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Undoubtedly, payroll is a critical process for any organization. The pay cycle in Hungary refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.

Monthly payrolls are the norm in Hungary. It is customary to pay for work completed between the first and last day of the month on that day, but it must also be reimbursed by the 10th of the following month.

A 13th-month pay is not required in Hungary. However, an employer has the discretion to award bonuses.

Effective December 1, 2023 onwards:

• Basic mandatory minimum wage: 266,800 Hungarian forints (HUF) per month
• Guaranteed minimum wage: 326,000 HUF per month 

Every additional hour of work is compensated as overtime and is subject to the terms of the employment contract and collective bargaining agreements. There is a cap of 72 hours per week for requests for overtime or holiday work, and there are various maximum working hours for children.

More than 40 hours a week of overtime work earns the employee 150.00 percent of their base pay. Weekend and holiday overtime is compensated at a rate equal to 200.00% of the employee's base pay.

Under the Equal Treatment Act, the principle of equal treatment must be strictly observed already in the hiring process before creating the employment relationship (in a job advertisement, during a job interview, etc).

Laws or collective bargaining agreements may require positive action to eliminate the inequality in opportunities of a specific group of employees. However, such positive action must not violate any fundamental right, grant any unconditional advantage, or exclude the assessment of individual aspects. This means that a person with protected characteristics cannot be automatically given priority over the others if another applicant not having a protected characteristic proves to be more suitable for the job based on objective eligibility criteria.

Employees should provide the following documents:

1. ID card, address card (HR has to check the validity)
2. Passport, residence permit (in case of foreigners) (HR has to check the validity)
3. Bank account number
4. Declaration about extra vacation days after children under the age of 16
5. Declaration about altered working ability
6. Declaration about tax allowance(s)
7. Degree, certificate of the highest education (HR has to check it)
8. CFR (tax residency certificate) (in case of foreigners)
9. Leaving papers from the previous employer, including:
   • Employer's certificate of termination of employment,
   • Tb booklet (Certificate of the insurance relationship and health insurance benefits),
   • Proof of income to determine health insurance cash benefits,
   • Certification form for determining the jobseeker's allowance and the jobseeker's allowance,
   • Data sheet on income from the employer (partnership), deduction of tax and advance tax, amount of the family allowance taken into account upon the termination of the employment relationship
   • Data sheet on maintenance obligations determined on the basis of a court order.
   • Certificate of contributions deducted and paid in the relevant year

In Hungary, a probationary period cannot be longer than three months. If the agreed-upon probationary period is less than three months, the parties may extend it once, but only by a total of three months.

The parties may outline in the employment agreement a probationary period of a maximum of three months starting from the beginning of the employment. If the parties agree on a shorter probationary period, they may once agree on extending it up to the three-month maximum. Collective bargaining agreements may provide for the possibility of a probationary period of a maximum of six months.

The following public holidays are observed in Hungary:

• January 1: New Year's Day
• March 15: 1848 Revolution Memorial Day
• April 7: Good Friday
• April 10: Easter Monday
• May 1: Labor Day / May Day 
• May 29: Whit Monday:
• August 20: Hungary's national day
• October 23: 1956 Revolution Memorial Day
• November 1: All Saint Day
• December 25: Christmas day
• December 26: Day after Christmas

Employees are entitled to 15 days of employer-paid sick leave. Using the average wage for the previous six months as the base, they are paid 70.00 percent of their salary rate.

The employee is entitled to additional time off for a maximum of one year if the illness persists after the first 15 days (or in the event of a work accident for an unlimited period). The National Health Insurance Fund and the employer each contribute one-third and two-thirds, respectively, to the sick payment.

Although they can extend their leave by up to three years and still receive maternity benefits, women have 24 weeks of maternity leave. Mothers are entitled to the Pregnancy and Confinement Benefit (CSED) for the first six months at a rate of seventy percent of their pay. Mothers are entitled to a Kid Care Fee (Gyermekgondozási Dj - GYED) for the subsequent 18 months, up until the child turns 2, at a rate of 70.00 percent of their earnings, up to a maximum of double the minimum wage.

Parents or grandparents who are caring for children under the age of three are also eligible for a benefit known as Child Home Care Allowance (Gyermekgondozási segély, or GYES). The National Health Insurance Fund of Hungary pays the benefits (NEAK).

A father has the right to five paid paternity leave days, or seven if there are multiple or a complex birth, which must be used within two months of the baby's birth.

