Employer of Record (EOR) in Hungary: Ultimate 2025 Guide
Introduction to EOR in Hungary
Managing labor laws, payroll, and ensuring compliance with global employment standards in Hungary can be a complex and resource-intensive process. This is where Employer of Record (EOR) services can make a significant impact.
In this guide, we’ll break down the essentials of working with an Employer of Record (EOR) as part of your broader global hiring strategy in Hungary. EOR services allow you to hire employees across different countries, including Hungary, without the need for setting up a local entity, ensuring smooth workforce management and legal compliance.
Hungary at a glance - EOR & Hiring
Capital
Budapest
Population
9.64 million
Currency
Forint (HUF)
Language
Hungarian
Ease of doing business index
52nd place
GDP per Capita
$23,319 USD (2024)
Average workweek
40 hours
Payroll Cycle
Monthly
Tax due date
20 May
Corporate tax
9%
Employer contributions
13% to 15.5% of salary
Average employee tax rate
33.5%.
What is an Employer of Record
You might already be familiar with the concept of an EOR, and if that’s the case, feel free to skip this section. But if not, it’s definitely worth understanding!
An Employer of Record (EOR) serves as a trusted partner for businesses that need to hire internationally without the need to establish a local entity. Essentially, the EOR becomes the legal employer for your workforce, handling all the administrative and legal complexities associated with global employment. The major advantage? You can hire talent in a foreign country without setting up a local business structure.
For a deeper dive into what an Employer of Record is, check out our full guide here.
Pros and Cons of EORs vs. setting up a legal entity
As with anything, both options come with advantages and disadvantages. Here, we highlight the key benefits and drawbacks of using an Employer of Record (EOR) versus setting up a legal entity, allowing you to see the differences clearly and make an informed decision.
| Factor | Employer of Record (EOR) | Legal Entity Setup |
|---|---|---|
| Setup Time | ✓ Quick setup in days. | ✘ Takes months to establish. |
| Initial Cost | ✓ Low upfront costs. | ✘ High initial investment required. |
| Ongoing Cost | ✓ Moderate (EOR fees + employee costs). | ✘ Variable, often higher ongoing costs (operational, compliance). |
| Complexity | ✓ Low, as EOR manages administrative tasks. | ✘ Requires local expertise and moderate administrative work. |
| Compliance Management | ✓ Handled by EOR (payroll, taxes, social security). | ✘ Responsibility falls on the company, needing legal expertise. |
| Language Barrier | ✓ Managed by EOR (local language issues handled). | ✘ Less of an issue in many countries, but may require local support. |
| Scalability | ✓ Highly flexible, easy to add or remove employees. | ✘ Less flexible, requires legal procedures for changes. |
| Local Expertise Required | ✓ Minimal, EOR provides necessary guidance. | ✘ Extensive local expertise and advisors required. |
| Risk | ✓ Lower, EOR assumes employer liabilities. | ✘ Higher, company bears legal and financial risks. |
Why Use an Employer of Record in Hungary?
Expanding your business into Hungary is a strategic move. However, understanding Hungarian labor laws for foreign companies is crucial to avoid compliance risks. Hungary’s highly skilled workforce and competitive industries like automotive, IT, and manufacturing make it an attractive market, but navigating its legal landscape demands careful attention.
The complexities of dealing with Hungarian labor laws, tax regulations, and payroll systems can make direct employment challenging. This is where a trusted Employer of Record (EOR) becomes essential.
Here’s why EOR services in Hungary can make a significant difference for your business:
Simplified Compliance
Dealing with employment regulations in Hungary can be overwhelming, especially for foreign companies unfamiliar with the local landscape. Hungary’s strict labor laws, tax obligations, and social security requirements make employment compliance a lengthy and difficult process.
An EOR will ensure your business follows all Hungarian employment laws, covering everything from tax filings to payroll and contracts. By taking care of employment compliance in Hungary, an EOR lets you concentrate on your business operations while they handle the legal aspects.
