Hungary Country Facts

We provide comprehensive information regarding, Culture, Work life, Taxation, Visa’s & immigration, Labour Law, recruiting in your country of choice and employment contracts.

Global Expansion Made Easy for You

Expanding into Hungary generally comes with challenges, however, partnering with us and using Employer of Record (EOR) eliminates the frustrations you could encounter.

Hungary Visas, Work Permits and Migration

With an attractive balance of labour costs and work quality, advantageous business incentives, a competitive tax system, and investment-friendly economic policies, Hungary is a notable global business expansion option that is ripe with opportunities for foreign companies and entrepreneurs.

Hungarian visa and permit regulations vary according to the zones foreign nationals reside in – The European Union, the European Economic Area, and outside zones are all affected by these regulations.

What Types of Work Visas, and Permits for Hungary are there?

For a foreign national to enter Hungary in order to work, there are a few work permits and visas one can apply for:

Types of Permits

  • Individual work permit – For foreign nationals who want to work in Hungary for not more than 90 days over a 180-day period.
  • Joint work permit – For foreign nationals who wish to work in Hungary for more than 90 days within a 180-day period.
  • Residence permits – permits residency in Hungary for up to 90 days.
  • Single application procedure – For non-EEA nationals who wish to reside in Hungary for more than 90 days within a 180-day period. This permit type can only be applied for through an employment relationship with a Hungarian employer.

Types of Visas

  • Long Stay Visa (D) – For those who wish to stay in Hungary long-term, and also acts as a pre-approved residency permit.
  • Working Schengen Visa – This visa type is used for short-term employment opportunities.
  • Schengen Business Visa – For foreign, non-EEA nationals who wish to travel to a Schengen area for temporary purposes. This visa can be used for single or multiple entries. It allows holders to stay for 90 days within six months.
  • Seasonal Employment Visa – for foreign nationals who wish to work in agriculture, animal husbandry, or fishing are eligible for this visa. This allows the applicant to work for no more than 180 days.
  • EU Blue Card – a highly-skilled non-EU worker residing in an EU-member country can apply for this card if a residence permit is also acquired. To be eligible for this card, the foreign national will need to prove 18 months of lawful stay in a member state.

Hungarian Tax Laws

Hungary benefits from a highly skilled and educated workforce, with a strong focus on technology and science. The country also benefits from the lowest corporate tax rates in Europe, as well as excellent infrastructure, and a variety of governmental and municipal incentives.

We have made it our goal to keep track of the latest changes in the tax policies to always ensure complete compliance. To keep you informed and updated too we created this guide which includes the basic facts regarding tax regulations in Hungary.

Overview of Taxes in Hungary

  • Individual Income Tax: 15%
  • VAT: 27%
  • Corporate Income Tax: 9%
  • Social Security Contributions: 18.5% (Employee), 17% (Employer)

Hungary Individual Tax – Single, Married

An individual’s liability to pay income tax is determined by their residency status as well as the source of their income. Both residents and non-residents are taxed on their income – residents are taxed on worldwide income, whilst non-residents are only taxed on income received from Hungarian sources.

Two types of income are considered in Hungary:

  1. Income to be taxed together: income from employment, self-employment, and other income
  2. Income to be taxed separately: benefits, capital gains, income from private businesses, and income from rental properties.

Individual income that is derived from employment activity which is performed in Hungary is considered as domestic-source income, even if it is paid from abroad. In these cases, income tax is still due.

The current tax return system is based on self-assessment – individuals can file tax returns themselves or review draft tax returns prepared for them by the tax authorities via the online tax authority platform known as Client Gate (or eSZJA) and can amend, as necessary.

If you do not have access to the personal platform, however, you can ask for your Income Tax Declaration Draft via post and SMS. However, it is mandatory to register for a Tax Identification Number.

The Personal Income Tax (PIT) in Hungary is a flat rate of 15% on taxable gross income. Besides that, individuals are subject to pay social security contributions, which amounts to 18.5% of their gross income. Both income tax and social security contributions are withheld by employers and paid to the National Taxes and Customs Administration (NAV) monthly. Employers must pay by the 12th day of the following month.

