Hungary’s location makes it great for forming business relationships with other Central European countries. But before you can make the move and build your global team, you’ll seed to set up your Hungary payroll.
As a global Employer of Record (EOR), we understand the difficulties of an expansion. With us, you can expand to Hungary swiftly and smartly without the hassle of incorporating or setting up your own payroll. Plus, we handle all elements of compliance and local labor laws, so you can put your time and energy into running your company.
Taxation rules in Hungary
Employers must make the right tax contributions to stay compliant. For example, the statutory social security contribution for employers is 13% of gross salary, while employees allocate 10% for pension contribution, 7% for social security contribution, and 1.5% for unemployment contribution.
Employers also have to pay a flat corporate income tax of 9%. Employees pay income tax of 15% regardless of their income level
Hungary payroll options for Companies
Generally, you have 3 different Hungary payroll options:
- Internal: Running internal payroll requires a larger budget, HR team, and knowledge of local labor laws. However, this payroll process may be an option for larger companies with a long-term commitment to Hungary.
- Hungary payroll processing company: You can also work with a local Hungary payroll processing company that will take care of outsourcing your payroll, but you’ll still have to worry about meeting all of the country’s compliance laws.
- G-P: The easiest way to run payroll in Hungary and stay compliant is partnering with an Employer of Record (EOR) like G-P. With us, you can rest assured that all employees will be paid on time, freeing you to focus on other important aspects of your business.
How to set up a payroll in Hungary
Companies need an established subsidiary before they can set up their Hungary payroll. However, it can take anywhere from a couple of weeks to a few months to incorporate, causing you to lose valuable candidates you want to hire along with potential business partnerships.
Luckily, G-P offers an alternative. As a global EOR, you can leverage our existing Hungary subsidiary, so you won’t have to establish your own entity to run payroll and start working.
Entitlement/termination terms
Creating entitlement and termination terms as part of an employment contract before you choose a Hungary payroll option can help you stay compliant. Both the employer and employee must provide a notice period of at least 30 days but no more than 6 months.
If the employment contract is terminated by the employer, the regular 30-day notice period is extended by up to 60 days depending on tenure. Employees are entitled to severance pay if their employment is terminated through ordinary dismissal due to reasons related to the employer’s operations, the employee’s health, or the employer’s dissolution without legal succession
Streamline global payroll management with G-P.
G-P streamlines each step of the payroll management process with our market-leading global employment platform. Pay your team with confidence anywhere in the world in 150 currencies with our 99% on-time automated payroll system — all with just a few clicks. Our products also integrate with leading HCM solutions, syncing employee payroll data across platforms automatically to create one reliable, convenient source of truth for HR teams.
Contact us to learn more about how we can support you.