Ungarn
Regulations for Working in Hungary
Overview
Companies sending employees to Hungary – whether for a short business trip, a longer-term assignment, or a flexible workation – must comply with numerous legal requirements. Working in Hungary is subject to specific reporting obligations, labor law regulations, and minimum wage provisions. Especially when posting workers to Hungary, it is crucial to understand local regulations and handle administrative processes correctly. This overview outlines the obligations employers must observe when posting employees to Hungary, sending them on a business trip there, or enabling mobile work on site – and how to act in full legal compliance.
EU Posted Workers Directive
What are the requirements?
The company posting workers must complete and submit form “23T104,” which must be filed with the Hungarian tax authority within 30 calendar days of the start of the assignment. This document serves as notification of the posting. The form can be completed electronically in Hungarian or English via the website of the labor inspection authority under Hungary’s Ministry of Economic Development.
Required Documents
If the Hungarian authorities request documentation related to the posting, it must be presented immediately. The following documents may be requested and should therefore be readily available:
- Employment contract
- Time sheets
- Proof of actual salary payments to the posted workers
All documents, including the notification form, must be retained for three years after the end of the assignment. They should be available in Hungarian or English. A certified translation is not required.
Legal Representative in Hungary
Foreign employers must appoint a legal representative in Hungary who is authorized to represent the foreign employer before Hungarian authorities and is able to send and receive documents and notifications on their behalf.
Non-compliance may result in fines ranging from HUF 5,000 to HUF 9,000 (approx. €1,090 to €1,960). Specific penalties include:
- Failure to submit form T104: up to HUF 500,000 (approx. €1,300)
- Non-compliance with employment conditions for posted workers: between HUF 30,000 (approx. €70) and HUF 10,000,000 (approx. €25,000)
Other forms of non-compliance may also lead to fines, including failure to provide documents upon request by the authorities.
Labor Law
Minimum Wage
From January 2025, the minimum wage in Hungary will be HUF 290,800 (approx. €727) per month. A higher minimum wage of HUF 348,800 (approx. €872) applies to employees with at least a secondary school diploma or those in positions requiring intermediate vocational qualifications.
Working Time
Generally, the maximum working time is 12 hours per day / 48 hours per week.
Exceptions
Since January 1, 2023, employees assigned to assemble or install products and systems are exempt from minimum wage and holiday rules, provided their work does not exceed eight working days. This exemption does not apply to posted workers working on buildings (construction, demolition, renovation, assembly or disassembly of prefabricated parts, etc.), installing systems in buildings, or performing related tasks such as earthworks, painting, maintenance, cleaning, etc.
Non-compliance with the applicable labor law may lead to financial obligations, fines, or liabilities under local termination and working time laws.
Social Security
If a worker from an EU country is posted to Hungary, EU Regulation 883/2004 on the coordination of social security systems applies:
- With A1 certificate: The worker remains covered by the social security system of their home country
- Without A1 certificate: Hungarian social security rules apply, and the foreign employer must act as if they were a Hungarian employer
Violations may result in extensive administrative obligations, back payment of contributions (with interest), increased audits, significant penalties, and potential reputational damage.
Income Tax
Remote workers who are subject to income tax in Hungary must calculate their Hungarian tax liability and make quarterly advance payments. Foreign employers are not obligated to withhold income tax in Hungary.
The consequences of non-compliance vary but often result in an immediate obligation to file a tax return in the host country, leading to extensive consequences for both employees and employers.
Immigration & Visas
International activities require exact compliance with international visa and entry requirements. The traveller, the type of activity, the purpose of stay and the duration are decisive for this, whether a business visa, a work visa or other special permits are required.
The consequences in case of infringement may include entry bans and associated loss of revenue, sanctions, fines and reputation damage.
Permanent Establishment
Employees working abroad can establish a permanent establishment through their activities in the target country and thus trigger a chain of financial and administrative consequences for companies.
The consequences of a violation may vary depending on the situation, but each establishment entails a significant administrative burden. In addition to registration, profit allocation and filing of the corporate income tax return, income tax obligations usually also arise.
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