Individuals with income that is not subject to withholding should make quarterly income tax advances, which applies for employment income that is not Hungarian-sourced. In this case, payers are required to make reports on total payments to the tax authority, which include benefits and expenses paid or reimbursed.

Tax Returns are due by the 20th of May of the following tax year. Taxable income and liabilities should be determined and declared in Hungarian forints, in which there are specific rules to determine the forint exchange rate with other currencies.

In the case of married couples, both individuals are to be taxed separately.

Non-residents in Hungary are taxed on Hungarian-sourced income – if the company is the payer, they must withhold the income tax advances. In other cases, it is the obligation of the individual, and must be declared in an annual tax return. Payments on tax advances must be made by the 12th day of the following month.

Hungary Entity Set Up

In Hungary, foreign subsidiary entities hold the same company standing as any other conventional company in the country and are treated as equals with domestic businesses. They enjoy independence from their parent company and are subject to all national laws of Hungary.

The registration process comes with some variation (depending on the company type), but it is generally straightforward and can be done with little difficulty. Once that is done, however, setting up a subsidiary in Hungary involves a heavy workload.

How to set up a Hungarian Subsidiary

  • Decide on the best company type that suits the nature of your business and international expansion plans. Common company types in Hungary include: The Limited Liability Company (KFT), The Joint Stock Company (JSC), a branch office, a representative office, a trust, or a foundation.
  • Obtain a business address in Hungary and prepare the property documents for registration.
  • Acquiring legal representation from a legal professional in Hungary and/or acquire the services of a domestic law firm.
  • Register for a commercial license with the Hungarian Ministry of Economy.
  • Prepare the appropriate registration documents and have them translated to Hungarian or English (depending on the document types).
  • Open a local bank account in Hungary and deposit the appropriate share capital.
  • Notarize and legalize the registration documents at a notary’s office.
  • Register your company at the Company Registry.
  • Register for a VAT Number and a Tax Identification Number with the regional and national tax authorities.
  • Register in the municipality with the Court of Registration.
  • Register the company’s address with the Chamber of Commerce and Industry.
  • Register for a social security number with the National Office for Health Insurance.
  • Receive a Tax Identification Number, a certificate of registration and a unique registration number.

Benefits of setting up a Subsidiary in Hungary

Hungary is a compelling destination in the Baltics for subsidiary establishment and growing a business’ influence. There are also other significant benefits to establishing an entity in Hungary:

  • Subsidiaries in Hungary are taxed the same as any other resident company.
  • Subsidiary entities in Hungary also benefit from double tax treaties, in which there are significant reductions in tax payments on dividends, interests or royalties paid to the foreign country.
  • Hungary has the highest adult literacy rate of the region with, according to the UNESCO Education and Literacy Report (2020).
  • Hungary boasts strong industrial sectors, with specialties in automation, electronics, and pharmaceutical and medical technology.
  • Hungary benefits from the lowest tax rate in Europe, and no withholding taxes.
  • Hungary also benefits from low administration and labor costs.
  • Hungary also boasts a highly educated workforce, with a particular emphasis on engineering, medicine, and economics.
  • Hungary’s well-established infrastructure gives entities high-quality logistics options to access markets easily and affordably to the rest of Europe.

The Hungarian Market

Foreign companies who wish to expand into Hungary will be met with the one of the strongest manufacturing sectors in Europe, a skilled and educated workforce, attractive tax incentives, and a variety of growth incentives and collaborative opportunities for investors with the state.

However, setting up shop in an unfamiliar place comes with its own challenges. Foreign businesses must comply with employment, tax, payroll, and corporate legislation whilst ensuring that their employees are working productively and efficiently.

Starting a Business in Hungary

Hungary’s geographical position benefits from international access to diverse marketplaces in the EU, Russia, and Asia. With a strong industrial and manufacturing sector specializing in electronics and automotive, and high-quality logistics, this creates an attractive environment for any business owner who seeks to expand their business.

To start a business in Hungary you must go through a company registration procedure, which is straightforward and designed to be executed easily. These steps can be done in person or online through the one-stop-shop Companies Register website.

