Hungary
[Updated 6/19/25] Employees in Hungary care most about life, accident, and medical insurance. Private medical costs are high, and the public healthcare service is inadequate. When asked about the top five employee benefits, employees in Hungary typically cite life insurance, accident insurance, disability insurance, medical insurance, and retirement benefits. Employers should review their compensation and benefits practices to ensure they remain tax-efficient and compliant in light of the 2019 Hungarian tax law amendments. These changes reduced the preferential tax treatment for certain benefits and lowered the overall annual amount.
Country Insight
Average Cost
The average cost of employee-sponsored benefits in Hungary is approximately 27% of the gross monthly salary. For managers, this is between €250-€500 per month; for other employees, it is between €50-€100 per month.
Mandatory Employee Benefits in Hungary
Mandatory employee benefits in Hungary include pension, parental leave, paid time off (PTO), and eye exams. Supplementary employee benefits include medical, life, and accident insurance. Perks as an employee benefit are not popular because they are taxed as salary.
Pension
The pension system was radically reformed in 1997 with the intention of placing its finances on a sustainable footing. Mandatory private pillar II pensions were introduced with the aim of replacing at least 25% of the state pension for those retiring after 2013. This system was subsequently dismantled by a series of measures taken by the government in November 2010 and March 2012. The mandatory private pillar II provisions were transferred back to state pillar I, and their associated assets were used to reduce the country’s fiscal deficit. The government aims to encourage additional voluntary private retirement savings, and as a first step, in 2014, introduced new tax-deductible pension insurance, which has proven to be popular and continues to drive market growth. However, employer adoption is still below average. State retirement benefits are provided through pension insurance administered by the Hungarian State Treasury (from 1 November 2017).
The basic pension is called the First Pillar, and additional, mandatory benefits, based on differing contributions, is the Second Pillar (only for existing members). The Third Pillar relates to voluntary contributions for extra benefits. The Fourth Pillar concerns contributions to specific accounts.
The normal retirement age for men and women is gradually increasing, depending on the birth year, as follows:
| Birth Year | Retirement Age |
| 1954 | 63.5 |
| 1955 | 64 |
| 1956 | 64.5 |
| From 1957 | 65 |
Women may retire at any age with at least 40 years of qualifying insurance, including at least 32 years (30 years where the woman has raised a disabled child) of insurance in respect of a gainful activity (reduced for those who have raised at least five children by one year for each additional child raised, subject to a maximum reduction of seven years of qualifying insurance).
The pensionable salary for contribution purposes is based on the employee’s actual salary. Effective July 1, 2020, employees and insureds contribute 10%.
The minimum pensionable salary for employer contribution purposes is equal to the minimum wage; employer contributions are at least based on the minimum pensionable salary.
The monthly minimum wage is equal to HUF 200,000 (HUF 260,000 for positions that require at least a secondary education) in 2022.
The monthly minimum wage is equal to HUF 290,800 (HUF 348,800 for positions that require at least a secondary education) in 2025.
Legislated Leaves
Statutory paid annual leave is provided for 20 days (25 days for employees under the age of 18, employees permanently working underground, and other prescribed conditions, and employees assessed as being at least 50% disabled).
Statutory paid annual leave is increased, depending on the employee’s age, as follows.
| Age of the employee (years) | Additional statutory paid annual leave (days) |
| Over age 25 | 1 |
| Over age 28 | 2 |
| Over age 31 | 3 |
| Over age 33 | 4 |
| Over age 35 | 5 |
| Over age 37 | 6 |
| Over age 39 | 7 |
| Over age 41 | 8 |
| Over age 43 | 9 |
| Over age 45 | 10 |
In addition, statutory paid leave is provided in the following circumstances:
- 2 days where the employee has one child under the age of 16 (four days per disabled child)
- 4 days where the employee has two children under the age of 16 (six days per disabled child)
- A total of 7 days where the employee has more than two children under age 16 (nine days per disabled child)
- 2 days in case of the death of a relative.
Paid Time Off
Unpaid leave is provided in the following circumstances:
- Family care leave, where the duration of care (subject to a maximum of two years)is in case of caring for a relative for more than 30 days
- Military service leave – the duration of actual reserve military service.