Cost-Effective Expansion
Establishing a legal entity in Hungary is often costly and time-consuming. An EOR lets you hire employees in Hungary without the need to set up a local entity, which reduces costs and speeds up your market entry. It’s a practical and cost-effective way to expand quickly.
Access to Hungarian Talent
Hungary’s educated, multilingual workforce makes it an ideal location for finding top talent. With an EOR, you can access this talent pool without the need to establish a full local entity. The EOR handles recruitment, onboarding, and employee management, freeing you to focus on business growth.
Administrative Relief
Handling international payroll, taxes, and employee benefits in a foreign market like Hungary can be complicated. An EOR eases the burden by managing these administrative tasks while ensuring you comply with local laws.
Risk Management
A major advantage of using an EOR in Hungary is the ability to reduce risks. Hungary’s employment laws can be strict, and non-compliance could lead to serious legal issues. An EOR takes on the legal responsibility for employing your team, helping you avoid labor disputes and financial penalties.
Visa and Work Permit Assistance
Hiring foreign employees in Hungary often comes with complex visa and work permit requirements. EOR services streamline this process by managing all aspects of work permit and visa applications, ensuring that your employees meet local immigration laws and can work legally and efficiently. This allows your team to start working quickly and in compliance with Hungarian regulations, without burdening your business with administrative tasks.
Now that we’ve discussed the key benefits of using an EOR in Hungary, let’s explore the top EOR providers in the country to help you make the best choice!
The best EOR providers For Hungary
Many trusted Employer of Record (EOR) providers operate in Hungary, offering seamless workforce management and ensuring compliance with Hungary’s labor regulations. Here is a selection of the top ranked EOR services in Hungary.
- Multiplier: Renowned for its extensive global employment services, providing tailored solutions for businesses expanding internationally.
- Deel: Features a highly intuitive platform that simplifies the process of hiring, onboarding, and managing international teams across various regions.
- Oyster HR: Delivers a fully automated global employment platform, enhanced by robust local expertise to ensure compliance and smooth operations.
- TILEA Group: A leading Employer of Record (EOR) provider in Hungary, TILEA Group helps international businesses hire employees locally without setting up a legal entity. The company offers end-to-end HR, payroll, and compliance management solutions, ensuring full adherence to Hungarian labor laws and tax regulations while enabling smooth and cost-effective market entry.
Lano: Known for its scalable global employment solutions, Lano offers businesses an all-in-one platform for managing payroll, compliance, and workforce expansion across multiple countries.
Horizons: Provides expert global hiring and EOR services, focusing on simplifying international expansion while ensuring compliance with local labor laws and regulations in each market.
- Infotree Global: Offers comprehensive global employment solutions, providing businesses with efficient EOR services that ensure compliance and seamless workforce management across multiple regions.
- Papaya: Offers standard payroll and workforce management services, with automated solutions that help businesses handle basic compliance needs across a limited number of countries.
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How Does EOR Service Work in Hungary?
Using an Employer of Record (EOR) service in Hungary makes hiring and managing employees simple without the need for a local entity or an internal HR team. Here’s how it works:
Get in touch with an Employer of Record Company
First and foremost, you’ll need to reach out to an EOR provider. It’s always a good idea to compare different options. Above, we’ve highlighted some of the top EOR providers, both globally and in Hungary. Visit their website, fill out their contact form, and they’ll get back to you to schedule a consultation.
Consultation and Contracts
The EOR will begin with a discussion to understand your specific needs and will then draft employment contracts that adhere to Hungarian regulations.
Onboarding and HR Support
The EOR manages everything from gathering necessary documentation to setting up payroll and providing HR outsourcing in Hungary, ensuring ongoing support for employee relations and smooth HR operations.
Payroll, Benefits, and Compliance
Your EOR provider handles payroll, benefits, and guarantees full compliance with Hungarian tax laws and employment regulations, freeing you from having to manage these complexities.
