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What are the social charges for companies in Hungary? All Know Social Security Charges Hungary

Introduction

Hungary is a Central European country that is attracting more and more foreign investors thanks to its favorable economic environment. However, before settling in Hungary, it is important to understand the social charges that companies have to pay. In this article, we will review company social charges in Hungary and provide useful information for foreign investors.

Social charges in Hungary

In Hungary, social charges are compulsory contributions that employers have to pay for their employees. These social contributions are divided into two categories: employer social contributions and employee social contributions.

Employer social charges

Employer social charges are contributions that employers must pay for their employees. These social charges include:

Contribution to health insurance: this contribution is 14% of the employee's gross salary.
Contribution to pension insurance: this contribution is 20% of the employee's gross salary.
Contribution to unemployment insurance: this contribution is 1,5% of the employee's gross salary.
The contribution to work accident insurance: this contribution varies according to the risk of work accident in the company.

Salary social charges

Payroll taxes are contributions that employees must pay on their gross salary. These social charges include:

Contribution to health insurance: this contribution is 7% of the employee's gross salary.
Contribution to pension insurance: this contribution is 10% of the employee's gross salary.

Tax benefits for companies in Hungary

In addition to social charges, companies in Hungary can benefit from tax advantages. These tax benefits include:

The corporate tax rate

The corporate tax rate in Hungary is 9%. This means that businesses in Hungary pay one of the lowest corporate tax rates in Europe.

Tax credits

Companies in Hungary can benefit from tax credits for investments in research and development, vocational training and employment of disabled people.

Special Economic Zones

Companies locating in special economic zones in Hungary can benefit from additional tax advantages, such as reduced tax rates and exemptions from social charges.

Challenges for businesses in Hungary

Although Hungary offers a favorable economic environment for businesses, there are also challenges for companies locating in Hungary. These challenges include:

The bureaucratie

The bureaucracy in Hungary can be a challenge for foreign companies that are not used to administrative procedures in Hungary. Businesses must be prepared for longer administrative delays and more stringent documentation requirements.

The shortage of skilled labor

Hungary suffers from a shortage of skilled labor in certain sectors, such as engineering and information technology. Companies must be prepared to invest in training their staff to fill this gap.

Competition

Competition in Hungary can be intense in certain sectors, such as retail and hospitality. Companies must be prepared to offer high quality products and services at competitive prices to succeed in the Hungarian market.

Conclusion

In conclusion, company social charges in Hungary are mandatory contributions that employers have to pay for their employees. These social charges are divided into employer social charges and employee social charges. In addition to social charges, companies in Hungary can benefit from tax advantages such as low corporate tax rates, tax credits and special economic zones. However, there are also challenges for businesses in Hungary, such as bureaucracy, shortage of skilled labor and competition. Businesses moving to Hungary must be prepared to face these challenges in order to succeed in the Hungarian market.