The necessary steps to start a business in Hungary include:

  • Obtaining a local business address.
  • Obtaining a commercial license from the Hungarian Ministry of the Economy.
  • Opening a bank account in Hungary to deposit the appropriate share capital.
  • Obtain legal representation through a local representative or law firm.
  • Preparing the appropriate registration documents and having them translated to Hungarian or English.
  • Notarizing and legalizing the registration documents at a notary’s office.
  • Register your company at the Company Registry.
  • Register in the municipality with the Court of Registration.
  • Register for a VAT Number and a Tax Identification Number with the regional and national tax authorities.
  • Register with the National Health Insurance Fund (NEAK).
  • Register with the Central Office of Statistics (KSH).
  • Receive a company incorporation certificate, a tax identification number, and a social security number.

Expanding into Hungary

Foreign companies wishing to expand into Hungary will be swept into a thriving economy with a sizable talent pool, and attractive administrative and labor costs – which is provided to all companies that enter their market. The country’s position in the center of Europe offers easy trade access to the rest of the continent, with its strong connections by air, water, land, and rail.

Hungary boasts a formidable industry sector, which contributes over 30 per cent of the gross value added and employs over 1 million workers. However, the country also does well in other sectors such as commerce, information and communication, and agriculture.

These industries have a lot of opportunity for expansion both nationally – to other popular cities such as Budapest, Debrecen, Szeged, Miskolc, Pécs, and Gyor – and internationally.

Hungarian Business Facts

  • Capital City – Budapest
  • Population – 9,730,000
  • Cities – Debrecen, Szeged, Miskolc, Pécs, Győr, Nyíregyháza, Kecskemét
  • Official language(s) – Hungarian
  • Economy/GDP (2020) – $316.342 million, (53rd)
  • World Ranking (Ease of Doing Business) – 52nd
  • Leading sectors – Information technology, motor vehicles, pharmaceuticals, electronics, textiles, food processing, construction materials
  • Main exports – refined petroleum, corn, poultry meat, hot-rolled iron, vehicle parts, cars, spark-ignition engines, packaged medicines,
  • Main imports – crude petroleum, petroleum gas, refined petroleum, other iron products, raw aluminium, integrated circuits, office machine parts
  • Main trading partners – Germany, Romania, Italy, Austria, Poland, Netherlands, Czech Republic, France, Slovakia, China
  • Government – Unitary parliamentary constitutional republic
  • Currency – Forint (HUF)

Advantages and Challenges of the Hungarian Market

The Hungarian market has a variety of significant advantages:

  • Low labor costs: Labor costs are significantly cheaper in Hungary than its other European counterparts, allowing the country to integrate itself optimally into the European production chain, and is considered an efficient production hub.
  • Competitive tax system: Hungary boasts the lowest tax rate in Europe.
  • Educated workforce: Hungary’s workforce is highly educated and skilled, with an emphasis on engineering, medicine, and economics.
  • Language: The local workforce is multilingual, but the main language for business is English.
  • Ranking: Hungary ranks 1st in ‘Trading Across Borders’ for the Ease of Doing Business Survey.
  • Logistics: Hungary’s location in Europe offers a variety of logistics options such as motorways, railways, ships, and air.
  • EU Benefits: Hungary is a member of the European Union and enjoys the same trade benefits of other EU nations.

The biggest challenge facing the Hungarian market currently is the effects of COVID-19, like many other nations in the EU and around the world. Other challenges include unpredictable and sector-specific tax regulations, low talent pools, and high VAT rates, but reforms and incentives are taking place to combat these challenges.

Limited Company / Subsidiary or Branch in Hungary?

A subsidiary established in Hungary is considered a legal separate entity from the parent company, with independent administration and management, providing freedom explore the local market and create international credibility.

A branch, however, does not have any independence from the parent company, but it is taxed and reported similarly to resident entities, and is limited in its commercial activities.

Hungarian Contracts

If a foreign company is looking to hire resident employees as part of their international expansion into Hungary, they must comply with recruitment regulations such as tax, social security contributions and local employment laws. You probably also must collaborate with or adhere to any collective bargaining, trade unions or work council agreements. Our PEO services with various solutions to support your plans, can provide compliant employment contracts for your new employees.

