Employer of Record (EOR) in Hungary

An EOR in Hungary allows businesses to enter the market quickly and help maintain compliance with local laws, all while reducing the overhead costs of establishing a local entity. Atlas HXM offers a seamless EOR service that handles all aspects of employment for workers who already have valid authorization to work in Hungary from payroll processing to compliant administration.

Partner with Atlas HXM for a cost-effective, compliant solution to hire and manage your workforce in Hungary.

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Quick Overview of EOR in Hungary

Expanding into Hungary doesn't have to mean drowning in paperwork or hefty setup costs. With an Employer of Record (EOR), you can bypass the complexities of local regulations and quickly hire employees, all while maintaining compliance with Hungary's labor laws. From payroll processing and tax compliance to benefits management, an EOR takes care of the legal nitty-gritty like social insurance contributions, so you can focus on growing your business without the need to set up a costly local entity.

The EOR model offers a low-risk, cost-effective alternative to setting up a subsidiary. Establishing a local entity in Hungary can cost anywhere from USD 1,500 to USD 5,000 plus the cost of maintaining human resources (HR), legal assistance, accountants and more. It can also become highly administrative. By partnering with an EOR, you can avoid these setup costs and enter the market faster, avoiding the overhead of a physical office. This is especially beneficial for startups, SMEs, and businesses testing new markets, who need to act quickly and comply with complex local regulations.

Disclaimer: The contents of this article is not legal advice and should be used for reference only. If in doubt, please seek independent legal advice from a lawyer in the relevant jurisdiction.

What You'll Learn

  • Looking to hire in Hungary without the hassle and administrative burden of setting up a local entity? An EOR helps you onboard employees while maintaining compliance with payroll and local labor laws.

  • With a Direct EOR, you gain control, faster onboarding, and stronger compliance. It is ideal for businesses aiming to scale quickly.

  • On the other hand, an Indirect EOR may be more cost-effective but comes with slower processes and added complexity.

  • EOR service fees typically range from USD 300 to USD 800 (EUR 270 to EUR 720) per employee per month.

  • Atlas HXM offers a robust Direct EOR solution, providing smooth market entry, compliance, and seamless employee management: all in one platform.

How an EOR Works

At Atlas HXM, we provide EOR services that ensure your business remains compliant with Hungary's labor laws while you focus on growing your operations, free from administrative and legal burdens.

Candidate Selection

Atlas HXM does not recruit candidates, but will check the employment setup for compliance around new hires like validating right-to-work, reviewing contract terms against Hungarian rules, and configuring payroll and statutory obligations correctly. EOR providers in Hungary, including Atlas HXM, can assist with work permit applications for non-EU nationals. Anyone hired via EOR must either already hold valid work authorization or be eligible for sponsorship through the EOR's local entity.

Employment Contracts

Atlas HXM drafts and administers employment contracts in compliance with the Hungarian Labor Code. We clearly outline key employment terms to reduce risk of future disputes, such as:

  1. Job title and responsibilities

  2. Salary, benefits, and working hours (maximum 8 hours daily, 48 hours weekly)

  3. Leave entitlements and notice periods

Payroll & Benefits Management

Payroll is processed in Hungarian Forints (HUF), including:

  1. Accurate tax withholdings and social insurance contributions

  2. Statutory benefits such as health insurance and pension contributions

The EOR also helps maintain compliance with mandatory benefits, so employees are protected under Hungary's laws.

Work Permit Compliance

In Hungary, EOR providers can assist with work permit applications for non-EU nationals. Atlas HXM manages compliant employment, payroll, social insurance, and statutory obligations in alignment with Hungarian immigration regulations.

Ongoing HR Support

Provides HR support, including: Leave management, employee relations and regulatory updates throughout the employee's tenure. This allows businesses to focus on core operations, while Atlas HXM handles ongoing compliance.

