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Living and working conditions

Hungary

GENERAL INFORMATION

Area - 93,030 km2

Population – 9,772,756

Official Language – Hungarian

REGISTRATION AND RESIDENCE PERMITS

Hungary is a full member of the Schengen area. Nationals of the European Economic Area or of Switzerland (EU citizens) may enter Hungary with a valid passport or national identity card. Hungary has joined the European Agreement on Regulations governing the Movement of Persons between Member States of the Council of Europe, signed on 13 December 1957 in Paris. Nationals of Member States that are parties to the Agreement may enter Hungary for visits of not more than three months on presentation of a valid ordinary passport or an expired passport no more than a year out of date, or with a valid identity card or an expired identity card no more than a year out of date. Family members who are not EU nationals may enter Hungary with a travel document and, in the case of countries for which a visa is required, an entry visa, which may be obtained free of charge in an accelerated procedure. However, non-EU family members holding a residence card issued to a family member who is an EU national are exempt from obtaining a visa. Family members also benefit from preferential residence conditions. EU nationals and family members arriving with them or joining them are entitled to stay in Hungary for three months without having to fulfil any special conditions or other formal requirements and without having to register. EU nationals and their family members are entitled to stay for longer than three months if they are in active, paid employment or studying, or support themselves and their family members with their own funds, including full health care coverage.

A stay exceeding three months must be notified, and the legality of stay must be certified by the relevant document. The relevant authority will issue a registration certificate for the EU national and a residence card valid for a maximum of five years for family members who are not EU nationals taking up permanent residence in Hungary. The competent government office then sends the official residential address certificate to the applicant. Subsequent changes in residence must be notified to the document office of the competent local authority.

In Hungary, the Ministry of the Interior together with the Office of Immigration and Asylum (Bevándorlási és Menekültügyi Hivatal, ‘BMH’) and its regional directorates are responsible for matters related to residence, except for visa matters, which are mainly the preserve of the Ministry of Foreign Affairs and Trade. The description of the procedures and conditions in Hungarian, English and German, together with the contact details of the regional directorates and their customer service desks, is available on the Office’s website.

EU nationals and their family members are entitled to permanent residence after residing legally and continuously in Hungary for five years, and receive a permanent residence permit accordingly. EU nationals and their family members may be expelled from Hungary only if they have failed to comply with the requirement to leave the territory of Hungary, if they have provided false or misleading information in the absence of the right to enter or reside in the country, or if their stay poses a real, direct and serious threat to a fundamental public interest, such as law and order, public and national security or public health. If the EU citizen or family member develops a health condition endangering public health before the end of a three-month stay in Hungary, he/she may be expelled from the country if he/she does not submit to compulsory treatment; after three months, expulsion may not be initiated for this reason.

LOOKING FOR A JOB

In Hungary, employment agency services may be provided by bodies belonging to the State employment service (administrative bodies of the Budapest and county government district offices performing employment and labour market-related functions) and by authorised private employment agencies. Jobseekers may not be charged for these services. Legal people, companies without legal personality and sole traders with a registered office in Hungary may engage in private employment agency activities, provided they are registered with the employment office with jurisdiction over the locality of their registered office. On 31 December 2017, there were 861 companies registered as providing employment agency services (according to the total number of registered offices and places of business), over half of which operated in the Central Hungary Region.

Anyone – not only registered jobseekers – may contact local government district office employment services or private employment agencies for assistance.

Information on the service is available on the National Employment Service (Nemzeti Foglalkoztatási Szolgálat, ‘NFSZ’) website. Current vacancies are shown on the Virtual Labour Market Portal (Virtuális Munkaerőpiac Portál, ‘VMP’). Employers can post their job offers on the VMP website. The EURES (European Employment Service) agency system is also accessible from the NFSZ website, where information is provided on unfilled vacancies in Hungary.

INCOMES AND TAXATION

According to figures from the HCSO, the gross average wage was HUF 367 200 in March 2019, 10.2% higher than a year before. In January through March 2019, the gross average wage was HUF 352 200 and the net average wage HUF 234 200; both had risen by 11.0% year-on-year. In January to March 2019, the average gross wages of people in full-time employment (at businesses employing at least five staff, at budgetary institutions and the not-for-profit entities relevant in employment terms) amounted to HUF 352 200 across the national economy or, if adjusted for workfare employees, HUF 362 600. Net average wages were HUF 234 200 without allowances and HUF 241 500 after allowances. Gross and net average wages both rose by 11.0% year-on-year. Gross average wages were the highest in the information and communication technology sector (HUF 632 300) and the lowest in human health and social care, where many are employed under the workfare scheme (HUF 232 300). If excluding workfare scheme employees, the gross average wage in the human health and social care sector was HUF 299 200. Gross average wages amounted to HUF 385 100 for men and HUF 320 000 for women in full employment, representing an increase by 11.6% for men and by 10.0% for women. Gross average wages were HUF 269 500 for the below-25 age group, HUF 366 900 for those between 25 and 54, and HUF 342 700 for people older than 54 years of age. On a year-on-year basis, average wages rose by 17.2%, 11.2% and 10.3%, respectively, in the different age groups. Regular gross average wages (excluding bonuses, rewards and the one-month extra benefit) may be estimated to be HUF 330 000, having increased by 10.7% in one year. While consumer prices rose by 3.2% year-on-year, real wages increased by 7.6%. The main types of central taxation are personal income tax, value added tax, excise duty and interest tax.

