Tax Guide for Hungary (PIT + Corporate + Social Contributions)

Hungary runs one of the simplest and lowest tax systems in the European Union, and that simplicity is a real advantage for foreign employers. Personal income tax is a flat 15%. Corporate income tax is a flat 9%, the lowest in the EU. The employer social contribution tax is 13% of gross salary. There are no progressive brackets to model and no surprises in the headline rates. The complexity that does exist sits in the contribution thresholds and the unusually generous family allowances, both of which move year to year.

This guide sets out the Hungarian tax position for 2026 from an employer’s point of view. It covers what you withhold, what you pay on top, and how the system shapes employee net pay. For how the employment relationship itself works, see our guide to hiring in Hungary with an Employer of Record.

Hungary taxes personal income at a flat 15%, regardless of how much the employee earns. The rate has applied since 2011 and covers most income types, including employment income, with no brackets and no top rate. For a foreign employer used to progressive systems, this makes employee net pay easy to predict before allowances.

Allowances are where Hungarian personal income tax becomes distinctive. The government has built one of the most generous family tax policies in Europe, and these allowances reduce the taxable base rather than the headline rate.

The family tax allowance reduces taxable income based on the number of dependent children. In 2026 the monthly allowance is 133,340 forint for one child, 266,660 forint for two children, and 440,000 forint for three or more children, with the saving worth 15% of the allowance amount. The allowance can be split between spouses.

Younger workers and mothers receive further relief. Employees under 25 are exempt from personal income tax up to the gross national average wage. Mothers under 30 receive a comparable exemption, and from 2026 the under-30 mothers’ benefit applies to the full amount of qualifying income with no fixed monthly cap. Mothers raising four or more children qualify for a lifetime personal income tax exemption under the NÉTAK scheme, and the government has extended full lifetime exemption to mothers of two and three children on a phased basis.

These allowances change the take-home figure considerably for eligible employees, even though the employer cost is unaffected. They are claimed through the employer via monthly declarations or on the annual return.

Social contributions split between the employee and the employer, and both are administered through the tax authority.

The employee pays an 18.5% social security contribution, withheld from gross salary alongside the 15% income tax. This funds pension, health, and labour market cover. Combined with income tax, the employee bears 33.5% in deductions from gross before any allowances are applied.

The employer pays a 13% social contribution tax, known as the szocho, on top of the gross salary. This is the main employer cost beyond the salary itself, and at 13% it is well below the equivalent rates in Western Europe. For 2026, the base used to calculate the minimum contribution was reduced from 112.5% to 100% of the relevant figure, which slightly lowers the effective burden. Taken together, the combined employee and employer burden on a salary is roughly 46.5%, after which net pay for a typical employee works out at around 58 to 59% of total employer cost.

The employer remits both the withheld employee contributions and the employer szocho to the National Tax and Customs Administration, NAV, by the 12th of the month following the work. Our guide to payroll taxes in Hungary sets out the filing detail and the treatment of specific benefits.

The table below sets out the core 2026 rates for budgeting a Hungarian hire. Allowances can reduce the employee’s effective income tax considerably, but they do not change the employer cost.

To model a specific salary and see employer cost against employee net pay, use the Boundless cost calculator for Hungary.

Hungary charges a flat 9% corporate income tax on taxable profit, the lowest rate in the European Union and unchanged since 2017. There are no progressive brackets, and the rate applies uniformly regardless of company size or turnover.

Two additional charges sit alongside it. A local business tax, the HIPA, is levied by municipalities at up to 2% on adjusted net sales revenue rather than on profit, and most companies in Budapest and major cities pay the full 2%. A small innovation contribution of 0.3% applies on the same base for larger companies. Corporate tax returns are filed by 31 May following the tax year.

Corporate tax is relevant to a foreign company only if it establishes its own taxable presence in Hungary. If you employ through an Employer of Record, the provider is the legal employer and you do not create a corporate tax footprint simply by having a worker there, which is one of the practical attractions of the model.

Hungary’s tax position is a genuine draw for foreign employers. The flat 15% income tax and 13% employer contribution make total employment cost low and predictable by EU standards, and the 9% corporate rate makes the country attractive for companies that do choose to establish there. The trade-off is a high 27% VAT and a tax code that rewards careful handling of allowances and thresholds.

For most companies hiring a handful of people, the cleanest route is to employ through an Employer of Record, which applies the correct withholdings and filings without you needing to register for Hungarian corporate tax or master the allowance rules. For the wider employment picture, see our guide to working hours, leave and employment law in Hungary.