorate may prohibit further employment or impose a penalty. Any changes in the employment contract should be in writing. 

The employment contract should include:

• The rights, responsibilities, and duties of both the employer and the employee. 
• The salary and the designation of the employee. 
• The probation period of the employee (shouldn’t be more than three months) 

The basic terms also state that, as per the government directions, no worker can be paid less than the statutory minimum wage, and the same is reviewed by the government annually. 

In Hungary, during the probation period, employers can easily ask the employee to leave the job without giving any notice period and without stating any valid reasons.

The employer should inform the tax authority about the joining of an employee on the first working day and similarly inform about the termination of the employee within eight working days. 

All the tax obligations and information to the tax department should be taken seriously by the employer so that he avoids paying unnecessary penalties imposed by the tax department.

Employers should inform their employees in writing about:

• The working hours
• Break up the components of the salary to be given to the employee
• Leave policy, and
• Termination of the contract. 

All the necessary information about the employment should be given to the employee by the employer in a handbook that has all the terms and conditions and do’s and don’ts related to the employment.

Before the employee starts working, the employer needs to get the employee's complete medical examination done by a doctor who shall issue a medical certificate stating that the employee is medically fit to work. 

It is also the sole responsibility of the employer to provide a healthy and safe working environment to employ

Medical examination of the employee is important before the start of employment, but if the employee is working in a hazardous environment, the employer needs to get a medical checkup done for the employee after every six months.

The table below lists the main employee entitlements in Hungary:

Hungary's employment compliance framework, including social insurance filings, NAV registrations, statutory benefits, and Labour Code obligations, carries real penalty risk for foreign employers who get it wrong. 

Skuad supports all of this through local EOR infrastructure, so your team doesn't need to monitor regulatory changes or manage filings independently.

Book a demo to see how Skuad manages Hungary employment compliance end-to-end

Hiring Contractors vs Full-time Employees in Hungary

In Hungary, contractors fall under the Civil Code and employees under the Labour Code, two frameworks with fundamentally different obligations for employers. Getting the classification wrong exposes companies to back-payments, penalties, and interest from NAV. Here's what each model actually involves.

How to Hire an Employee in Hungary? 

The process is straightforward when you know the sequence. Here's what hiring in Hungary actually involves, step by step. 

1. Step 1: Find the right candidate: Identify and shortlist candidates before any salary discussion. Use local job boards and recruitment channels to source talent.
2. Step 2: Agree on salary: Once a candidate is selected, both parties agree on the gross salary. 
3. Step 3: Sign a written employment contract. Both parties sign a written contract in Hungarian covering the gross salary, job title, and first day of work.
4. Step 4: Verify employee documents. Ensure the employee has all mandatory documents, such as a tax number, a work permit, a residence permit, and a social security number. The employee can assist the employee in obtaining documents if the employee is missing them. 
5. Step 5: Register with NAV: Notify NAV of the new hire on their first working day. Failure to do so can result in penalties or the prohibition of further employment.
6. Step 6: Run payroll on time. Salary must be paid by the 10th of each calendar month for the previous month's work. Social contributions must be remitted to NAV by the 12th of each calendar month.

Each of these steps carries compliance risk for foreign employers managing the process independently, particularly NAV registration on day one and payroll contribution deadlines, where missed filings trigger immediate penalties.

Skuad manages the full hiring and onboarding workflow in Hungary from a single platform:

• Verifies employee documents, including tax numbers, work permits, and residence permits, before onboarding begins
• Runs background checks covering identity, employment history, and criminal records so you know exactly who you're hiring before contracts are signed
• Registers new hires with NAV on their first working day, with no manual filing required on your end
• Drafts and manages locally compliant employment contracts in Hungarian, aligned with the Labor Code
• Processes payroll in HUF by the statutory deadline, with social contributions remitted to NAV by the 12th of each month
• Handles the full onboarding lifecycle, from offer to first day on payroll, without requiring a local entity in Hungary

Book a demo to see how Skuad manages Hungary hiring and onboarding end-to-end

Probation and Termination in Hungary

The Labor Code of Hungary caps the probation period at three months. Probation may be extended once, by a collective agreement, to a total of six months. During probation, either party may terminate without notice and without stated cause.

Termination by giving notice

Termination by either party requires written notice. If the employer terminates an open-ended contract, the notice must state a specific, real, and reasonable ground tied to the employee's conduct, their performance, or the employer's operations.

Restrictions apply during pregnancy, maternity leave, childcare leave, and medical treatment related to human reproduction.

The statutory notice-period scale increases with the employee's tenure:

Where the employer terminates and the employee has at least three years of service, severance pay is payable per Labor Code, on the following scale:

Termination by mutual consent

Labor Code permits termination of an employment relationship by mutual written consent at any time. Both parties must sign the termination agreement, which typically records the termination date and any agreed financial terms. 

Dismissal without giving any written notice

Both employer and employee can terminate without notice if the other party's conduct is detrimental to the relationship or if substantive obligations are violated wilfully or by gross negligence. 

The right to terminate without notice is exercisable within 15 days of knowledge of the conduct, or for criminal offences, within one year. The terminating party must provide a written justification, except where the employee is still in probation.

Types of Visas in Hungary

Work Permit

Hungary is a member of the European Union and also a party to the Schengen Treaty. Foreign nationals from non-EU/EEA member companies need to have a valid work permit to work in Hungary. 

The Official Hungarian Gazette has the number of work permits that can be issued to foreign nationals, which are being given by the Minister of National Economy. All foreign nationals must have a work permit if they intend to work in Hungary.