In Hungary, an employment contract must be concluded in writing. Failure to do so will invalidate the contract if the employee raises an objection to this within 30 days after the first day of the commencement of work. There are two types of contracts that are applied in Hungary:

  1. Indefinite employment contract – the standard type of employment contract in Hungary, which is used for indefinite employment.
  2. Fixed-term employment contract – This is also practiced in Hungary, although this type of contract must be expressly stated in the contract and agreed to by both the employer and the employee. A fixed-term contract cannot exceed 5 years. When employment is subject to a license or permit, the contract can be terminated if authorisation has been received from the relevant authorities.

All employee contracts, irrespective of the type, must contain the following statutory conditions:

  • the names and particulars of those engaged in the employment
  • the employee’s basic salary
  • the employee’s role

It is also best to include additional terms such as:

  • the place of work
  • probation periods
  • the required notice periods
  • the conditions of the collective agreement or work procedure regulations that apply to the employment relationship
  • the start date and duration of the employment relationship (for fixed-term contracts only)

The Labour Code does not require the job description of an employee to be in the contract, as the contract cannot be amended separately. It is thus best practice to prepare a separate document which contains the job descriptions of all employees – the contract should refer to this document, and the relevant section should be handed over to the employee either immediately after the signing or no later than 15 days after the commencement of work.

The provisions of the Labour Code are binding – however, an agreement between both parties or a collective a collective bargaining agreement may deviate from these terms, but only in such cases where deviation provides more favorable terms for the employee.

Employee Benefits

Happy and satisfied employees make your business thrive and lead to even better profits. However, the specific benefits for employees in Hungary might not all be familiar to you yet. By using our PEO and EOR service we can provide compliant labour contracts for employees in Hungary including local benefits.

What Compensation Laws exist in Hungary?

In Hungary, compensation laws are set by the Labor Code and national legislation, but the types of compensation can vary according to the sector the employees are in, regulations of applicable collective agreements, and the internal regulations of the company.

For example, there is no 13th month payment in Hungary, but companies can choose to pay a yearly bonus – other employee bonuses are also negotiated between the employer or employer when the contract is being drawn up and signed.

There are, however, other benefits/compensation that are guaranteed by national legislation:

  • National Minimum Wage: There are two types of in Hungary: the basic minimum wage, and the guaranteed minimum wage (for secondary qualifications and higher). Employees in Hungary must receive at least these amounts for their work. Both were recently increased in 2021 to HUF 167,400 and HUF 219,000, respectively.
  • Social Security Contributions: Employees in Hungary are entitled to social security benefits. Social security contributions are paid monthly through contributions by the employee and the employer (employee contributions are withheld by the employer), and include insurance for state pensions, unemployment, and health insurance.
  • Notice Periods: Notice periods in Hungary are mandatory and vary according to the termination type.
  • Termination and Severance: Employees are entitled to severance pay after having served for 3 years or more in employment and is granted expect in cases of termination due to misconduct. Termination can be of either the employee’s or the employer’s will. The standard notice is one month but may also depend on the grounds of dismissal.
  • Work Hours and Breaks: Employees are entitled to paid breaks, which are between 30-60 minutes in an average workday.
  • Sick Leave: All employees in Hungary are entitled to sick leave and compensation, which is paid by both the employer and social security funds.
  • Holiday/Vacation Leave: Employees are entitled to annual leave, as well as leave on public holidays. Annual leave starts at 20 days and increases according to an employee’s age.
  • Maternity Leave: Employees are entitled to 24 weeks of maternity leave but are also allowed to take up to 3 years off and receive maternity benefits by the National Health Insurance Fund (NEAK). For the first six months, mothers are entitled to a Pregnancy and Confinement Benefit (CSED) at a rate of 70% of their salary.
  • Paternity Leave: Fathers are entitled to 5 days’ leave in the first two months of the child’s birth. Any income and taxes related to this period is reimbursed by the Hungarian State Treasury.
  • Parental Leave: After the maternity leave is over, one parent is entitled to parental leave up until the child reaches the age of 2 years old, as well entitled to a Child Care Fee (GYED) at a rate of 70% of the salary that can go up to double the minimum wage.

