Under specific circumstances, your employees are entitled to receive cash benefits from the social security system. Social security allowances are usually paid directly by the Treasury, but in some cases, the employer can become a paying agent for them.

Social security and payroll in Hungary

Those who generate income from work and pay taxes after them in Hungary become insured in the Hungarian social security system. This lets people enjoy free healthcare, pension, and various cash benefits in times of need.

Doing payroll for your employees includes managing data about circumstances that may make employees eligible for various cash benefits (e.g. sick-pay if the employee is sick for a prolonged time). Your payroll specialist files a report every month, and your employee receives the relevant allowances directly from the Treasury.

Employers that are paying agents for social security

If a Hungarian company is a paying agent for social security, it means that employees will receive cash benefits from the company instead of the Treasury. Of course, it is still the Treasury who ultimately pays these allowances, but relevant administration is this way outsourced to the company. In exchange, the company is not only reimbursed, but it also receives compensation worth 1% of the cash benefits paid out each month to the employees.

Employers that are paying agents manage administration and payment of the following cash benefits:

• Infant-care allowance (CSED, for csecsemőgondozási díj)
• Child-care allowance (GYED, for gyermekgondozási díj), whether it is paid to parents, grandparents, foster parents, or students in higher education
• Adoption allowance (örökbefogadói díj)
• Sick-pay (táppénz)
• Accident sick-pay (baleseti táppénz)
• Child-nursing sick-pay (GYÁP for gyermekápolási táppénz)
• Allowance based on equity, meaning that any of the above benefits may be granted under special circumstances when the employee would otherwise not be eligible. If the allowance is granted, the paying agent pays it the same as if it were granted with the regular procedure.

These benefits are currently registered in the pink social security booklet of every employee. Starting from 2026, when the pink booklet is being abolished in its paper-based form to reduce the administrative burdens of employers, paying agents will still need to have access to the same data, for which a new online platform will be created. As a result, the administrative burdens of paying agent employers will not be reduced but remain roughly the same, with an updated workflow.

Becoming a paying agent for social security

Becoming a paying agent is mandatory for companies that for 6 consecutive months have at least 100 employees on their payroll who are entitled to receive any of the above-listed benefits.

Smaller businesses are also allowed to become paying agents for social security, but it requires additional expertise while it also increases the workload on the payroll specialists. Additionally, the employer becomes responsible for paying cash benefits to employees on time, so cash-flow related workflows should be adjusted accordingly. The 1% reward on top of the monthly reimbursement is meagre compensation for all the extra work and knowledge required. As a result, few SMEs opt in.

Helpers Finance at your services

Helpers Finance provides not only accounting but also payroll and HR compliance services to SMEs in Hungary. Thanks to our precise and up-to-date reports, the Treasury will have every piece of information in a timely manner so your employees can receive their cash benefits from social security on time, without any additional planning required from you.

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