The Hungarian tax system related to employment has followed a relatively stable structure for many years, although smaller adjustments appear from time to time.
IMPORTANT: Under current Hungarian legislation, the managing director of a Hungarian company is required to pay taxes and social contributions based on the statutory guaranteed minimum wage, even if they do not actually receive any salary.
The following taxes and contributions are deducted from the employee’s gross salary:
This is the largest item deducted from every salary (except in cases where tax allowances apply).
Examples of available allowances:
tax allowance for people under 25
allowance for mothers with four or more children
newly married couples’ allowance
disability allowance
first-marriage allowance
These allowances can reduce or even completely eliminate the PIT liability.
This is a consolidated contribution that has been paid in a unified form for years. The distribution is as follows:
pension contribution: 10%
health insurance contribution (in-kind and cash benefits): 7%
labour market contribution: 1.5%
This means that with a gross monthly salary of HUF 500,000, the employee’s net salary is approximately HUF 332,500 (without applying any allowances).
The employer’s obligations remain unchanged in 2025:
This is paid on the total gross salary.
Certain categories of employment are eligible for SZOCHO allowances (e.g. young entrants, rehabilitation allowance, R&D employees, specific sectoral allowances).
This does not apply to all companies—only if:
the average statistical headcount exceeds 25 employees, and
the ratio of employees with reduced working capacity does not reach 5%
In 2025, the contribution amount is: HUF 2,300,000 per missing person per year. This can be a significant cost for many companies.
Total employer burden: 13%, provided the rehabilitation contribution does not apply.
Let’s consider an employee with a gross monthly salary of HUF 500,000.
Employer’s total cost:
Gross salary: HUF 500,000
13% SZOCHO = HUF 65,000
Total employer cost: HUF 565,000
Employee’s net salary:
15% PIT: – HUF 75,000
18.5% SSC: – HUF 92,500
Net salary: HUF 332,500
So the employee receives HUF 332,500, while the company pays HUF 565,000 for that same employee. Total taxes and contributions: HUF 232,500 (in November, 2025)
Knowing the exact structure of contributions is essential for:
employer cost planning
salary calculations
employee decision-making
HR strategy
salary negotiations
Although the Hungarian tax system may seem complex at first sight, its basic structure is stable and predictable. Both businesses and employees benefit from understanding the financial burdens associated with employment — it forms one of the cornerstones of long-term financial and HR planning.