Termination Handling
If necessary, the EOR oversees the termination process, ensuring everything is done legally and fairly. Ending an employment contract can be a tricky and costly process if not managed correctly. Having an EOR ensures all legal aspects are covered, giving you peace of mind.
Difference Between EOR and PEO in Hungary
The EOR is the Legal Employer
In Hungary, the EOR acts as the official employer, handling all legal and administrative tasks like payroll, taxes, and ensuring compliance with Hungarian labor laws. With a PEO, the client company still remains the legal employer, and responsibilities such as payroll and benefits management are shared between the business and the PEO provider.
To use a PEO you Need to Have an Entity in Hungary
Typically, a PEO requires the client company to have a legal entity established within the country, while an EOR allows businesses to hire employees in Hungary even if they don’t have a local presence.
Learn more about the Difference between PEO and EOR
For more details about the differences between EOR and PEO, check out our guide below. It offers valuable insights to help you decide which option best fits your company’s global hiring strategy. Keep in mind, a PEO will only work if you have an entity in Hungary!
Understanding EOR Pricing Models
When considering a third-party employment provider, such as an EOR service, understanding the various pricing models is crucial. Each of them has its benefits and drawbacks. Here’s a concise overview of common EOR pricing models:
Charges a percentage of the employee’s salary.
Pros: Transparent, aligns with employee compensation.
Cons: Costs can rise with higher salaries.
Percentage-Based Fees are most common with small to medium EORs and Employers of Record that take a more personal and custom approach. Percentage-Based Fees is one of the most common pricing models.
Fixed monthly fee per employee.
Pros: Predictable costs, easier budgeting.
Cons: May be less cost-effective for lower-salary employees
Flat Monthly Fees are common with large global EORs.
These Employers of Record often are well established players on the market, such as Multiplier.
Flat fee model is one of the most common pricing models along with Percentage-Based Fees.
Fees based on salary tiers or number of employees.
Pros: Flexible, potentially cost-effective.
Cons: Can be complex to predict exact costs.
Often paired with one of the other pricing models, for example the percentage-based fee becomes lower the more employees you onboard. However it can be found as a stand-alone pricing model, but not as comon.
Tailored pricing based on specific needs.
Pros: Customizable, tailored to requirements.
Cons: Requires detailed discussions, less initial transparency.
Custom pricing is very rare among the biggest players on the market. More knowledge about EOR is often needed to get a good deal working with a custom model.
Charges based on actual usage.
Pros: Pay for what you use, flexible.
Cons: Harder to budget long-term.
Pay-As-You-Go is probably the rarest pricing model and is more often seen in variants of Employer of Record solutions. You are not very likley to encounter this type of pricing structure.
Doing Business in Hungary - A Detailed Overview
Hungary, positioned at the crossroads of Central Europe, is an ideal location for businesses seeking to expand into the EU and beyond. With a strong emphasis on industries like automotive, IT, manufacturing, and logistics, Hungary provides a dynamic business environment, supported by a skilled workforce, improving infrastructure, and attractive tax benefits for companies.
Key Economic Overview
Hungary’s GDP is forecast to reach $192 billion in 2024, showcasing steady economic recovery and growth, particularly in key sectors like automotive, IT, and logistics. The country’s inflation rate of around 4% reflects the adjustments being made following global economic challenges. As an EU member, Hungary enjoys access to a large single market and advantageous trade agreements, making it a favorable option for international business expansion.
Benefits of Doing Business in Hungary
Hungary’s corporate tax rate of 9%, one of the lowest in the EU, is highly competitive. However, understanding employment compliance in Hungary is vital for companies looking to establish operations.
The country’s infrastructure, particularly its road and rail networks, is highly developed, making Hungary a major logistics hub for trade within Central Europe. Furthermore, Hungary offers various government incentives to encourage foreign investment, including tax benefits, grants, and subsidies in key sectors such as renewable energy, manufacturing, and IT. These factors make Hungary an attractive destination for businesses aiming to expand in Central and Eastern Europe.
