Serving as a bridge between the east and west, Hungary is ideally positioned for trade across Europe. It is an EU member state already favoured by global companies like Audi and BMW, and it is easy to see why. With a highly skilled workforce and booming IT, automobile, and food industries, Hungary serves as a strategic location for many foreign-owned businesses.
In this article, Leinonen Hungary explains the latest essentials on payroll in Hungary for foreign-owned businesses, from tax and employee benefits to minimum wage and overtime.
Payroll Taxes in Hungary
Payroll taxes are a vital component of Hungary’s taxation system, helping fund social benefits like healthcare, pensions, and unemployment insurance. They also support important government programs like vocational training and development schemes.
PIT and Social Insurance Rates for Employees in Hungary
Personal income tax (PIT) in Hungary is set at a flat rate of 15%, and social insurance contribution is 18.5% for employees. These taxes are calculated based on an employee’s gross salary (including all additional pay benefits). In Hungary, it is the employer’s responsibility to deduct and pay PIT and social insurance contributions on behalf of their employees.
Social Insurance Rates for Employers in Hungary
Employers must also pay a social contribution tax equivalent to 13% of their employee’s gross salary (and other elements of their payroll). This tax paid by the employer is for the purpose of a pension fund, and no payment from the employee is required.
What PIT Discounts are Available for Employees in Hungary?
Certain groups of employees can access PIT discounts in Hungary.
Groups eligible for discounts include:
- Newlywed couples
- Families
- Employees below the age of 25
- Mothers below the age of 30
- Disabled employees
Employers may apply these discounts in monthly payroll calculations (if proper declarations are received). Alternatively, employees can claim them in their annual tax return.
2025 Changes to tax Benefits in Hungary for Third-Country Nationals
Since 1 January, 2025, the three most widely claimed tax benefits can no longer be applied to the salaries of third-country nationals working in Hungary (EEA, Serbian and Ukrainian employees can still access these tax benefits).
The tax benefits subject to this change are:
- Tax benefit for under 25s (no PIT)
- Tax benefit for newlywed couples (tax base decrease)
- Family tax benefit (tax base decrease based on number of children)
While these changes will not affect costs for your foreign-owned business in Hungary, they may affect the take home pay of third-country national employees.
Taxation of Employee Benefits in Hungary
Most employee benefits in Hungary are taxable. In fact, benefits are taxed as if their value were given as net salary. Considering the number of taxes and contributions payable, these benefits carry a tax burden of around 70% in total, but a few employee benefits do receive more favourable treatment.
SZÉP Recreational Card
For example, the SZÉP Recreational Card is a popular employee benefit in Hungary. Introduced in 2011, this fringe benefit aims to boost domestic industries while also providing preferential tax options to employees and employers. Tax paid by employers on SZÉP Card benefits is only 28%, as opposed to 46.5% on net salary of the same value.
The SZÉP Card works like a normal bank card, but can only be used for:6
- Hot meals
- Holiday accommodation
- Cultural activities
- Sports related services
- Home renovation
Limits on the SZÉP Recreational Card
Employers can deposit up to HUF 570,000 per year onto an employee’s SZÉP Card (HUF 450,000 in the main pocket, and a further HUF 120,000 in the sport pocket). Anything up to this amount will be taxed at the 28% rate. Anything above this is taxed at 33%.
Other Fringe Benefits
As most benefits are taxed as net salary, many employers in Hungary provide a range of fringe benefits based on what they believe their employers would find most useful.
0% tax rate fringe benefits include:
- Tickets to cultural and sports events
- Children’s daycare
- Zoo entrance tickets
- Wine as a gift (if purchased from a Hungarian winery)
- Commute expenses
Salary and Overtime Work in Hungary
Minimum Salary
Employees in Hungary typically receive a monthly fixed salary that is defined in their work contract. On top of this, they may receive extras like overtime pay or night shift and Sunday allowances.
In Hungary, there are two categories of minimum remuneration. “Minimum wage” is the absolute minimum that must be paid in any kind of job. As of 2025, this was HUF 290,800. However, if a job requires any qualification (even if only a driving license or language skills) then the “guaranteed minimum salary” applies. In 2025, guaranteed minimum salary for full-time jobs in Hungary is HUF 348,000.
Overtime and Work on Public Holidays
Overtime regulations in Hungary stipulate that any additional hours worked beyond regular working hours must be compensated accordingly. Overtime on a regular workday must be paid at the actual hourly salary plus a 50% overtime allowance. If overtime is performed on a Sunday or public holiday, this increases to 100% (except in certain industries where working on public holidays is common practice).
Contact Leinonen for Support With Payroll in Hungary
Leinonen Hungary has been supporting foreign-owned businesses with tax, accounting, and payroll in Hungary for more than 14 years. Serving 70+ clients and producing 30+ financial statements each year, our experts are ready and waiting to support you and your foreign-owned business in Hungary.
Get in touch to speak to one of our knowledgeable consultants about payroll in Hungary today.
