How to hire employees in Hungary with an Employer of Record

Hungary sets a specific financial and corporate bar for any provider that employs a worker and assigns them to a client: a HUF 15 million cash deposit, a Hungarian limited-liability company, and entry on a public register. An employment contract signed by an entity outside that register is invalid, which makes provider due diligence a legal requirement rather than a commercial formality.

While many global employers use Employer of Record arrangements to engage local talent, EOR is not a cleanly recognised statutory model in Hungary. Hungarian law routes employ-and-assign arrangements through the temporary agency work regime (munkaerő-kölcsönzés), which restricts who may act as a lending agency and caps how long an assignment can run. Companies can instead use a workforce management platform such as Boundless, a Payoneer company, to engage and pay talent in Hungary compliantly. Boundless operates through licensed local entities and assists with onboarding, payroll, benefits administration, and compliance support, so companies can engage team members in Hungary without setting up their own entity.

Temporary agency work sits in Chapter XVI of Act I of 2012, the Labour Code (Munka Törvénykönyve, commonly shortened to Mt.). Under Section 214, the arrangement exists where an employee has an employment relationship with a lending agency (kölcsönbeadó) that hires the employee out to a user enterprise (kölcsönvevő) for remunerated temporary work, with employer’s rights exercised jointly between the two. The maximum assignment duration is five years, counting any re-assignment within six months of a prior termination regardless of whether the same or a different agency arranged it.

Section 215 of the Labour Code restricts who may lawfully act as an agency to:

• A company established in an EEA member state and authorised under its national law, or
• A Hungarian business association whose members have limited liability, provided it satisfies registration requirements and appears on the government employment register.

The consequence of falling outside the register is severe: exclusion triggers invalidity of the underlying employment contracts. Registration is not an administrative formality that can be corrected later.

The requirements sit in Government Decree 118/2001. A provider must be a Hungarian Kft. or Rt. registered in Hungary and listed by the competent government office, hold at least one qualified HR staff member, and maintain appropriate office premises. Section 6(2)(b) of the decree sets the financial deposit for leasing activity at HUF 15 million, held as an unlimited-duration segregated cash deposit with a financial institution and dedicated solely to satisfying liability claims arising from the leasing activity. Where a deposit is drawn down to pay a claim, it must be replenished within 30 days.

That figure has moved upward over time: from HUF 2 million before December 2016, to HUF 5 million, then to HUF 10 million, and finally to HUF 15 million under Government Decree 273/2018 (XII.20.), which took effect on 1 January 2019 and remains in force. Private employment mediation, as distinct from leasing, carries lower deposits of HUF 500,000 and HUF 1 million depending on whether placement is directed inside or outside the EEA.

Two structures exist in the market: providers that own a Hungarian entity outright, and providers that route employment through a vetted local licensed partner. Both can be compliant, provided the entity in the chain holds the Section 215 registration and the Decree 118/2001 deposit. The question worth asking is which entity signs the contract, not which brand name appears on the proposal.

1. Establish which Hungarian entity signs the employment contract: Confirm whether it is a Kft. or Rt., whether it appears on the public agency register, and whether the deposit condition is satisfied.
2. Determine whether the role requires the higher wage floor: The guaranteed wage minimum applies where the role formally requires at least secondary education or vocational qualification, and both the qualification requirement and the corresponding job requirement must be satisfied together.
3. Issue the employment contract in writing before work starts: Section 44 requires written form, though a failure of written form can be invoked as invalid by the employee alone, and within thirty days of starting work.
4. Agree the basic salary and job title explicitly: Section 45(1) sets these two as the mandatory minimum content of the contract; other terms default to statutory positions where not agreed.
5. Deliver the written employment information within seven days: The 2023 amendment shortened this deadline from 15 days and expanded the mandatory content substantially.
6. Set any probationary period at three months or less: Section 45(5) permits up to three months, extendable once where the initial period was shorter but never beyond three months in total, or six months where a collective agreement provides for it.
7. Set up payroll to withhold and remit the statutory contributions: Personal income tax and the employee social security contribution come out of gross pay, with the employer social contribution tax paid on top of gross.

The written-information duty under Section 46 expanded considerably when Act LXXIV of 2022 took effect on 1 January 2023, transposing the EU directives on transparent and predictable working conditions and on work-life balance. Hungary transposed more than five months after the deadline, and the European Commission had issued a formal notice of infringement in September 2022.

The information an employer must now provide includes:

• Holder of employer’s rights
• Start date and duration of the employment relationship
• Place of work
• Daily working-time parameters and maximum overtime duration
• Wage accounting method, payment frequency, and payment date
• Remuneration beyond basic salary
• Leave entitlement and how it is calculated
• Termination rules and notice periods
• The employer’s training policy
• The authority receiving employment-related public charges
• Whether a collective agreement applies

Employees hired before 2023 could request the expanded information in writing until 31 March 2023.

