Legal framework of simplified employment in Hungary

Simplified employment is one of the most popular atypical form of employment in Hungary primarily as a result of its streamlined administrative requirements and more favourable public levies.

Simplified employment in Hungary is basically regulated by two pieces of legislation: Act I of 2012 (Hungarian Labour Code) typically contains the most important labour law restrictions and specifies which basic labour law rules may be deviated from in the case of simplified employment and casual employment. Act LXXV of 2010 on Simplified Employment regulates administrative details.

Two forms of simplified employment are distinguished: seasonal work (agricultural or tourist seasonal work) and casual employment, including film extras.

Unchanged provisions: on casual employment

A casual employment arrangement may be entered into between the same parties for a maximum of five consecutive calendar days up to a total of 15 calendar days within a calendar month and not more than 90 calendar days within a calendar year.

A film extra continues to be defined as a natural person whose occupation is classified under FEOR code 3711, provided their role is auxiliary and exchangeable within the film production. The daily net income from this activity can not exceed 12% of the minimum wage valid on the first day of the month, rounded to HUF 100, i.e. HUF 34,900 as from 1 January 2025.

In the case of casual employment under a simplified employment relationship, the number of employees employed on a calendar day may not exceed:

• 1 person, where the employer has no full-time employees under the Hungarian Labour Code,
• 2 persons, where the employer employs between 1 and 5 employees,
• 4 persons, where the employer employs between 6 and 20 employees,
• 20% of the total workforce, where the employer employs more than 20 employees.

Unchanged reporting obligations and wage conditions

The simplified employment relationship is established by verbal agreement between the parties, upon notification by the employer. However, it is recommended that concluding a written contract by using a template available on the NAV website.

Based on the employment relationship established for simplified employment, the basic salary or performance-based wage shall be at least 85% of the statutory minimum wage, or 87% in the case of a guaranteed minimum wage, in accordance with the specified conditions. For film extras, the daily net wage can not exceed HUF 34,900 from 1 January 2025.

The simplified legal relationship has to be reported electronically, by telephone or via a mobile application prior to commencement of work. Notifications cannot be amended or withdrawn retrospectively. Amendments or withdrawals are permitted within two hours of submission, or until 9 a.m. on the day of notification if employment commences the following day or lasts more than one day.

Changes effective since February 1: public levies

From 1 February 2025, public levies payable by employers have changed. The new amount of the public levy calculation base had to be applied for the first time after 1 February 2025, i.e. for legal relationships established on or after 2 February 2025.

The new public tax payable for each calendar day of employment per employee is as follows:

• for seasonal work in agriculture and tourism, 0.75% of the minimum wage valid on the first day of the month, i.e. HUF 2,200
• for casual employment, 1.5% of the minimum wage valid on the first day of the month, i.e. HUF 4,400
• for casual employment as a film extra, 3% of the minimum wage valid on the first day of the month, i.e. HUF 8,700.

Forthcoming changes: new rules on time limits

Unlike casual employment, the time limit for seasonal and casual employment combined is a maximum of 120 days within a calendar year. This time limit has not changed from the previous one and will not change. However, from 1 July 2025, a significant change will come into effect regarding the calculation of the 120 days. While currently a worker cannot work under simplified employment scheme for more than 120 days in a calendar year for the same employer, from 1 July, this restriction will apply to all employers. This means that if someone works for several companies under simplified employment in Hungary, the total number of days spent in simplified employment at all his/her employers cannot exceed 120 days per year.

This restriction was supplemented by a legislative amendment promulgated on 24 April 2025. The amendment supports people working in agriculture by allowing them to extend the 120-day limit by an additional 90 days, subject to higher public levies. This amendment will take effect from 1 January 2026, and does not apply to 2025.

To monitor the time limit, the Hungarian tax authority will introduce an electronic query system enabling employers to verify an individual’s remaining simplified employment quota prior to engagement.

The new time limit rule represents a significant change, as until now the number of days of simplified employment was limited only on the employer’s side. The system, which will come into force on 1 July, will further restrict the possibility of simplified employment in Hungary: employers will have to take the time to check the employee’s quota, as the tax authority may reject the registration if it exceeds 120 days.

With decades of experience supporting clients across diverse sectors, the payroll experts at WTS Klient Hungary offer tailored advice to help employers comply with legal requirements and to optimise employment structures. Feel free to contact us!

This article provides general information and does not constitute advice.

A Changes to simplified employment in Hungary in 2025 bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

Company car tax

As we recently mentioned, the bill will indeed raise the rates of the company car tax – which were promulgated by decree and are effective from 1 July 2022 – to the level of a law from 1 January 2023. The tax burden is nearly doubling (for the precise amounts, please see our earlier article).