Social Security in Hungary

Employees in Hungary are entitled to social security benefits. Social security contributions are paid monthly to the Tax and Customs Administration and the National Health Insurance Fund through contributions by the employee (18.5%) and the employer (17%). Employee contributions are withheld by the employer and paid to the relevant authorities on the employees’ behalf.

Social security contributions include insurance for state pensions, unemployment, and health insurance.

  • Employer’s Contributions: Social Security (15.5%), Vocational Training Fund (1.5%)
  • Employee’s Contributions: Pensions (10%), Health Insurance (7%), Unemployment (1.5%)

Foreign nationals are not subject to the Hungarian social security systems if their assignment does not exceed 2 years, which applied to both the individuals’ part of the social security contributions and the social tax payable by the employer.

Statutory Employer Costs in Hungary

Statutory Costs in Hungary include meeting the standard employee wages, income tax, and social taxes.

Employers must meet the minimum wage (basic or guaranteed, depending on the employee’s qualifications), and ensure that the necessary payments from their wages to the local authorities are made on time, which include:

  • Income Tax – income tax is to be withheld from the employee every month and paid by the employer monthly to the local tax authorities.
  • Social security – social security payments are to be made by both the employer and the employee monthly.

Hungarian Top Talent

Hiring the right talent in Hungary to expand your company can result in a thriving business with numerous opportunities. However, the recruitment process is complicated when you have no physical presence in Hungary yet. Our PEO and EOR service can be the solution for your company.

Whether you need to find the best portals to locate your new employees in Hungary or need to create a compliant job offer they cannot refuse with extensive experience in Hungary, we can help you find and hire the best match to support your company goals while following the local laws and regulations.

The Recruitment Process in Hungary

A foreign company expanding into Hungary does not require the assistance of a local entity to hire their employees. It is, however, vital to your recruitment efforts to know where you can find the right talent, as well as which local and international employment organizations they can collaborate with to access the right talent pools. Once the right employee is found, the employer must follow thorough staffing and registration procedures. These include:

  • Registering with the National Tax and Custom Administration for a tax number and to pay social insurance contributions
  • Registering with the National Health Insurance Fund (NEAK)
  • Registering employees with the National Employment Services
  • Register with the online Company Gate Services for administration services
  • Creating employment contracts and translating them to Hungarian
  • Applying for employees’ employment invitations and work permits
  • Applying for employee’s visas or special expatriation status (if applicable)
  • Calculating employees’ monthly salary and creating pay slips
  • Researching for any available tax-free allowances or benefits
  • Submitting wage tax returns and national insurance forms
  • Corresponding with the involved parties (organizations, trade unions, etc.)
  • Creating annual accounts, financial administration, and year-end statements
  • Creating a payment schedule for wage tax, national and social insurances, and net wages

Legal Checks on Employees in Hungary

When commencing the recruitment process in a foreign country, employers should consider their legal obligations. Hungary must also implement laws of the EU, which require employers to execute equal treatment in the workplace, as well as protect their employees against discrimination based on several characteristics – such as race, nationality, gender, sexual orientation, religion, age, disability, etc.

This law includes background checks, which are only considered fair and legal if they relate directly to a job and are necessary for reaching a decision on recruitment. Following the Data Protection Directive 95/46/EC put in place by the EU, these background checks may only be carried out with the consent of the candidate.

Nevertheless, employers recruiting in Hungary may request the undermentioned checks (following certain conditions):

  • Reference and educational checks: Often done in practice, to assess a candidate’s suitability regarding work performance.
  • Criminal background checks: checked in relation to certain occupations and are only allowed if it provides certain information with respect to the job position.
  • Medical check-ups: is required to be done before the commencement of work.
  • Immigration compliance
  • Employment history checks

