Social Security
The Hungarian social security system protects against various risks, including sickness, maternity, old age, invalidity, occupational diseases, workplace injuries and accidents, survivorship, children’s education, and unemployment. All gainfully employed individuals and those with equivalent status are insured against these risks. This includes employees in paid employment (such as those working in public administration), self-employed individuals (including members of cooperative societies), various categories of persons with equivalent status, and individuals receiving income subsidies, job-seeker benefits, or job-seeker aid before retirement.
Social insurance coverage is automatic for all individuals when they commence employment. Employers are responsible for registering their employees, while self-employed individuals must register themselves with the relevant local bureau of the taxation and finance office or the competent social insurance organisations, as applicable. Both employers and employees contribute to the system through mandatory social insurance contributions. In 2025, the contributions are structured as follows: employers must pay a social contribution tax of 13% of their employees’ gross wages. Employees face deductions from their gross wages, including 15% personal income tax and a social security contribution of 18.5%, which is composed of several components: 10% pension contribution, 4% healthcare contribution, 3% unemployment insurance, and 1.5% work accident insurance. In total, deductions from the employee’s gross wages amount to 33.5%.
The social security system is structured into five main branches. Pensions and health services, including the statutory work accident system, are classified under social insurance. The other three branches are unemployment insurance, the family support system, and the social assistance system. While the Hungarian social insurance system’s management, organisation, and administration are centralised, the provision of social benefits is relatively decentralised.
Healthcare and Insurances
Hungary has a single type of health insurance, which guarantees compulsory coverage under the law. Employers are responsible for declaring their employees and paying national insurance contributions to the tax authority, which records their insurance rights. Healthcare services are provided by designated healthcare providers, including private providers contracted under the national health insurance system.
The beneficiaries of the health insurance system are divided into two categories:
- Contributors with Full Entitlement: These individuals are statutorily obligated to pay contributions. They include general employees, civil servants, public service employees, service providers, individuals with other legal working arrangements, self-employed persons (whether working alone or in collective organisations), ecclesiastical personnel, and members of associations. Individuals in this category are entitled to the full range of health insurance benefits, including cash benefits, benefits in kind, and accident allowances. This group also includes those receiving assistance while looking for work, who pay pension contributions on their benefits but are not eligible for cash health insurance benefits.
- Non-Contributing Entitled Beneficiaries: This category includes minors, schoolchildren, full-time students, pensioners, low-income individuals who have reached retirement age, recipients of cash maternity and social protection benefits, residents in personal care institutions, and those required to pay healthcare contributions. These individuals are entitled to non-cash health insurance benefits only.
Unemployment insurance in Hungary is also contribution-based, with employers and employees making contributions. The scheme includes active and passive labour market measures to support employment and provide for unemployed individuals. Placement services are available to all residents, including EEA nationals, regardless of insurance status.
Required Leave
A. Holidays and Annual Leave
Employees are entitled to a minimum of 20 days of annual leave per year. This entitlement increases progressively with age to a maximum of ten additional days from age 45 onwards. Additional vacation entitlements apply to employees with children. Employees receive a maximum of seven additional days for more than two children under sixteen. If the children have disabilities, the entitlement increases by two days per child.
As a general rule, annual leave must be used in the year it is due. The employer schedules the vacation periods but must allow employees to take seven working days each year, provided the employee gives at least 15 days’ notice. Employers must notify employees of their scheduled vacation periods at least 15 days in advance. Although employers hold primary responsibility for scheduling leave, Hungarian employers generally strive to accommodate employees’ preferences.
There are limited exceptions to the rule that leave must be used within the calendar year. If the leave begins in December and continues uninterrupted into January, up to five days may be carried over into the following year. For employees hired after October 1, leave may be granted until March 31 of the following year. In cases where leave could not be taken due to reasons attributable to the employee, such as illness, the unused leave must be provided within 60 days after the cause ceases. Additionally, age-related extra leave may be carried over to the following year by mutual agreement. For executive employees, greater flexibility may be negotiated regarding the carry-over of leave.
Hungary recognises 11 public holidays annually, varying each year depending on moveable dates such as Easter and Pentecost. Public holidays can also fall on weekends, affecting the practical leave scheduling.
