Labor leasing in Hungary

Labor leasing in Hungary

1. Registration as a foreign employer in Hungary
2. Labor hiring / labor leasing services in Hungary – Hungarian employer
3. HR management services (complementing services)

1. Registration as a foreign employer in Hungary

The foreign business shall meet its registration obligation as an employer in Hungary by requesting a tax number by filling in and submitting form 16T201INT. Via this form, the business concerned can also inform the authority of the data of the person authorised to perform electronic administration on behalf of the business.

This person should be a Hungarian tax specialist person with Hungarian tax number who can help you to fill in and submit on electronically way the monthly tax declarations (1608INT) and the declaration(s) about your employee(s) and run the Hungarian payroll in English.

The commencement of the employee’s insurance obligation must be reported on the first day of the insurance period at the latest; the termination of the insurance or periods without work performance obligation or income subject to social security must be reported within 8 days (16T1041INT).

If your foreign employee need a Hungarian tax number and social security number as a private person it has to be applied before the employment (16T34 and the application form to the OEP Hungarian health fund).

Tax and social security payment

In compliance with 56/A of Act LXXX of 1997, income subject to contribution payment, paid to an employee performing work for a foreign business within the framework of a legal relationship subject to insurance obligation, shall be subject to the payment of pension contribution, health insurance and labour market contribution, to be established and deducted by the employer.

The income forming the contribution base is burdened by 10% pension contribution and 8.5 % health insurance and labour market contribution. Within the health insurance and labour market contribution, the in-kind health insurance contribution is 4%, the in-cash health insurance contribution is 3% and the labour market contribution is 1.5%.

As a main rule, employers shall pay 27% social contribution tax for the tax base (gross salary), and the employee has to pay 15% PIT.

The declaration and data reporting and payment obligation related to the insurance, contribution payment and social contribution tax payment obligations shall be performed electronically (through a Client Gate, www.magyarorszag.hu) on a monthly basis, by the 12th day of the month following the subject month.(1608INT)

2. Labour hiring / labour leasing services in Hungary – Hungarian employer

The labour leasing is a three-party relationship between the technical employer (Tilea), the professional (employee) and the real employer (your company). Tilea will provide the leased professional the same fundamental employment conditions which normally also would apply to regular employed work forces. Labour leasing can especially support internatinol based companies to better manage own human resources capacity in Hungary or internationally (Tilea has international labour leasing licence).
Major advantages of the labour leasing are:

• to cover short-term or long-term demand in manpower quickly
• felxibility – work contracts adapted to the requirements of the real employer
• can be obtained by companies to better adjust to high impact projects or to changes in the economy
• to work more efficient while keeping the risk to a minimum
• minimization of corporate risk (employment, tax, social security etc. risks as well)
• quick responds time to market changes
• uncomplicated access to industry specialist
• controlled costs regarding the labour leasing (without the cost of the establishment and operating of a company)

3. HR management services (complementing services)

We provide to the international working multinational companies for the first steps mainly on the Hungarian market (if required on the EU market) complementer HR management services such as:

• wok permit, residence permit services (together with accomodation services, company and private enterpreneur establishment services)
• assignment services
• labour law consulting services
• international tax advising services
• international payroll and accounting services (together wir special reporting services)
• seat and office registration services together with administration services