Basic Facts on Hiring in Hungary

  • An employer’s questions during an interview are regulated by EU data legislation – they must directly relate to job specifications and requirements.
  • Terms and conditions of employment in Hungary are regulated by the Labor Code.
  • For onboarding employees, you will need certain documentation: A social security number, a tax identification number, registration card (if member is part of from another EU country), and a resident and work permit (if an employee is a non-EEA national).
  • Employers must follow anti-discrimination laws in Hungary throughout the process of recruitment, which prohibits discrimination on the basis of origin, political belief, and worldview, with further legislation preventing discrimination on the basis of racial origin, sex, age, financial status, disability, health status, family status, nationality, sexual orientation, membership of a trade union or other organization representing employee’s interests, and type of employment relationship.
  • Collective agreements also play a significant role in employment conditions – trade unions can only conclude collective agreements at the company level if membership exceeds 10% of those employed at the company. This also applies for industry-level agreements. Collective agreements last for two years, although they are sometimes valid for an unlimited period. Agreements on pay increases at company level are usually annual.
  • Administration and enforcement of employment requirements are governed by the National Employment Service – which is split into a National Employment Office at the national level, Labor Centers of Government Offices at County Level, and Branch Offices at the local level.
  • In Hungary, employment contracts must be established in writing, and must not be contrary to the applicable collective bargaining agreement – unless the employment terms are more favorable for the employee.
  • If an employment contract is not provided in writing by the employer within 30 days from the job’s commencement, it can be cited as invalid by the employee.
  • The standard contract type is an indefinite contract.
  • Fixed-term contracts are also practiced, but their validity may not exceed 5 years.
  • The standard working time is 8 hours a day and 40 hours a week, but this can be altered according to the type of employment contract and work.
  • Employers must at least meet the minimum wage for the employee’s salary, but the average monthly salary may differ according to the industry and sector.
  • Overtime work cannot exceed maximum of 4 hours daily, and 8 hours weekly. Any employee who works overtime should receive a supplement of no less than 150% of their hourly rate (200% during the weekends and holidays), or fully paid time off for no less than the amount of overtime that has been worked.
  • Employees are entitled to at least 11 hours of interrupted rest after the end of daily work and until the beginning of next day’s work. In a week, employees are entitled to 2 rest days.
  • Employers are obligated to with-hold and pay employees’ personal income tax and social security contributions monthly.
  • The standard notice period for employment termination is one month – however, this may vary according to the employment contract and cannot exceed one year.
  • Under the Labor Code, the employment notice can be extended according to the length of the employee’s length of service:
    – 3-5 years: 35 days
    – 5-8 years: 45 days
    – 8-10 years: 50 days
    – 10-15 years: 55 days
    – 15-18 years: 60 days
    – 18-20 years: 70 days
    – 20+ years: 90 days
  • The probationary period is generally agreed upon between the employer and employee but should not exceed 3 months. According to an applicable collective bargaining agreement, this period may be extended to 6 months.
  • Termination of employment during probation may be done with immediate effect and without justification.

Work Culture

To succeed in business in Hungary, it is vital to have a strong understanding of the country’s business culture. Hungarian business culture is modernizing and reflects ongoing changes in Western society, placing importance on both the work of management and the employees.

Hierarchical structures are still present in Hungarian structures. Punctuality, flexibility, preparedness and socialization are significant to the development of business relationships in Hungary. Local businessmen place great importance in their relationships. Thus, it is important to both you and your local business partners to treat business dealings with respect and great care.

There has been an increasing awareness around the world in the importance of work-life balance and flexible working times, but Hungary still places significant importance on business etiquette for the smooth operation of businesses. Here are some tips and tricks to use during your first few months:

