Hungary is a country in Central Europe, bordered by Slovakia, Ukraine, Romania, Serbia, Croatia, Slovenia, and Austria. The labor force in Hungary totals 4,967,071 people as of 2023, with a GDP of 212.39 billion US dollars (2023).

With a developing, high-income mixed economy, Hungary has one of the most industrialized economies in Central Europe. Hungary relies on the automotive and electronics manufacturing industries to prop up its economy and attracts significant foreign investment annually. Employee benefits are highly important to workers in Hungary, with mandatory rights, including parental leave, annual leave, and social security benefits, being highly valued by those working in this country. 

This help guide will provide you with a full understanding of mandatory employee benefits in Hungary, with an overview of Hungarian labor laws and information on how Remote People can help simplify hiring in Hungary.

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Hungarian Employment Laws

Labor laws in Hungary are dictated by the Hungarian Labour Code, which lays out the rights and benefits that employees can expect when working in Hungary.

The Labour Code has received various reforms over the years, from Hungary’s joining the European Union in 2004 to the adoption of the new Labour Code in 2012.

Hungary’s labor laws clearly depict employee benefits that workers in Hungary are entitled to, such as annual leave, maternity/paternity leave, sick pay, and severance packages.

Employers should always seek legal advice before employing in Hungary to make sure their employee benefits align with Hungarian labor law.

Mandatory Employee Benefits in Hungary 

The mandatory employee benefits that employers must provide to their employees in Hungary are explained in detail below:

Social Security Contributions

Hungary operates under a Social Security System, which all employees are affiliated with upon commencement of work in Hungary. Employers pay a social tax contribution (13%), and employees pay social insurance contributions (18.5%), which funds the Hungarian Social Security System.

The Social Security System protects in the following situations in the form of financial benefit:

  • Sickness
  • Maternity
  • Old-age
  • Invalidity
  • Occupational diseases
  • Accident/injury at work
  • Survivorship
  • Child education
  • Unemployment

Annual Paid Leave

Employees in Hungary must have worked for a company for 12 months to be entitled to annual leave.

The minimum amount of annual leave in Hungary is 20 working days per year. This amount increases with the age of the worker, with a worker 25 years old entitled to 21 working days of paid leave.

This increases by one day every 2 years until the worker reaches 45 years of age, whereby workers start being entitled to 30 working days of leave per year.

Workers are also entitled to additional days of leave if they have children, receiving 2 extra days per year for 1 child, 4 extra days for 2 children, and 7 days for more than 2 children under the age of 16.

Employees that work permanently underground or spend 3 hours per day exposed to ionizing radiations are entitled to an extra 5 days of paid leave, as are employees suffering a degree of health impairment of at least 50%.

Working Hours

Working hours in Hungary consist of 8 hours per day and 40 hours per week. This is usually spread over 5 working days, with 2 days off.

An exception to this rule applies to employees who are close relatives of their employer or employed in a standby position. In these cases, employees are permitted to work up to 12 hours per day or 60 hours per week.

National Minimum Wage

Hungary operates under a government-mandated minimum wage, which employers must provide to their employees by law.

The minimum wage in Hungary as of the 1st of January 2025 is HUF 290,800 per month.

Overtime Pay

Overtime is considered working hours that are completed outside of regular working hours. Workers can perform a maximum of 400 hours per year (or the proportional hours).

The rate of overtime pay is 150% of an employee’s typical wage. If overtime is performed on a weekly rest day or public holiday, a wage supplement of 100% of the employee’s average wage must be paid in addition to the overtime pay.

However, if the employer provides an extra rest day in return, the wage supplement can be reduced to 50%.

Public holidays in Hungary are typically paid and given as days off. The public holidays in Hungary in 2025 are as follows:

  • January 1, 2025: New Year’s Day
  • March 15, 2025: 1848 Revolution Memorial Day
  • April 18, 2025: Good Friday
  • April 20, 2025: Easter Sunday
  • April 21, 2025: Easter Monday
  • May 1, 2025: Labor Day / May Day
  • May 2, 2025: Labor Day Holiday
  • June 9, 2025: Whit Monday
  • August 20, 2025: Hungary National Day
  • October 23, 2025: 1956 Revolution Memorial Day
  • October 24, 2025: 1956 Revolution Memorial Day Holiday
  • November 1, 2025: All Saints’ Day
  • December 24, 2025: Christmas Eve
  • December 25, 2025: Christmas Day
  • December 26, 2025: Second Day of Christmas

Workers in Hungary are entitled to paid sick leave if they are absent from work due to illness.