There are three VAT rates in Hungary today: 27%, 18% and 5%, where the latter two can be considered as preferential rates. The 5% rate applies to books, certain foods, and products whose sale the State supports through a lower rate of VAT. Most products and services are subject to 27% VAT, whereas certain services (e.g. financial services) are tax-exempt, i.e. no VAT is payable on them. A high excise duty is levied on fuel, alcoholic drinks and tobacco products. Interest tax is payable on interest earned from savings in Hungary, investment yields, market profits from shares; the applicable tax is 15% of the interest income from investment.

Local authorities levy local taxes. Local taxes are: building tax, land tax, communal tax, tourism tax, vehicle tax and local business tax.

The personal income tax rate is 15% for all categories of income. The consolidated tax base is reduced by

  • the family allowance for dependent children (tax base reduction of HUF 66 670 per month for one child, HUF 133 330 per month for two children, HUF 220 000 per month for three or more children),

  • the personal tax relief for severe disability (5% of the minimum wage, HUF 7 450 per month in 2019) and;

  • The consolidated tax base is reduced by the allowance for first marriage.

  • Both spouses may reduce their personal income tax by a monthly net amount of HUF 5 000 for the 24 months after the wedding if at least one of them is marrying for the first time.

The following two tables show the total labour cost and net salary for monthly gross salaries of HUF 150 000 and HUF 800 000 (based on one year’s work, with 1, 2 or 3 dependent children).

Employment 1 - Salaries and wages: HUF 150 000

Number of children

1 child

2 children

3 children

Annual gross income:

1 800 000

1 800 000

1 800 000

Calculated PIT:

22 500

22 500

22 500

Family tax base allowance:

66 670

150 000

150 000

PIT after discounts and allowances:

12 500

0

0

Pension contribution (10%):

15 000

15 000

15 000

Health insurance and labour market contribution (8.5%):

12 750

12 750

12 750

Family contribution allowance:

0

17 499

25 500

Contributions net of family allowance:

27 750

10 251

2 250

Total monthly deductions from gross pay:

40 250

10 251

2 250

Welfare contribution tax (19.5%):

29 250

29 250

29 250

Vocational training contribution (1.5%):

2 250

2 250

2 250

Total monthly employer’s charges:

31 500

31 500

31 500

Monthly amount payable to the state:

71 750

41 751

33 750

Employer’s total monthly costs:

181 500

181 500

181 500

Monthly net amount:

109 751

139 749

147 750

Employment 2 - Salaries and wages: HUF 800 000

Number of children

1 child

2 children

3 children

Annual gross income:

HUF 9 600 000

HUF 9 600 000

HUF 9 600 000

Calculated PIT:

HUF 120 000

HUF 120 000

HUF 120 000

Family tax base allowance:

HUF 66 670

HUF 266 660

HUF 660 000

PIT after discounts and allowances:

HUF 110 000

HUF 80 001

HUF 21 000

Pension contribution (10%):

HUF 80 000

HUF 80 000

HUF 80 000

Health insurance and labour market contribution (8.5%):

HUF 68 000

HUF 68 000

HUF 68 000

Family contribution allowance:

HUF 0

HUF 0

HUF 0

Contributions net of family allowance:

HUF 148 000

HUF 148 000

HUF 148 000

Total monthly deductions from gross pay:

HUF 258 000

HUF 228 001

HUF 169 000

Welfare contribution tax (19.5%):

HUF 156 000

HUF 156 000

HUF 156 000

Vocational training contribution (1.5%):

HUF 12 000

HUF 12 000

HUF 12 000

Total monthly employer’s charges:

HUF 168 000

HUF 168 000

HUF 168 000

Monthly amount payable to the state:

HUF 426 000

HUF 396 001

HUF 337 000

Employer’s total monthly costs:

HUF 968 000

HUF 968 000

HUF 968 000

Monthly net amount:

HUF 542 001

HUF 571 999

HUF 631 000

Tax relief rules are the most favourable for families with three children. The gross salary of HUF 800 000 per month comes to HUF 572 000 net for employees with two children and to HUF 631 000 net for employees with three children. Tax relief for families may be claimed against both tax and social security contributions. Consequently, employees with a gross salary of HUF 150 000 receive a net salary of HUF 147 750 (nearly equal to the gross salary), if they have three children.

Effective from 2019, the range of fringe benefits were curtailed considerably, as were the benefits previously available as certain specific benefits or tax-free benefits. As from 1 January 2019, employers may provide fringe benefits with preferential applicable taxation terms only by paying into the relevant (catering, accommodation or leisure) wallets of the Széchenyi Recreation Card (SZÉP Card). In 2019 fringe benefits are subject to 15% personal income tax and 19.5% welfare contribution tax. This represents a total tax liability of 34.5%. Private sector employers may grant fringe benefits equal to the part of the annual figure of HUF 450 000 proportionate to the days spent in employment. At budgetary entities, the cap is equal to the proportionate part of an annual figure of HUF 200 000.