B. Maternity / Paternity Leave
Maternity Leave
Mothers are entitled to 24 consecutive weeks of maternity leave, of which two weeks are mandatory. These two weeks can be taken before or after the birth at the mother’s discretion, while the mother can schedule the remaining leave freely. The 24-week maternity leave must be taken as a continuous block. If the mother interrupts the leave, any unused portion is forfeited.
According to the Labour Code, both maternity leave and the first six months of unpaid leave taken for childcare purposes are considered time worked for calculating annual leave entitlement.
The payment arrangement for maternity leave differs from traditional leave. During the 24-week maternity leave, mothers may be entitled to a maternity allowance paid by the Hungarian State Treasury rather than the employer, provided they meet the eligibility requirements based on their social insurance contributions.
Once the 24-week maternity leave ends, parental benefits, such as GYES (childcare allowance) or GYED (childcare benefit), are provided, depending on the employee’s previous insurance contributions.
Paternity Leave
In the event of the birth of his child, a father is entitled to ten working days of paternity leave, which must be taken by the end of the fourth month following the birth of the child. In the case of adoption, this leave must be taken by the end of the fourth month following the finalisation of the adoption decision. Paternity leave must be granted at the father’s request and can be split into a maximum of two instalments. Fathers are entitled to this leave even if the child is stillborn or passes away. Employees are entitled to full pay for the first five working days of paternity leave. Employees receive 40% of their absence allowance from the sixth working day onward. Employers initially pay this allowance to employees but are eligible for reimbursement from the Hungarian State Treasury. Reimbursement requests must be submitted electronically to the appropriate regional office, with claims accepted quarterly.
Parental Leave
Employees are entitled to 44 working days of parental leave until their child reaches the age of three. However, this entitlement is conditional on the employment relationship being in place for at least one year. Unlike standard annual leave, proportional leave allocation (for employment that begins or ends mid-year) does not apply to parental or paternity leave. Employees are entitled to an absence allowance equivalent to 10% of their regular pay during parental leave. This allowance is further reduced by any social security payments received under other legal entitlements.
C. Sickness Leave
Sickness leave in Hungary is designed to share the financial burden of employee incapacity between the employer and the social security system. Employees are entitled to 15 days of sickness leave per calendar year, starting from the first day of incapacity. During this period, the employer pays 70% of the employee’s absence allowance. If the employment relationship begins mid-year, the entitlement to sickness leave is granted pro-rata. Incapacity must be certified by a medical professional.
Sickness leave rules do not apply in cases of workplace accidents, occupational diseases, or incapacity due to pregnancy. Social security benefits cover these circumstances, and the time spent under these conditions does not count toward the 15 days of sick leave.
Employees are protected from dismissal during periods of incapacity for work. While the employer may communicate the termination notice during this time, the notice period does not begin until the employee is fit to return to work.
D. Disability Leave
Different labour and social security rules apply to long-term incapacity. Once the entitlement to 15 days of sickness leave is exhausted, employees may qualify for sickness benefits. These benefits are paid by the social security system from the day after the sick leave entitlement ends for the duration of certified incapacity, up to a maximum of one year. After one year of incapacity, employees are no longer protected from dismissal under termination protection laws.
Persons with reduced working capacity are eligible for benefits if they are at least 15 years old at the time of application and their health status, based on a complex assessment by the rehabilitation authority, is 60% or less. Eligibility requires insurance coverage for at least 1,095 days in the last 5 years, 2,555 days in the previous 10 years, or 3,650 days in the last 15 years, except for those who became disabled before age 35 under certain conditions.
E. Any Other Required or Typically Provided Leave(s)
Unpaid Leave for Childcare
Employees are entitled to unpaid leave for childcare under several entitlements:
- Until the child turns three years old.
- For adopted children, from the date the child is placed in their care for three years or six months if the adopted child is older than three.
Both parents may take this leave simultaneously. No salary is paid during this period, but parents may be entitled to financial benefits depending on their social security eligibility
Employees may take additional unpaid leave to care for a chronically ill or severely disabled child within their household until the child turns ten, in addition to the general childcare leave. This is contingent upon the employee being eligible for childcare support benefits. A child is considered chronically ill or severely disabled if it is under 18 years old and requires constant or intensive care due to conditions defined by specific legal regulations. Only the parent receiving childcare support or childcare allowance is eligible for this type of leave.
