Hungary is a popular tourist destination in central Europe. The country has a population close to 10 million, and its landlocked location makes it great for forming business relationships with other Central European countries. Although it’s great to focus on these benefits during an expansion, you’ll still need to work on more challenging tasks such as setting up your Hungary payroll.
As a global PEO, we understand the difficulties of an expansion, and we mitigate them through our suite of global expansion services. We offer Hungary payroll outsourcing for companies looking to expand without the hassle of setting up their 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 contribute 10% for pension contribution, 7% for social security contribution, and 1.5% for unemployment contribution.
As an employer, you 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 four different Hungary payroll options:
- Internal: Not many companies can choose to run internal payroll because it requires a larger budget, staff, and knowledge of local labor laws. However, this payroll process may be an option for larger companies looking to work in Hungary for a while.
- Remote: A remote payroll is when you add your subsidiary’s employees to your parent company’s payroll in another country. Doing so will streamline paying all your employees, but different countries will have varying tax and employment laws to follow.
- 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.
- Hungary payroll outsourcing: Your final option is Hungary payroll outsourcing with a global PEO such as G-P. When you work with us, you won’t have to set up your payroll or worry about compliance.
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 candidates you want to hire along with potential business partnerships. G-P will act as the Employer of Record using our existing Hungary subsidiary, so you won’t have to establish your own entity to run payroll and start working.
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 six 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 you terminate the employment by ordinary termination due to reasons related to the employer’s operations or the employee’s health-related abilities or the employer’s dissolution without legal succession.
Payroll Processing Company in Hungary
G-P will help you expand quickly and easily through Hungary payroll outsourcing. Contact us today for more information.