- While on unpaid leave, the employee may receive short-term sickness benefits (see short-term sickness section for further details) for:
- An unlimited number of days in case of caring for an ill child under age one
- Up to 84 days in case of caring for an ill child from age one up to age three
- Up to 42 days (84 days for a single parent) in case of caring for an ill child from age three up to age six
- Up to 14 days (28 days for a single parent) in case of caring for an ill child from age six up to age 12
Maternity benefits (known locally as pregnancy and confinement benefits) are provided through health insurance administered by the Hungarian State Treasury (from 1 November 2017).
To qualify for the pregnancy and confinement benefit, the employee must have at least 365 days of qualifying insurance within the two years preceding the expected childbirth
The pregnancy and confinement benefits are equal to 70% of the employee’s salary, averaged over the year preceding maternity leave (provisions apply where the employee has less than 180 days of qualifying insurance within the year preceding maternity leave).
The pregnancy and confinement are payable for 24 weeks.
Paid paternity leave is equal to 100% of the employee’s salary and is provided for five days (seven days in case of twins) within two months following childbirth.
Family allowances are provided through health insurance administered by the Hungarian State Treasury. Those eligible receive the following family allowances (from 2018):
- HUF 12,200 per month for one child (HUF 13,700 for a single parent),
- HUF 13,300 per month per child for two children (HUF 14,800 for a single parent
- HUF 16,000 per month per child for three or more children (HUF 17,000 for a single parent) and
- HUF 23,300 per month for a disabled child (HUF 25,900 for a single parent)
- Childcare benefit equal to 70% of the employee’s average salary (the maximum average salary is twice the minimum wage) and is payable from the end of maternity benefits until the child reaches the age of two.
- The childcare allowance is payable until the child reaches age three (or age 10 if disabled) or until the end of the first year of school for twins.
Eye Exams
Eye exams are typically included as part of the Occupational Health Examination, which is compulsory. The type of examination depends on the company’s specific activities.
Vision benefits are separately defined and typically include eyeglasses and glass frames; however, this is restricted by internal company policy.
Cafeteria system 2023
Type of benefits
- Tax-free benefits include kindergarten, nursery, cultural service, sports ticket/pass (0% tax), virus tests, vaccination, and using employers’ bicycles
- Fringe benefits “SZÉP” card up to a given amount (normally till 450K HUF/year)
= (15% Personal Income Tax + 13% social contribution tax) =28% tax
- Certain defined benefits include a “SZÉP” card over the given amount, cash deposit, gift of small value, group insurance
= (15% PIT + 13% social contribution 1.18 =33.04% tax
This website provides more information about Hungary’s labor code as of 2023.
Supplementary Employee Benefits
Retirement
- Pension Insurance
- Policyholder: Corporate or individual (20% tax refund in case of individual policy)
- Voluntary Pension Fund
- Policyholder: Corporate or individual (20% tax refund in case of individual policy)
Due to taxation (in the case of company policies), Pension insurance is provided by the individual. Companies continue their voluntary pension fund only if they had it in previous years. The corporate product is taxable (~70% of salary).
Healthcare/ Medical Insurance
Companies are interested in this coverage; it is a popular employee benefit element.
- Prevention screening 1x annually
- Outpatient services / limited or without any limitation
- Overall laboratory & diagnostic tests (MR, CT, PET CT, X-ray, UH, etc.) – high-value diagnosis
- 1-day-surgery
Social security is available in Hungary, but Medical insurance is recommended due to long waiting lists and lengthy queuing times.
Medical insurance is taxable.
Group life, accident, and health insurance
Companies are interested in this coverage, and it is a popular employee benefit element.
- Term life
- Accidental death, accidental disability
- Short-term disability
- Critical illness
- Daily hospitalization resulting from accidents and illness
Group life, accident, and health insurance are taxable.
Employee Perks
Stipends for massage are common, as are ‘all you can move’ sports cards and wellness programs. These perks are taxed as salary, making them less popular.
This information on mandatory and supplemental employee benefits in Hungary is provided by Asinta’s Central and Eastern European Partner, the GrECo Group.