Caring for a Sick Child Under 12
Employees caring for a sick child under 12 in their household are considered incapacitated for work. Under the “incapacity for work” legal basis, they are exempt from work obligations and may be entitled to social security benefits.
Job Protection and Leave Accrual During Family and Sick Leave
Employees are protected from termination during maternity, paternity, parental leave, unpaid childcare leave, and carer’s leave. Both parents may take unpaid leave, and termination protection applies to both. Under the same rules as sickness leave, employees are also protected from termination when they cannot work while caring for a sick child.
Annual leave continues to accrue during maternity leave and unpaid childcare leave. Employers are required to grant the accumulated leave before the employee resumes work.
Pensions: Mandatory and Typically Provided
The Hungarian mandatory pension system is a pay-as-you-go (PAYG) state pension scheme. It provides coverage for all individuals engaged in employment and recipients of unemployment benefits and certain childcare benefits. This defined-benefit PAYG system is based on earnings. It includes the following pension benefits: old-age pension, the unique pension benefit for women with a “40 years eligibility period,” and survivors’ pension benefits.
The minimum old-age pension amount is set at 28,500 HUF per month. It applies to individuals eligible for a full pension with a minimum of 20 years of service if their calculated benefit does not reach this threshold. However, such cases are sporadic, affecting fewer than 200 individuals. Pensioners who have reached the statutory retirement age can receive pension benefits while working in the private sector without any income limitations. In contrast, for pensioners working in the public sector, pension payments are suspended, except for certain exemptions, such as roles in education and social services.
Hungary’s only early retirement option is the pension scheme for women with 40 years of eligibility. Women, regardless of age, may retire with full pension benefits if they have accumulated at least 40 years of eligibility period. Eligibility periods include time spent in gainful employment or receiving benefits related to child-raising or nursing fees. At least 32 years of employment are required in addition to time spent on child-raising, or 30 years in the case of time spent on nursing fees. The eligibility period is reduced by one year for each child raised in the household, with a maximum reduction of up to eight years for women who have raised five or more children. Women utilising this scheme are entitled to full pension benefits without any reduction for early retirement.
Survivors’ benefits are based on the pension to which the deceased person was or would have been entitled. These benefits include pensions for widows or widowers, parental pensions for the deceased’s parents, and allowances for orphaned children. Survivors’ benefits aim to provide financial support to family members of the deceased while ensuring continuity of income.
Any Other Required or Typically Provided Benefits
The Hungarian pension system includes additional benefits that resemble pensions designed to address specific circumstances or needs.
The Health Insurance Fund finances disability benefits available to individuals whose working capacity has been reduced based on a complex evaluation of their health status. These benefits are provided either as a rehabilitation benefit or a disability benefit. Individuals capable of rehabilitation are eligible for rehabilitation benefits, which include financial support and services to help them re-enter the labour market. Those who cannot be rehabilitated or who are within five years of retirement age are eligible for disability benefits, which provide financial support only. Importantly, periods of employment while receiving rehabilitation benefits are counted towards years of service for pension purposes.
Early pensions and temporary benefits under retirement age were eliminated mainly under regulations introduced in 2011. The remaining groups eligible for early pension-like benefits are miners and dance artists with at least 25 years of service. Benefits for participants in former early retirement schemes were reclassified under a new “benefit under retirement age” system, which mirrored the previous benefits but converted to standard old-age pensions upon retirement age. These benefits were gradually phased out between 2012 and 2016. Early pensions for members of the armed forces and those in hazardous occupations were also abolished. Former members of the armed forces born in 1954 or earlier retained their benefits without significant changes, while younger individuals were either offered public sector jobs or required to accept a 16% reduction in their service benefits.
An old-age allowance is available for individuals who reach the standard retirement age but are not eligible for a pension due to insufficient years of service (less than 15 years) or whose pension amount falls below legally defined income thresholds. This means-tested allowance is financed through taxes and forms part of the social assistance system. Eligibility for the old-age allowance is reviewed every two years to ensure continued compliance with the criteria.