Last updated:09/2019

COST OF LIVING

The cost of living includes the following main expenditure items:

  • - food,
  • - housing and household expenses (cost of electricity, water and natural gas),
  • - transport and telecommunications,
  • - education and culture,
  • - services (clothing, hairdressing, restaurants, dentist, entertainment, etc.).

Data from the HCSO shows that monthly per capita consumption was HUF 88 600 in the first half of 2018. Hungarian households spent 28% of their total personal expenditure on food. The second highest outlay was on household maintenance (20%), but for those renting a home the figure was much higher, reaching 50-60%. Daily transport costs represent 11% of the total. The amount remaining for other needs was spent on clothing, culture, hotel accommodation and entertainment.

The price of fuel is around HUF 350 to 450 per litre. A family of four spends approximately HUF 20 000 to 35 000 on groceries every week, while a decent pair of shoes costs anywhere between HUF 15 000 and HUF 20 000. Cinema and museum tickets cost HUF 700 to HUF 1 500 on average.

The cost of a visit to the hairdresser ranges between HUF 1 500 and HUF 3 000, though obviously there may be considerable differences between prices in Budapest and outside the capital. Dinner in a medium-range restaurant costs between HUF 2 500 and HUF 3 500 per person.

Text last edited on: 09/2019

RECOGNITION OF DIPLOMAS AND QUALIFICATIONS

The importance of transparency and mutual recognition of diplomas as a crucial complement to the free movement of workers

The possibility of obtaining recognition of one’s qualifications and competences can play a vital role in the decision to take up work in another EU country. It is therefore necessary to develop a European system that will guarantee the mutual acceptance of professional competences in different Member States. Only such a system will ensure that a lack of recognition of professional qualifications will become an obstacle to workers’ mobility within the EU.

Main principles for the recognition of professional qualifications in the EU

As a basic principle, any EU citizen should be able to freely practice their profession in any Member State. Unfortunately the practical implementation of this principle is often hindered by national requirements for access to certain professions in the host country.

For the purpose of overcoming these differences, the EU has set up a system for the recognition of professional qualifications. Within the terms of this system, a distinction is made between regulated professions (professions for which certain qualifications are legally required) and professions that are not legally regulated in the host Member State.

Steps towards a transparency of qualifications in Europe

The European Union has taken important steps towards the objective of achieving transparency of qualifications in Europe:

  • An increased co-operation in vocational education and training, with the intention to combine all instruments for transparency of certificates and diplomas, in one single, user-friendly tool. This includes, for example, the European CV or Europass Trainings.
  • The development of concrete actions in the field of recognition and quality in vocational education and training.

Going beyond the differences in education and training systems throughout the EU

Education and training systems in the EU Member States still show substantial differences. The last enlargements of the EU, with different educational traditions, have further increased this diversity. This calls for a need to set up common rules to guarantee recognition of competences.

In order to overcome this diversity of national qualification standards, educational methods and training structures, the European Commission has put forward a series of instruments, aimed at ensuring better transparency and recognition of qualifications both for academic and professional purposes.

  1. The European Qualifications Framework

The European Qualifications Framework is a key priority for the European Commission in the process of recognition of professional competences. The main objective of the framework is to create links between the different national qualification systems and guarantee a smooth transfer and recognition of diplomas.

  1. The National Academic Recognition Information Centres (NARICs)

A network of National Academic Recognition Information Centres was established in 1984 at the initiative of the European Commission. The NARICs provide advice on the academic recognition of periods of study abroad. Located in all EU Member States as well as in the countries of the European Economic Area, NARICs play a vital role the process of recognition of qualifications in the EU.

  1. The European Credit Transfer System (ECTS)

The European Credit Transfer System aims at facilitating the recognition of periods of study abroad. Introduced in 1989, it functions by describing an education programme and attaching credits to its components. It is a key complement to the highly acclaimed student mobility programme Erasmus.

  1. Europass

Europass is an instrument for ensuring the transparency of professional skills. It is composed of five standardised documents

  • a CV (Curriculum Vitae),
  • a language passport,
  • certificate supplements,
  • diploma supplements, and
  • a Europass-Mobility document.

The Europass system makes skills and qualifications clearly and easily understood in the different parts of Europe. In every country of the European Union and the European Economic Area, national Europass centres have been established as the primary contact points for people seeking for information about the Europass system.

USEFUL LINKS

http://www.hungary.hu/ - Government of Hungry
http://www.kum.hu - Ministry of Foreign Affairs
http://www.onyf.hu/hu/ - Social Fund
http://www.oep.hu/ - Health Fund
http://www.gyogyinfok.hu/ - National Information Centre to the Ministry of Healthcare
http://www.nav.gov.hu/ - Administration for Taxes Control
http://www.oktatas.hu/kepesitesek_elismertetese/meik_oldalak  - Hungarian Information Centre for Academic Recognition

 

 

 

 

 

 

 

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