Costs & Pricing

EOR services in Hungary are typically billed as a platform/service fee in the range of USD 300–800 (EUR 270–720 / HUF 110,000–290,000) per employee per month. This fee covers administration such as compliant contracts, payroll processing, statutory filings, and HR administration for workers who already hold valid work authorization. This service fee is separate from the employee's salary, benefits, taxes, and permit-related costs, which vary by role and jurisdiction. By using an EOR, companies avoid the cost and overhead of setting up a Hungarian entity, which can require USD 1,500–5,000 upfront before any operational spend.

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What to Choose: EOR vs PEO

EOR

Employer of Record

An EOR becomes the legal employer for your talent in a country where you do not have an entity. The EOR handles compliant contracts, payroll, statutory benefits, tax filings, and labour-law adherence. You still direct the employee's work. This model suits companies expanding into Hungary without wanting to form a local entity or take on compliance risk.

PEO

Professional Employer Organization

A PEO provides outsourced HR services like payroll, benefits, HR admin, but only when you already have a local entity. You remain the legal employer, and the PEO shares administrative tasks without taking on employer liability. This model is suitable when you are already established in the country and are only looking to offload HR administration.

What’s Best for You?

  • Choose an EOR when you want to hire in Hungary without setting up an entity and want a partner who can take on contracts, payroll and compliance.

  • Choose a PEO when you already operate locally and just want HR support.

Work Life in Hungary

Hungary's employment framework is designed to balance operational needs with employee protections. Here's what you need to know:

Employment Types:

  • Permanent: Ongoing employment with full statutory benefits for indefinite duration.

  • Fixed-Term: Hired for a specific project or defined duration (maximum 5 years including renewals).

  • Temporary: Agency work assignments with maximum duration of 5 years.

Probation Periods: Standard probation periods are up to 3 months (6 months under collective agreements) and must be outlined in the employment contract. These periods allow employers to assess employee suitability before offering permanent employment. During probation, either party may terminate without notice or reason.

Working Hours & Overtime: In Hungary, the standard workday is 8 hours with a maximum of 12 hours per day (24 hours for standby jobs). The weekly working time may not exceed 48 hours (72 hours for standby jobs). Employees must receive appropriate breaks during their workday. Overtime is paid at 150% of the base wage (50% premium), and the EOR ensures that all overtime is calculated correctly with a maximum of 250 hours per year.

Leave Entitlements

Leave Type

Eligibility / Duration

Payment / Notes

Annual Leave

20 working days plus additional days based on age and children

Paid by employer; increases with age and number of children

Maternity Leave

24 weeks

100% of average gross earnings for 168 calendar days

Paternity Leave

10 days

Paid leave for working fathers until end of second month after birth

Sick Leave

15 working days per year

60% or 50% of average daily earnings paid by employer

Public Holidays

All statutory holidays

Paid; 100% wage supplement if required to work

Vacation Leave

As per company policy / statutory minimum

Paid; unused leave typically paid out upon termination

Payroll & Benefits: Wages must meet minimum wage requirements (HUF 290,800 for general workers, HUF 348,800 for skilled workers). Atlas HXM manages payroll in HUF, social insurance contributions (employer and employee), statutory benefits, bonuses, and private health insurance. Supplemental benefits can include meal vouchers, transportation allowances, and professional development options.

Atlas HXM can help you manage these aspects and can help ensure that employees are supported and compliant with Hungary's labor laws while businesses can focus on operations without administrative burdens.

More Reading

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What to Choose: Indirect vs Direct EOR

Direct EOR

The EOR owns the legal entities in the target country, coordinating all employment-related tasks directly. It offers faster onboarding, better compliance, and more control.

Best for: Businesses looking to scale quickly, expand long-term, or enter Hungary with compliance.

Indirect EOR

The EOR provider acts as an intermediary between the business and a third-party local entity. While it can be cheaper, it may result in delays and compliance complexity.

Best for: Small teams or short-term hires with less urgent compliance needs.

What’s Best for You?

  • For Small Teams or Contractors: Indirect EOR could work, especially for temporary hires or testing a market.