Corporate tax 

Based on the proposal, the tax base is reduced by the amount of the impairment recognised as an increase in pre-tax profit in previous fiscal years when an ownership share was derecognised – as evidenced by tax returns and supporting statements – matching the extent to which the tax base has not yet been reduced by a reversal, and the tax base is increased by the amount of impairment recognised in the fiscal year on the ownership share as a charge to pre-tax profit for the fiscal year, at the taxpayer’s discretion.

The new provisions on impairment shall first be applicable to the impairment charged in the fiscal year of 2022 when determining the tax liability for the 2022 fiscal year.

VAT

The latest Hungarian tax amendments do not leave VAT untouched either. According to the proposal and in light of judgment C-717/19 (Boehringer case concerning the price subsidy for pharmaceuticals), in the case of a claim for a subsequent tax base reduction stemming from a payment made under a subsidy volume contract, the taxpayer will not have to perform a self-revision but will be able to account for the given amount in the tax assessment period including the date of the reimbursement, at the earliest.

Innovation contribution

The proposal amends the Act on Scientific Research, Development and Innovation, stipulating that the Hungarian permanent establishment, including the branch, of a foreign-registered business must pay the innovation contribution. The contribution payment obligation of permanent establishments shall enter into force on the 31^st day after the promulgation of the law.

A permanent establishment falling under the scope of the innovation contribution must determine, declare and pay its innovation contribution advance for the 2022 fiscal year by 20 October 2022. The contribution advance is the estimated amount payable for the 2022 fiscal year and calculated pro rata to the number of days when the contribution payment obligation prevailed. A contribution advance also has to be paid for the first two quarters of the 2023 fiscal year, the quarterly amount is a quarter of the contribution payable for 2022.

Social contribution tax

The amendment to the Act on Social Contribution Tax changes the social security rules for postings. Accordingly, working days should be taken as the basis instead of calendar days when establishing the portion of the income taxable in Hungary, and the pro-rating should be implemented accordingly.

The proposal deletes from the Act on Social Contribution Tax the concept of basic salary applicable in the event of a posting abroad; from now on, the rules of the Act on Social Insurance Contributions will apply, according to which the income underlying the contribution base is the actual basic salary.

Personal income tax

The latest Hungarian tax amendments also affect the Personal Income Tax Act. The proposal supplements the range of methods that the self-employed can use to calculate the amount chargeable under fuel consumption in connection with the business use of their own (rented or leased) vehicles, with regard to plug-in hybrid and pure electric vehicles.

Hungarian tax amendments in transfer pricing

In our opinion, the most serious tax amendments are expected in the area of transfer pricing. The proposal affects the rules on related companies in several points. We will explain the details on these amendments shortly in a separate article. The most important changes affect the following areas:

• Data reporting obligation: In Hungary, data will have to be reported first in the corporate tax return submitted after 31 December 2022. The exact content of the data reporting will be defined by the transfer pricing decree.

• Application, definition and use of the interquartile range: If the consideration applied is outside the arm’s length range, then as a general rule only the median can be taken into account as the arm’s length price, and the transfer pricing adjustment must be made to this point. The exception to this is if the taxpayer verifies that a value within the range other than the median reflects the transaction under review the best, in which case an adjustment should be made to that value instead of the median.

• Fines and default penalties applicable during tax inspections: For missing or incomplete transfer pricing documentation, the maximum fine will increase from HUF 2 million (roughly EUR 4,918) to HUF 5 million (roughly EUR 12,290), and for repeated infringements from HUF 4 million (roughly EUR 9,835) to HUF 10 million (roughly EUR 24,590).

Tax amendments for casual employment

The modification of the Act on Simplified Employment was incorporated into the government decree containing the extra-profit tax, and these changes entered into force on 1 July. According to this, for seasonal workers in agriculture and tourism working under the simplified employment scheme, the public levy payable by the employer will rise from the current HUF 500 (roughly EUR 1.2) to 0.5% of the minimum wage, i.e. to HUF 1,000 (roughly EUR 2.5). For general casual employment, the employer has to pay 1% of the minimum wage i.e. HUF 2,000 (roughly EUR 5) instead of the daily HUF 1,000 (roughly EUR 2.5). For film extras, employers are obliged to pay 3% of the minimum wage, which corresponds to an increase in the tax burden from HUF 4,000 (roughly EUR 10) to HUF 6,000 (roughly EUR 14.7).

In this article we only highlighted the most important aspects of the tax amendments submitted on 21 June. If you have any questions about these or any other rule changes not mentioned here, feel free to contact the tax consulting team at WTS Klient Hungary.

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