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How to hire remote employees in
Hiring in Hungary can be notoriously difficult—but not when you know what you’re doing. If you want to hire remote talent in Hungary, you have two options: Hire people as contractors, or hire them as employees.
If you want to successfully hire in
Hungary
, you have two options:
Laws about hiring contractors are significantly more simple in
Hungary
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Thera for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
Hungary
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
Hungary
.
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
Hungary
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
Hungary
, you can pay them with Thera in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Hungary than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Hungary.
All employees are entitled to a minimum of 20 days of paid vacation per year. Starting at the age of 25, the number of annual vacation days is raised by 1 day every 3 years during their twenties, and every 2 years during their thirties and forties.
There are 11 public holidays in Hungary but its custom to grant additional days e.g. 2nd St Stephen’s day in order to have a long weekend.
Employees are entitled to 15 days of sick leave per year, paid by the employer at a rate of 70% of the salary.
From the 16 days, the payment varies between 50%-60% depending on the term of service. 1/3 of the payment is paid by the employer and 2/3 are paid by the National Health Insurance Fund.
Women have 24 weeks of maternity leave but are allowed to take up to three years off and receive maternity benefits. For the first six months, mothers are entitled Pregnancy and Confinement Benefit (CSED) at a rate of 70% of the salary.
For the next eighteen months, until the child’s second birthday, mothers are entitled to Child Care Fee (Gyermekgondozási díj – GYED) at a rate of 70% of the salary up to a maximum of double the minimum wage.
A benefit called Child Home Care Allowance (Gyermekgondozási segély – GYES) is available for parents or grandparents taking care of a child up to the age of three.
The benefits are paid by National Health Insurance Fund of Hungary (NEAK).
Following the birth of their child, fathers are entitled to five days of paid leave, which they may take in one or in several parts until the end of the second month after the birth. Any income and taxes related to this period of supplementary leave are reimbursed to the employer by the Hungarian State Treasury.
After the maternity leave is over, one parent can take parental leave up until the child reaches the age of 2 years old. This leave is paid at the rate of 70% but is capped at double the minimum daily wage.
In addition, one parent is entitled to additional paid time off:
2 additional days for 1 child
4 additional days for 2 children
7 additional days for more than 2 children
This additional leave is granted up until the child reaches the age of 16 years old.
None.
None.
None.
Both the employee and employer must provide termination in writing and must contain a justified reason for dismissal.
Termination during probation is effective immediately.
Temporary (fixed-term) contract terminates at the end of fixed term.
Termination of a permanent contract requires a notice period of 30-90 days
Severance pay varies between 1-9 months depending on the length of service and age.
An employee will be entitled to severance pay in the following termination scenarios:
The probation period is optional and cannot exceed 3 months.
Full-time employment is considered 8 hours per day and 40 hours per week.
Overtime hours during the week are paid at a rate of 150%. Overtime hours on weekends and bank holidays are paid at a rate of 200%.
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