  • For Scaling and Compliance: Direct EOR is the best choice. With Atlas HXM, you'll have control, faster entry, and streamlined compliance.

Taxes & Compliance

Hungary operates on a calendar-year tax system, running from January 1 to December 31. Employers must submit monthly payroll taxes and social contributions by the 12th of the following month, provide annual tax certificates to employees by January 31st, and file annual reconciliation returns. Personal income tax returns are due by May 20th for individuals required to file.

Category

Details

Employer Payroll Tax

Social contribution tax: 13% of gross salary

  • Vocational training contribution: 1.5% (companies with >5 employees)

  • No upper limit on contributions

Employee Payroll Tax

Personal income tax: 15% flat rate on all income

  • Employee social contributions: ~3.5% of gross salary

  • Total employee burden: ~18.5% of gross salary

Pension System

Mandatory 2-pillar system: state pension + voluntary private funds

  • Retirement age: 65 years (born 1957 or later)

  • Minimum 20 years contributions for full pension

  • Benefits based on service length and average earnings

VAT & EOR Costs: Hungary applies a 27% VAT rate (one of the highest in the EU). EOR services are subject to VAT, either included in quoted fees or added separately. EU companies may use reverse charge mechanisms, while non-EU companies may recover VAT through specific procedures.

Atlas HXM handles tax compliance, including flat-rate income tax calculations, social insurance contributions, year-end filings, and expatriate tax equalization, ensuring businesses remain compliant with local laws while minimizing administrative burden.

Termination

Employees must give written notice for termination, with statutory minimum notice periods of 30 days for employee-initiated terminations, and 30-90 days for employer-initiated terminations depending on length of service. Probationary employees can be terminated without notice. Severance pay is mandatory for employees with 3+ years of service (1-6 months' salary based on tenure), with additional payments for those within 5 years of retirement. The EOR helps ensure proper handling of terminations, including notice periods, final wages, and required documentation.

5 Things to Look for in an EOR Provider in Hungary

  1. Local Expertise: Deep knowledge of Hungarian Labor Code, social insurance contributions, and immigration requirements for compliant hiring.

  2. Advanced Technology: Robust payroll processing, HR system integration, and Hungarian language support for seamless operations.

  3. Industry Experience: Proven track record managing work permits for non-EU nationals and sector-specific compliance needs.

  4. Compliance Track Record: Strong relationships with Hungarian government agencies and legal advisors ensuring regulatory adherence.

  5. Global Presence: Multi-country support with verified security standards (ISO 27001/27017/27018, GDPR) for international expansion.

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Atlas HXM provides direct EOR services, managing payroll, compliance and benefits efficiently. Our unified platform automates HR, payroll, and compliance tasks, while offering premium employee support, global benefits, and access to 9,000+ learning courses. Recognized by Everest Group PEAK Matrix 2025 and NelsonHall NEAT Assessment 2025, Atlas HXM combines compliance, technology, and global expertise.

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FAQs

How long does it take to hire an employee through an EOR in Hungary?

The hiring process typically takes 5-10 business days once documentation is complete, including contract preparation and authority registration. Non-EU nationals requiring work permits may need several additional weeks.

What is the minimum wage in Hungary?

As of December 2023: HUF 290,800 per month for general workers, and HUF 348,800 per month for skilled workers with secondary education or vocational training.

Can employees work remotely in Hungary?

Yes, but must be explicitly agreed in the employment contract. Remote workers can work outside employer premises for maximum one-third of total working days per year.

What are the mandatory benefits in Hungary?

Social insurance coverage, 20+ days annual leave, 15 days sick leave, 24 weeks maternity leave, and 10 days paternity leave.

How much notice is required for termination?

Minimum 30 days, extending up to 90 days for employer-initiated terminations based on service length. No notice required during probation.

What is the personal income tax rate in Hungary?

Flat rate of 15% on all income, plus ~3.5% social contributions, totaling ~18.5% employee tax burden.

         

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