Hungary's Workforce and Employment Landscape
Hungary has a well-educated workforce, with a large percentage of young, multilingual professionals, which simplifies managing your Hungarian workforce in industries like engineering, technology, and logistics.
The labor force is more than 4.5 million strong, providing businesses with access to a diverse talent pool. Hungary’s focus on education and vocational training ensures a highly skilled labor market, making it easier for international companies to attract and retain top talent.
Working Hours and Leave Policies
In Hungary, the standard working week is set at 40 hours over five days, with a maximum of 8 hours per day. Employees are entitled to various leave policies under local regulations, including paid annual leave and public holidays.
For instance, after one year of employment, workers typically receive 20 to 22 days of paid annual leave, with this entitlement increasing as their length of service grows. Overtime is carefully regulated and usually compensated at an increased rate, generally starting at 120% to 150% of the regular hourly wage, depending on individual agreements and circumstances.
Labor Market and Contracts
In Hungary, employment contracts must clearly define all terms, including salary, working hours, and job responsibilities. It is strongly recommended that these contracts are in writing to avoid any potential disputes, especially for part-time, fixed-term, or remote work arrangements.
Probationary periods can last up to 3 months, during which time either party can terminate the employment without any notice or severance. Once this period is over, notice periods range from 30 to 90 days, depending on the length of the employee’s service.
Payroll and Taxation in Hungary
Hungary’s tax and payroll systems are transparent and structured to ensure that both employees and employers meet social security and tax obligations, supporting a comprehensive benefits system. Hungary’s progressive taxation system is aimed at maintaining high living standards.
Employer Contributions
In Hungary, employers contribute approximately 13% to 17% of an employee’s gross salary toward social insurance and benefits. Employer contributions are crucial to covering the following areas:
- Pension Contributions: 10%
- Health and Social Insurance: 7%
- Unemployment Insurance: 1.5%
- Other Contributions: 0.5%
These contributions ensure that employees are covered under Hungary’s extensive welfare system, which includes pensions, health insurance, and unemployment benefits.
Employee Tax Obligations
Employees in Hungary are taxed on a flat rate of 15% for personal income tax. Additionally, employees contribute approximately 18.5% of their salary toward social security, health insurance, and pension contributions. These contributions ensure long-term benefits, such as healthcare access and retirement savings.
Employee Benefits in Hungary
Hungary’s legal framework ensures robust employee benefits, with a focus on social security and work-life balance. Mandatory benefits include healthcare coverage, pension plans, and unemployment benefits, all of which contribute to the overall well-being of employees.
Paid Leave and Public Holidays
Employees in Hungary are entitled to 20 to 30 days of paid annual leave, depending on their age and length of service. Hungary also observes 13 public holidays, including Christmas, Easter, and National Day celebrations. If public holidays fall on a weekend, they are typically not moved to weekdays.
Parental Leave and Childcare Support
Hungary provides strong parental leave policies, including 24 weeks of paid maternity leave for mothers, with 4 weeks before the expected birth and the remaining 20 weeks after. Fathers are entitled to 5 days of paid paternity leave (7 days in the case of twins). Parents are also eligible for additional unpaid parental leave until the child turns 3 years old.
Sick Leave
Employees in Hungary who are unable to work due to illness are entitled to up to 15 days of paid sick leave per year, with the employer covering 70% of the employee’s salary during this period. After this, the National Health Insurance Fund (NEAK) provides compensation for extended sickness, depending on the employee’s insurance history and the length of service.
Navigating the Hiring Process in Hungary
The hiring process in Hungary is generally transparent and follows structured guidelines. Employers typically use job portals, recruitment agencies, and partnerships with universities to find qualified candidates. It is crucial to ensure compliance with Hungarian labor laws throughout the hiring process.
Ensuring Compliance through EOR Services in Hungary
Hiring and managing employees in Hungary require strict adherence to local labor laws and regulations. Employer of Record (EOR) services, like those offered by companies such as Lano and Multiplier, help businesses navigate these complexities.