  • Punctuality: Punctuality is important to Hungary’s business culture. It is advised to arrive at least ten minutes before the scheduled meeting time. Business meetings are expected to start on time, whilst public events typically start with a delay of about 10 minutes.Sticking to a strict schedule or agenda is not common, and spontaneity is often a driving force of public events.
  • Languages: Whilst Hungarian is the official language, many people speak several languages due to its closeness to other countries. The business language in Hungary is English, and most businessmen speak English to varying degrees of proficiency – so a few words or phrases in Hungarian can go a long way in breaking the ice and making good first impressions.
  • Business Relationships: Hungarians are generally not reserved, but upon the first meeting they might give that impression. However, once they get familiar with you, they can relax and communicate more openly. Business relationships are usually built on trust and familiarity, and often involve socializing outside the workplace.If the business relationship develops into a partnership, a Hungarian businessman might invite you to their home for a meal and to meet their family.
  • First Contact: First contact is generally done by telephone and followed up by an email. Appointments must be made at least a month in advance and must be confirmed in writing.Having a local representative to facilitate introductions is advised, as introductions are better received by someone known and trusted.
  • Introductions/Greetings: In business, greetings consist of a firm handshake with direct eye contact. When greeting yourself, it is advised to state your name, as well as present your business card.
  • Gift-giving: Gifts are neither necessary nor expected for business relationships – however, small presents like a diary, a pen with a company logo engraving, or a souvenir that represents your company are acceptable.During festive seasons, such as Christmas, businessmen in Hungary can exchange gifts such as a bottle of wine. If invited to a business partner’s home for dinner, it is normally expected to present the host with chocolates, flowers, or a bottle of wine/liquor.
  • Dress code: Business dress in Hungary is generally conservative and formal. Men wear a suit and tie, whilst women wear either a suit or elegant dress. However, the dress code may vary depending on the sector and the formality of the meeting.
  • Formality: It is recommended to address your local counterparts by their titles and surnames, unless invited to address them differently.
  • Meetings Management: Meetings in Hungarian are considered necessary for the exchange of ideas, but agreements are rarely agreed to on the same day. Meetings generally begin with small talk, before the projects are presented. Projects should be well-researched, thorough, and accurate. Decisions are not made on the spot, and talks can last for an extended period.Hungarians are well-prepared, and flexible as business negotiators – their goal is to reach an agreement, so comprising is not off limits. Confrontational behavior, high-pressure sales tactics, and exaggeration should be avoided. Debates in meetings are also regarded as healthy.
  • Agreements: Promises made in meetings are usually respected. However, agreements are only binding when they are written, so it is best not to rely on verbal agreements.
  • Socializing: Socializing is an important part of the relationship-building process in Hungary. Expect many invitations to dinner and cultural events and be sure to reciprocate if you can. Business lunches and dinners are common to getting to know local associates.
  • Hierarchy: Hungarian organizations generally structured hierarchically. Employees are generally not expected to give opinions in the decision-making process, so it is best to establish formal and respectful relationships with executives and managers who will make all the major decisions.
  • Communication: Hungarians prefer face-to-face communication. They are emotive speakers who say what they think and expect you to do the same, and pride themselves on using proper etiquette. They often use stories, jokes, and anecdotes to prove a point, and are suspicious of people who are not willing to share their innermost thoughts. Hungarians also view eye contact as indicative of sincerity.

Hungary Minimum Wage

The minimum wage is determined annually by the government, in cooperation with the National Social and Economic Council. As from the 1 February 2021, the basic minimum monthly wage for full-time employees is HUF 167,400.

Hungary also has a guaranteed minimum wage for jobs that require (at least) a secondary school qualification or secondary vocational qualification, which was also increased in 2021 to HUF 219,000.

Probation Periods in Hungary

When concluding the employment contract, the employee and employer can agree to a probationary period, but it generally it can be no longer than 3 months. A period that is shorter than this limit may only be extended once, but only if the added extension with the old probation period does not go over 3 months.

A collective bargaining agreement, however, can extend this period to 6 months. However, an extension of this probation period is prohibited.

During the probationary period, employment may be terminated by either party with immediate effect or without justification.

Working Hours in Hungary

In Hungary, a typical working day is 8 hours a day, 5 days a week.

The working day starts at 8/8:30am and ends at about 5pm. Office hours can vary, and Friday is often a short day with people leaving at about 4pm or earlier. Daily lunch breaks are between 30 minutes to 1 hour.

Overtime in Hungary

The maximum amount of overtime hours an employer may request from an employee is 250 hours. The maximum daily working hours is 12, and weekly hours 48, both inclusive of overtime. So, an employee can work a maximum of 4 hours of overtime daily, and 8 hours of overtime weekly.

Overtime work is paid with a 150% wage rate, and a 200% wage rate for weekends and holidays.

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