If you need cleaning and similar services for your business, you will need to contract a provider. However, if you need this type of work done at your home, you can engage domestic workers and save on taxes. Certain types of domestic work are not taxed in Hungary, although the work itself must be reported to the Tax Authority.
Who are domestic workers?
Domestic work includes all the work performed in a home, usually by the people living there and for free. Domestic workers are people who work within a home and perform various household services for their employers for a fee. In Hungarian, we refer to them as “háztartási alkalmazott”, while in English they are also called household employees, domestic servants, or sometimes simply “the help”. This type of work enjoys a special status in Hungary, and under specific conditions it is not taxable.
Domestic work can and will be taxed if it is performed by someone self-employed or employed by a company providing such services. However, if the domestic worker is a natural person employed by a natural person, it is enough to report the fact of domestic work being performed. No taxes will be levied, and no additional paperwork is required. At the same time, the domestic worker will not be insured by social security, and they will not enjoy the protections of regular employees.
In this employment structure, domestic workers can take care of the following tasks. The list is exhaustive, so if the task you have in mind does not fit these categories, it cannot be performed as domestic work.
- Cleaning the home
- Cooking
- Washing clothes
- Ironing
- Babysitting or tutoring at home
- Home care and nursing
- Housekeeping
- Gardening
Report domestic work in advance
Domestic workers can perform work for various households during the same period. Each employer is supposed to report the employment in advance to the Tax Authority either by phone by calling the Hungarian number 185, through ÁNYK (the “general tool for filling in forms”), or online through ONYA (the “online tool for filling in forms” – see detailed instructions in Hungarian here).
The employer can make the report in advance for the current month, and it will be valid until the end of the month. If the employment is continual, it can be reported for several months in advance. There is no reporting fee (not since 2024; it used to be HUF 1,000 / month before).
To report domestic workers, you will need to submit the following data:
- Employer’s name
- Employer’s personal tax number
- Domestic worker’s name
- Domestic worker’s personal tax number
- Domestic worker’s social security number
- Employment period
The domestic workers will not need to report their income in their yearly tax returns. However, at the end of each month, they may ask their employers for a document verifying the employment (you can find a sample here, click “IAKB nyomtatványkép” on the right).
No taxes on domestic work
Since payment for this type of domestic work is a transaction between natural persons, no taxes are levied on it. The domestic worker does not have to pay either income tax or social security contribution, and the employer doesn’t have to pay social contribution tax.
Since they do not pay for social security, domestic workers will not be insured based on this type of employment. Unless they are otherwise insured, they must pay the monthly insurance fee themselves (which is HUF 11,800 / month, or HUF 390 / day in 2025). In line with this, domestic work is often performed by students, by pensioners, or as a side job, so by people who are already insured in Hungary.
Moreover, domestic workers do not enjoy the protections normally available to regular employees. Since this is a form of simplified employment, there is no contract, probation, or notice period. At the same time, minimum wage rules do not apply either.
What to watch out for?
1. Penalties for non-compliance
While this type of domestic work is tax exempt, reporting is required. If an employer fails to report their domestic workers, that will be treated as unreported employment. As such, the employer will be required to pay
- penalty up to HUF 100,000, and
- all the taxes and contributions for the entirety of the employment as if the paid sum was a net salary.
2. Work-permit holders are excluded
Third-country nationals who have Hungarian residency based on their employment cannot take on domestic work as a side job (same as they cannot take on any side job unless they start a business for it). Even though the income from domestic work is outside the scope of Hungarian taxation (“adórendszeren kívüli kereset”), immigration rules governing the employment of third-country nationals take higher priority.
Helpers Finance at your service
Domestic work is different from other household work as it is a paid service and a transaction between natural persons. Even though such work is not subject to taxes, it must be reported in advance, just like any other type of employment. At the same time, the benefits of regular work will not be available to domestic workers.
Helpers Finance offers accounting and payroll services to foreigners operating a business in Hungary. While domestic work is normally not in the scope of our services, we do our best to keep our clients informed and let them make informed decisions regarding their finances. If you need help with anything related to accounting in Hungary, feel free to contact us.
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