These EOR providers manage essential tasks such as payroll administration, contract drafting, tax filings, and ensuring full compliance with Hungarian labor laws. By handling these responsibilities, EOR services reduce legal risks and allow companies to concentrate on their core activities.
Simplifying Hungarian Work Culture and Language Barriers with EOR
EOR services in Hungary also help companies adapt to the local work culture and overcome potential language barriers. With expertise in local customs, language, and employment practices, EOR providers assist international businesses in smoothly integrating into the Hungarian market.
Total Cost of Employment in Hungary
When assessing the total employment costs in Hungary, employers must factor in salaries, taxes, social security contributions, and additional benefits. These expenses are necessary to ensure employees are adequately supported and that businesses comply with Hungary’s labor and social security laws.
Typical Employer Costs
Typical Employer Costs
Employers in Hungary should budget approximately 13% to 17% on top of an employee’s salary for mandatory social security contributions, which typically include:
- Pension contributions
- Health insurance
- Supplementary insurance
- Other social security contributions
Additionally, employers must factor in costs for paid leave, overtime, and other contractual obligations under Hungarian labor laws. This may include paid vacation days, 13th-month salary payments, and any industry-specific benefits.
Total Cost of Employment Calculator
We’ve developed a simple Total Cost of Employment calculator for Hungary. Keep in mind that this is an estimate designed to help you calculate the total employment costs in Hungary and estimate the EOR fees. We hope it gives you a clearer understanding of the expenses involved in hiring and the cost of using EOR services in Hungary.
The calculator also breaks down all the various contributions that employers make, including social security payments and taxes. It can also help you see how much an employee would receive after all taxes and deductions are applied in Hungary.
Total Cost of Employment Calculator - Hungary
Results
Gross Pay
Gross Monthly Salary: EUR
Deductions
Income Tax: EUR
Social Security Contribution: EUR
Net Salary: EUR
Employer Costs
Holidays (24 days): EUR
Sick Leave (14 days): EUR
Total Time Off Cost: EUR
Total Employer Contributions: EUR
Approx. EOR Fee: 300 EUR
Challenges of Hiring in Hungary
While Hungary presents an attractive environment for businesses looking to expand, hiring in the country brings its own set of challenges. It’s important for companies to understand these hurdles in order to build and maintain a successful workforce in Hungary.
Key Hiring Challenges
Hungary’s labor laws are tightly regulated, particularly when it comes to Hungarian employment contracts, working hours, and employee rights. Employers must adhere to clear rules on probation periods, termination procedures, notice periods, and social security contributions, all of which are covered by Hungarian labor laws for foreign businesses.
These processes are typically guided by national legislation and can involve complex requirements. Managing payroll and handling tax obligations, including mandatory employer contributions to pensions and healthcare, can be a challenge due to Hungary’s intricate tax system.
Additionally, recruitment in Hungary can be competitive, especially in industries like manufacturing, IT, and logistics. Employers often face multiple layers of compliance while trying to source the right talent in a highly skilled and diverse labor market.
Cultural Considerations
Hungarian workplace culture emphasizes a strong work-life balance and places significant importance on family and community ties. Employers must respect cultural norms around working hours, paid leave, and public holidays, as well as appreciate the importance of family-related events. Additionally, social interactions in the workplace are vital, with collaboration and relationship-building playing a crucial role in daily operations.
Benefits of Using an EOR in Hungary
Global HR services for a global workforce are vital to do business nowadays.
For businesses looking to expand into Hungary, partnering with an Employer of Record (EOR) streamlines talent acquisition and ensures compliance with local labor regulations. Here are the key benefits:
Risk Mitigation
EORs take on the legal responsibility of employing your workforce, minimizing the risk of non-compliance with Hungary’s labor laws.
Cost-Effectiveness
Using an EOR eliminates the need to set up a local entity, reducing overhead costs. They handle payroll, social security, tax contributions, and other administrative tasks, ensuring compliance while managing costs efficiently.
Fast Market Entry
An EOR allows companies to hire employees quickly without the delays associated with establishing a legal entity. They manage work permits, onboarding, and local compliance, enabling you to enter the Hungarian market swiftly and focus on growing your business.
