Payroll, social security and HR - Helpers Finance



Hiring an employee does not stop at setting them tasks and paying their work: make sure you meet all requirements set by the Hungarian Tax Authority for employers. Since all Hungarian companies are obliged to submit monthly reports of employees’ salaries, deducted taxes and contributions, and the employer’s taxes, with our payroll services you can rest assured that these reports are always submitted on time and payroll administration is coordinated. This way your company remains always fully compliant and an attractive workplace for talented candidates with great potential.

If you are just planning to hire employees and need help in recruitment, please read on here.

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One of the simplest way of hiring manpower for only a short time is through simplified employment. Beside the agreed salary, the employer has to pay HUF 1,000/day as simplified employment tax after each temporary worker (regardless if the worker worked only 1 hour or 8 hours that day). The tax payment is due on the 12th  day of the following month.

Employees’ wage is tax free up to a certain limit. In 2018 the tax-free limit is HUF 8,255/day (if the job doesn’t require qualification) and HUF 10,790/day (if the job requires qualification). Above this limit employees must pay 15% income tax when they prepare their annual income tax return. The return will be prepared based on the payslip they receive from the employer.

Temporary workers (employed by simplified contracts) can work 15 days a month (max. 5 days in a row) and 90 days a year.

The number of simplified employees your company is allowed to employ depends on the number of regular employees (registered with an employment contract).

Simplified employment must be reported to the tax authority either by phone or electronically. The registration can be cancelled within 2 hours or by 8 a.m. in the morning.

Occasional workers do not become fully insured by this type of employment. They are entitled only for emergency health treatments, unemployment benefit and pension. For this reason, workers must pay health insurance on their own.

When your employee works overtime, he/she is entitled to receive a wage supplement. In Hungary, wage supplements are calculated as follows:

– There is a 50% bonus for working on Sunday.

– There is a 30% shift bonus for working between 6 p.m. and 6 a.m. if there is a regular change in the start of the day’s work (it regularly changes if the scheduled starting time for work differs on at least one third of the work days and there is at least a four-hour difference between the earliest and the latest starting time).

– There is a 15% night shift bonus if the employee is not entitled to a shift bonus and the night work (i.e., work done after 10 p.m.) exceeds 1 hour.

– There is a 50% wage bonus (overtime) for working in hours outside the scheduled working time and over and above the working time frame; (however, the same amount of leave time may be taken instead of this bonus, but since the amount corresponding to the base wage must be paid for this leave time, this is not really worth it for the employer).

–  There is 100% bonus for working on a scheduled weekly day off (weekly rest time), but the amount of the bonus is only 50% if the employer provides another weekly day off (weekly rest time).

If an employee commutes between the workplace and his permanent/temporary home, the travel tickets or travel passes have to be reimbursed at least in 86% by the company. This is tax-free for the company and the company may choose the make the reimbursement in full.

If the employee stays in the town of the workplace and travels home (where his/her permanent home is) only a few times a month, his/her ticket can be reimbursed 4 times a month, to HUF 36,190/month (in 2018). The same cost ceiling applies if he/she travels by car.

In both cases the following documents are required:

– a statement of the travel costs signed by the Employee;
– a copy of his/her address card
– the tickets/passes, or an expense sheet for the fuel costs
– an invoice of the ticket/pass issued to the company’s name

If someone commutes by car, the sum that can be reimbursed tax-free is calculated based on the Tax Authority’s directives.

The working time frame means that the duration of an employee’s working time must be specified in a framework of no more than 16 weeks (or four months); that is, in a 16-week work period the employee’s working time is 14 x 40 hours (= 640 hours).

These 640 hours of working time must be distributed over 16 weeks in accordance with the following restrictions and rules:

– Working time may be distributed over every day of the week (even Sunday) but NOT on public holidays (e.g., August 20, October 23, January 1).

– Working time may be distributed disproportionately, but daily working time must be no less than 4 hours and no more than 12 hours (so the employee may work, for example, 6 hours one day and 12 hours the next), but the weekly working time may not amount to more than 48 hours.

– There must be at least 11 hours between the end of the preceding day’s work and the beginning of the next day’s work.

– Work schedules must be communicated in advance and in writing for at least one week, and this must be done at least seven days beforehand. Accordingly, employees must communicate their work schedules for the week beginning August 8, 2016 no later than August 1, 2016. This information should be communicated in the usual way for the given place and always in writing; that is, it is sufficient to post this in a prominent, clearly visible place.

– The employee must be given at least 20 minutes in breaks for a work day of more than six hours and an additional 25 minutes in breaks for a work day of more than nine hours (in the latter case this means a total of at least 45 minutes).

– There must be at least two days off every week, and each month at least one of these must be on a Sunday. However, time off may be given in such a way that the average for the working time frame is 48 hours off every week, but this latter must be uninterrupted.

– Only work that varies from the work schedule or work that exceeds the working time frame constitutes extraordinary working time (overtime). An example of the first case is when the employee is scheduled to work from 8:00 a.m. to 6 p.m. on a given day but nevertheless works till 8 p.m. (in this case the extra two hours constitute overtime and are paid accordingly). However, more than 12 hours of work a day may not be required even as overtime. An example of the second case is when the employee works 645 hours instead of 640 hours in the period of the working time frame; this entails 5 hours of overtime.