The first 3 days of sickness are generally unpaid. After the first 3 days, workers are entitled to 15 working days in the event of sickness, payable at the rate of 70% of their daily gross earnings.

Sickness benefit is granted if an employee is on sick leave for over 15 days, at which point 60% of the average gross daily pay is paid (not exceeding double the gross minimum wage).

Job security is protected during the first year of sickness, with employers not permitted to serve notice of termination ot a wick worker.

Maternity Leave

Maternity leave in Hungary entitles female employees to 168 calendar days (24 weeks) of paid maternity leave. Of these 24 weeks, 4 weeks must be taken before the expected due date of the birth, with the remaining 20 weeks to be taken after the baby is born.

Workers are paid 70% of their average daily earnings, and employees must have a minimum of 180 days of insurance earned in the 2 years before the child is born. Maternity benefit is paid by the Hungarian government.

Women cannot be dismissed from their jobs during pregnancy or maternity leave, and their job role must be protected throughout maternity leave so that they can return to their same duties.

Female workers are also entitled to paid nursing breaks of one hour twice a day or two hours twice a day in the case of twins. 

Paternity Leave

Fathers are eligible for five days of paid paternity leave (or 7 days in the case of twins) when they welcome a new baby. This paternity leave must be taken in the first two months of the child’s life.

Paternity leave is paid by the Hungarian government. Fathers working in the public sector are eligible for 10 working days of paternity leave in the first 2 months after birth.

Parental Leave

All employees are entitled to parental leave to take care of their child in the first 3 years of the child’s life. Parental leave is unpaid.

Employees are eligible for parental leave whether they have their children biologically or via adoption.

Pension

The pension system in Hungary is a one-pillar, pay-as-you-go system. All employees in Hungary must be enrolled in this pension scheme, with payments being made by both employees and employers via social security contributions.

Retirement age in Hungary is 62 for people born in 1951 or earlier and 64 for those born in 1952 or later.

People must have contributed to the pension scheme for at least 20 years in order to qualify for a minimum pension. The minimum pension in Hungary is HUF 28,500 per month.

Hungary also has voluntary private pension funds that workers can contribute to for additional pension savings upon retirement.

These funds are separated into the following categories:

  • Supplementary private pension funds
  • Pre-retirement savings accounts
  • Occupational pension schemes
  • Products of private retirement insurance

Severance Pay

If an employer initiates the termination of an employee’s contract due to dissolution of the employer without a legal successor, employees are entitled to severance pay.

However, employees are not entitled to severance pay in the following circumstances:

  • If an employee was a pensioner when their contract was terminated
  • If the employee’s contract was terminated because of employee misconduct or non-health-related capacity

Severance pay is payable as per the following:

Years of ServiceSeverance Pay
At least 3 years1 month’s pay
At least 5 years2 months’ pay
At least 10 years3 months’ pay
At least 15 years4 months’ pay
At least 20 years5 months’ pay
At least 25 years6 months’ pay

If an employment contract has been terminated within 5 years of an employee reaching retirement age, severance pay increases by 1 – 3 months, depending on the employee’s years of service.

Supplementary Employee Benefits in Hungary

It is strongly recommended that employers consider offering supplementary employee benefits to their workers.

This is because staff retention rates tend to be higher with increased employee benefits, plus it can help to attract new prospective employees to job vacancies.

Some supplementary employee benefits that companies should consider offering include:

  • Performance bonuses
  • Private healthcare/dentistry
  • Enhanced holiday/parental leave
  • Private pension schemes
  • Expenses for transport, food, and accommodation

Optimize Employee Benefits with Remote People

Remote People can make hiring in Hungary a much easier process through our Employer of Record (EOR) services. Our EOR solution takes on the legal and administrative responsibilities of hiring—such as compliance, payroll, and employee benefits—so you can focus on growing your business with confidence.

We can also help you hire the best talent in Hungary via our Hungary recruitment services. Our experienced team is fluent in the local language, customs, and recruitment space in Hungary, giving your business an advantage when hiring in this country. Reach out to us to see how we can help you hire the best people in Hungary for your business.