After the maternity leave period, one parent may take parental leave up until the child turns two years old. This leave is compensated at a rate of seventy percent, but the maximum payment is double the daily minimum salary. Employees with children under the age of 16 are entitled to the following additional vacation time:

• Two days of work for one child
• Four days of work for two kids
• Three children and seven working days

• Bereavement Leave - Upon the death of a close relative, for at least two paid working days per occurrence.
• Additional Vacation Leave - Employees shall be entitled to extra vacation time as follows:

one working day over the age of twenty-five;

two working days over the age of twenty-eight;

three working days over the age of thirty-one;

four working days over the age of thirty-three;

five working days over the age of thirty-five;

six working days over the age of thirty-seven;

seven working days over the age of thirty-nine;

eight working days over the age of forty-one;

nine working days over the age of forty-three;

ten working days over the age of forty-five.

Employees shall be first entitled to extra vacation time in the year when reaching the age & specified in Subsection (1) above.

Employees shall be entitled to extra vacation time as follows:

two working days for one child;

four working days for two children;

a total of seven working days for more than two children under sixteen years of age

The extra vacation time referred to in Subsection (3) shall be increased for children with disabilities by two working days per child.

For the purposes of entitlement to extra vacation time, a child shall first be taken into consideration in the year of his birth and for the last time in the year in which he/she reaches the age of sixteen.

Upon the birth of his child, a father shall be entitled to five days of extra vacation time, or seven working days in the case of twins, until the end of the second month from the date of birth.

• Adoption Leave - Maternity leave shall also be provided to a woman who has been given custody of a child for the purpose of adoption. The duration is 24 weeks of unpaid leave.
• Unpaid Leave - An employee is entitled to unpaid leave: For any extended (more than 30 days) nursing or home care of a close relative up to a maximum of two years provided the employee personally provides the care, and for the duration of actual reserve military service.

An employment contract may end up terminated upon wrongdoing on business or personal wrongdoings of employees. Terminations must be in written form. When misconduct is the cause, a warning must be given, and the employee is given the opportunity to defend their actions. The employee must receive the final wage payment no later than the fifth working day following the termination of the employment relationship once the employment relationship has been terminated by notice.

In the case of termination by notice, a certain notice period must be given before dismissal. Such a notice period is 30 days, which increases based on the time spent in employment. The notice period starts on the day after the written notice has been handed to the employee. The employer may (to some extent, must) release the employee from work duty for the term of the notice period (in which case, the employee is entitled to absentee pay). However, even in that case, there must be a notice period, and the employer may not replace the notice period with payment.

If an employer ends an employee's employment for operational reasons, the employee is entitled to a severance payout. Depending on the clause in the employment contract, the amount of severance compensation ranges from a minimum of one month's income to a maximum of six months. The employee is entitled to severance pay if the employment relationship is terminated:

• by the employer;

• due to the dissolution of the employer without succession; or

• by the employee if the termination is validly connected with the transfer of undertaking.

Even in these cases, the employee is not entitled to severance pay if:

• he or she is recognized as a pensioner at the time the termination notice is delivered or at the time the employer is terminated without succession; or
• he or she is dismissed for reasons in connection with his or her behavior concerning the employment relationship or on grounds other than health reasons.

The severance pay is one month’s absentee pay if the employee has spent at least three years in employment with the specific employer. This amount gradually increases based on the time spent in employment. The amount of the severance pay is increased by one to three months of absentee pay if the employment relationship is terminated within the five-year period before the date when the employee reaches the pensionable age limit.

For a foreigner to work in Hungary, one of the following work permits is mandatory:

1. Foreign nationals who wish to work in Hungary for no more than 90 days during a 180-day period must get an individual work permit.
2. Foreign nationals who desire to work in Hungary for more than 90 days within 180 days must obtain a joint work permit.

1. Working Schengen Visa - This visa category is for temporary employment.
2. Schengen Business Visa - Foreign individuals who are not citizens of the EEA and who desire to temporarily enter the Schengen region may apply for a Schengen business visa. Both single and multiple admissions are permitted with this visa. Holders are permitted to stay for 90 days within a six-month period.
3. Seasonal Employment Visa - This visa is available to foreign nationals who want to work in fishing, farming, or animal care. This permits the candidate to work for a maximum of 180 days.
4. EU Blue Card - Highly talented workers from outside the EU residing in an EU member state may apply for this card as long as they have a valid residency permit. To qualify for this card, the foreign national must demonstrate that they have been residing legally in a member state for 18 months and meet the minimum salary threshold of 598,950 HUF gross per month. Three years is the standard period of validity for a Blue Card.

A residence permit is good for three years in total. While a visa may be valid for one year, a work permit is only good for two years.

As a general rule, background checks are prohibited (except social media checks, which are acceptable under certain conditions). Employers may only ask the applicant to share his or her personal data if they are absolutely necessary for the position.