A work permit is of utmost importance in Hungary. EU citizens do not require a work permit to work in Hungary, but the employer must inform the employment centre of the same.

Non-EU citizens must have a valid work permit. Either the employer or the employee needs to apply to the employment centre for residential accommodation, along with a work permit application to the immigration authority. The employment centre issues work permits to non-EU citizens for a maximum tenure of two years only. It can be extended thereafter.

Different types of work permits are as follows:

• Individual Work Permit
• Residence permit
• Joint work permit

Processing time of the work permit

An individual needs 90 days to obtain approval for a joint work permit which is valid for two years. This type of work permit can be extended for another two years.

Payroll & Taxation

Hungary's payroll and tax obligations sit across two separate systems, one for employers, one for employees, with distinct filing deadlines and contribution rates that changed in 2025. 

Taxes in Hungary

A flat rate of 15% is applicable to personal income tax. Tax contributions payable in Hungary are as follows:

Payable by the Employee

Tax payable by an employer

What is the tax year-end?

31st December is the tax year-end.

For foreign companies without local payroll infrastructure, a missed deadline or miscalculated contribution triggers immediate penalties.

Skuad handles Hungary payroll end-to-end from a single platform:

• Calculates and processes employee salaries in HUF, with payroll disbursed by the 10th of each month per statutory requirements
• Withholds and remits employee social security contributions (18.5%) and personal income tax (15%) accurately on every pay cycle
• Pays the employer social contribution tax (13%) to NAV by the 12th of each month, with no manual filing required
• Generates payslips, maintains payroll records, and produces documentation audit-ready for NAV inspection
• Monitors Hungarian payroll regulation changes and updates contribution calculations automatically when rates change

See how Skuad handles Hungary payroll and statutory contributions

Incorporation: How to set up a subsidiary in Hungary

Setting up a subsidiary in Hungary requires pre-registration with the Court of Registration, notary certification of founding documents, a registered capital deposit, and ongoing accounting and tax filing obligations that typically take two to three months before the entity is operational.

For companies that need to hire in Hungary without that lead time, an EOR removes the entity dependency entirely. For companies that do plan to incorporate, Skuad supports the subsidiary setup process alongside the employment infrastructure:

• Manages incorporation paperwork and documentation filing aligned with Hungarian registration deadlines
• Handles statutory compliance obligations once the entity is live, including NAV registrations, payroll setup, and employment contracts
• Bridges the gap between incorporation and first hire so your team can start operating compliantly without waiting for entity setup to complete
• Supports parallel hiring through EOR while the subsidiary is being established, avoiding the compliance gap most companies face during the incorporation window

Book a demo to see how Skuad supports Hungary entity setup and compliant hiring from day one

PEO

A Professional Employer Organization (PEO) leases employees to an employer. It handles multiple employee-related liabilities where organizations can outsource their HR functions, including payroll, compensation, benefits, taxes, and payroll administration.

Comparing a profesPEO

A Professional Employer Organization (PEO) leases employees to an employer. It handles multiple employee-related liabilities where organizations can outsource their HR functions, including payroll, compensation, benefits, taxes, and payroll administration.

Comparing a professional employer organization and an EOR

• A PEO works as a co-employer, whereas an EOR works as a full legal employer of your remote team.
• A PEO has some liabilities of the workers, whereas an EOR has complete liabilities.
• With a PEO, you need to make decisions all the time; with an EOR, all HR-related decisions and paperwork are made by the EOR, giving you more time to look after other aspects of your business.

Employer of Record in Hungary: Start Hiring Without Entity Setup 

Hungary's Labor Code governs more of the employment relationship than most foreign employers expect, from mandatory Hungarian-language contracts and NAV registration on day one, to age-based leave accruals, statutory sick pay obligations, and termination rules that require documented justification at every stage.

Skuad handles the operational complexity of hiring in Hungary, employment contracts, social insurance filings, payroll in HUF, statutory benefits, work permit support, and NAV compliance, so your team can focus on the work, not the paperwork.

Companies across SaaS, logistics, e-commerce, and technology use Skuad to enter the Hungarian market faster, stay compliant as Labour Code obligations evolve, and scale their Hungary workforce without building local HR infrastructure from scratch.

Book a demo to see how Skuad gets your first Hungary hire onboarded in weeks, not months

FAQs

1. What is an employer of record in Hungary? 

An employer of record in Hungary is a third-party organization that legally employs workers on your behalf, handling employment contracts in Hungarian, payroll, social insurance contributions, and NAV registrations under the Labor Code. 

2. How much does an employer of record in Hungary cost? 

EOR fees in Hungary typically range from €350 to €600 per employee per month. Employers must also pay a 13% social contribution tax on top of gross salary, separate from the service fee. 

3. Can a foreign company hire in Hungary without setting up a local entity? 

Yes, through an employer of record in Hungary, a foreign company can hire compliantly in Hungary without registering a subsidiary. The EOR signs contracts in Hungarian, runs local payroll, and handles NAV filings while the client retains day-to-day management of the employee.

4. What are the penalties for non-compliance with Hungarian employment law?

Penalties start at HUF 150,000 and reach up to HUF 25 million for small to medium businesses. Common violations include unregistered employment, delayed wages, and worker misclassification, all triggering back-payment of contributions plus interest. Labor inspections in Hungary have intensified in recent years.

5. What is the difference between an EOR and a PEO in Hungary? 

An EOR becomes the sole legal employer and carries full compliance and payroll liability, with no local entity required from the client. A PEO operates on a co-employment model where the client retains more employer obligations and typically needs a registered entity in Hungary.