Choosing the Right Employer of Record in Hungary
For companies expanding into Hungary, partnering with an EOR simplifies the hiring process and ensures compliance with Hungarian labor laws. Here are the key advantages:
Hungarian Labor Law Expertise
Ensure your EOR has a strong understanding of Hungarian employment laws, including tax regulations, social security, and worker protections, to avoid any compliance issues.Service Flexibility
Choose an EOR that offers a broad range of services, such as payroll, benefits administration, and contract management, customized to meet your needs.Cost Transparency
Compare pricing models to ensure the EOR’s services fit within your budget. Ensure there are no hidden costs and that pricing aligns with the services offered.Technology and Efficiency
Choose an EOR with an intuitive platform that supports automated payroll, compliance tracking, and reporting. Scalable solutions will help your business grow seamlessly.Customer Support
Evaluate the EOR’s customer support, ensuring they provide localized help in Hungary, with quick response times and support across time zones.Local Presence
Working with an EOR that has a direct presence or partnerships in Hungary provides deeper local insight and faster resolution of any local regulatory issues.
Choosing the right EOR for your business in Hungary is essential to ensure compliance, streamline operations, and support your growth plans. We already presented you with some of the best EOR providers in Hungary at the beginning of this article. They are all highly reputable. But if we were to narrow it down to the top 5, these would make the list. They are listed in order of our ranking.
Top 5 EOR Providers for Hungary
- Multiplier: Renowned for its extensive global employment services, providing tailored solutions for businesses expanding internationally.
- Deel: Features a highly intuitive platform that simplifies the process of hiring, onboarding, and managing international teams across various regions.
- Oyster HR: Delivers a fully automated global employment platform, enhanced by robust local expertise to ensure compliance and smooth operations.
- TILEA Group: A leading Employer of Record (EOR) provider in Hungary, TILEA Group helps international businesses hire employees locally without setting up a legal entity. The company offers end-to-end HR, payroll, and compliance management solutions, ensuring full adherence to Hungarian labor laws and tax regulations while enabling smooth and cost-effective market entry.
Lano: Known for its scalable global employment solutions, Lano offers businesses an all-in-one platform for managing payroll, compliance, and workforce expansion across multiple countries-
Deel
TILEA Group
Oyster HR
Learn More
We encourage you to visit their websites and learn more about them, To see which fits you best.
Lano
Conclusions
Expanding your business into Hungary with the help of a reliable Employer of Record (EOR) is a smart and strategic choice. If you are looking to streamline your international growth, selecting the right EOR partner is essential.
At EORquotes.com, we simplify the process of finding the ideal EOR provider for your business. Our expert reviews and comprehensive guides compare the top EOR providers, covering everything from their services to pricing models and real customer feedback. Don’t leave your international expansion to chance—use our insights to make informed decisions and secure the best available deal. For the most current pricing, we recommend visiting the providers’ websites directly. Since we’ve partnered with nearly all the top 100 EOR providers globally, we offer exclusive access to deals you won’t find elsewhere. By using the links on our site, you’re guaranteed a better offer.
Let EORquotes.com guide you through a seamless selection process, allowing you to focus on scaling your business while we manage the complexities of global hiring. Get started today and find the best EOR provider for your needs in Hungary!
Frequently Asked Questions (FAQs)
Why should I use an EOR service in Hungary?
How does the EOR process work in Hungary?
What are the benefits of using an EOR service?
How do I choose the right EOR provider in Hungary?
What are the costs associated with using an EOR service in Hungary?
How quickly can I start employing through an EOR in Hungary?
Can the EOR handle both full-time and part-time employees in Hungary?
How does data protection work when using an EOR in Hungary?
Are there specific regulations for hiring foreign employees through an EOR in Hungary?
What happens if an employee needs to be terminated in Hungary?
Can an EOR in Hungary assist with employee onboarding and training?
How do I get started with an EOR in Hungary?
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