Fixed-term employment, including any extension and any renewal within six months of a prior contract’s termination, cannot exceed five years in total. Renewing a fixed term beyond a single contract additionally requires a legitimate employer economic interest that does not impair the employee’s legitimate interest. Where a work permit governs the term, as for some non-EU nationals, the permit duration applies instead.

Notice runs on a base of 30 days under Sections 68 and 69 of the Labour Code. Where the employer terminates, the base extends with the employee’s continuous service:

Employer termination by ordinary notice must be justified, and the reason must relate to the employee’s conduct in the employment relationship, the employee’s ability to do the work, or the employer’s own operations (such as redundancy or reorganisation). During a valid probationary period the position is different: either party may terminate with immediate effect, without notice and without giving a reason.

Severance pay (végkielégítés) under Section 77 starts after three years of continuous service and is calculated on absentee pay:

The amount increases by a further one to three months where the employee is dismissed within five years of reaching statutory retirement age.

Dismissal by ordinary notice is blocked during pregnancy, maternity leave, unpaid leave taken to care for a child, and voluntary military service.

Net pay with no allowances works out at roughly HUF 214,700 a month at the standard floor and HUF 248,178 at the guaranteed minimum. Our Hungarian wage guide tracks how the two floors apply by role.

Combined, employees carry 33.5% and employers add 13%, so total employer cost runs to approximately gross multiplied by 1.13, with net take-home around 66.5% of gross. The 13% employer rate has been in effect since 2022 and remains the rate for 2026.

One rule catches employers running part-time roles. Where an employee’s actual earnings fall below 30% of the minimum wage (HUF 96,840 a month in 2026), social security contributions are payable on that 30% floor rather than on the lower actual salary. This applies to part-time employment generally, not just to agency arrangements, and it can make a low-hours Hungarian placement cost more than the headline salary suggests.

The standard working week in Hungary is 40 hours across an 8-hour day.

The December 2018 amendment to the Labour Code (effective 1 January 2019) changed the overtime ceiling structure without altering daily or weekly maximums or rest requirements. Here is how the overtime limits work:

• Employer-ordered overtime: Up to 250 hours a year, or 300 where a collective agreement allows it
• Voluntary overtime (with a separate written agreement): A further 150 hours, or 100 where the base is already 300
• Total maximum: 400 hours a year. The upper 150-hour band requires a written voluntary agreement that the employee enters freely and can end at year close

Employees can terminate a voluntary-overtime agreement at year end without that constituting grounds for dismissal.

The working-time banking period normally runs four to six months. A collective agreement can extend it to a maximum of 36 months for objective, technical, or work-organisation reasons.

Statutory annual leave starts at 20 working days and rises in age-based steps to a cap of 30 working days under Section 117 of the consolidated Labour Code:

Additional leave applies for parents: two days for one child, four for two, and seven for three or more, plus two per child with a disability.

A point that causes payroll errors more often than the table itself: Section 117(2) specifies that the employee becomes entitled to the longer period for the first time in the year they reach the relevant age, so the increment applies for the whole calendar year rather than from the birthday. Leave-accrual systems configured on a birthday trigger will under-accrue.

Employer-paid sick leave (betegszabadság) runs to 15 working days per calendar year under Section 126(1), pro-rated for mid-year hires, compensated at 70% of absentee pay under Section 146(4). Once those days are exhausted the employee moves to state sickness benefit (táppénz), paid by the social insurance fund at 50% or 60% of average daily pay depending on the length of continuous insurance, for a maximum of one year.

• Contracting with an entity that is not on the register: Exclusion from the agency register invalidates the underlying employment contracts. This is the failure mode that cannot be fixed after the fact, and it is verifiable in advance through the public register.
• Applying the standard wage floor to a qualified role: The guaranteed wage minimum of HUF 373,200 applies where the role formally requires secondary education or vocational qualification. Paying the HUF 322,800 standard floor for such a role underpays against the statutory minimum by roughly 16%.
• Assuming an assignment can run past five years: The five-year cap counts re-assignment within six months of a prior termination, and it counts regardless of whether a different agency arranges the second placement. Rotating providers does not reset the clock.
• Building leave accrual on 20 days: Age-based increments take entitlement to 30 working days, and Section 117(2) applies them for the whole calendar year in which the employee reaches the age, not from the birthday. Systems configured on birthday triggers will under-accrue.
• Treating the 400-hour overtime figure as a default: The additional hours above 250 depend on a separate written voluntary agreement that the employee enters freely and can terminate at year end. Treating 400 hours as a standing entitlement misreads the structure.