Destinations Catalog

Hungary

Hungary
Population:
9 821 318
Capital:
Budapest
UTC:
+01:00
Ease of Doing Business Index:
42
Currency:
HUF ($1 = HUF 284.42)
Unemployment Ratio:
4.7%
Income Tax:
15%
Corporate Income Tax:
9%
Social Tax:
18.5%
Notice Period:
1-3 months
Dismissal Period:
From 15 days
Turnover Ratio:
$1645 million
Office Rent:
$8.30-$28.70/m2 + service charge at a rate of $1.40-$4.80/m2
IT Headcount:
150 000
IT Graduates:
6 500
Average Salary
Junior
Middle
Senior
Lead
$ 1 200
$ 2 700
$ 3 400
$ 3 700
English Level
High Proficiency
Main IT Outsorcing Destinations
Cities
IT Headcount
Main IT Outsorcing Destinations
Cities
IT Headcount
Hungary
Country Description

Hungary is a mid-size Central European country with the population amounting to almost 10 mln people. Hungary has become the European Union member in 2004 and has been part of the Schengen Area since 2007. These have made the country attractive for foreign investments and raised the local doing-business potential. Hungary is mainly viewed as an industrial country, however, the agricultural sector is also well-developed here. One of the specifics of the economy in Hungary which comprises a significant share of the budget is comparatively high taxes.

Population
9 821 318
Capital
Budapest
UTC
+01:00
Currency
HUF ($1 = HUF 284.42)
Ease of Doing Business Index
42
Unemployment Ratio
4.7%
Income Tax
15%
Corporate Income Tax
9%
Social Tax
18.5%
Notice Period
1-3 months
Dismissal Period
From 15 days
Turnover Ratio
$1645 million
Office Rent
$8.30-$28.70/m2 + service charge at a rate of $1.40-$4.80/m2
IT Headcount:
150 000
IT Graduates:
6 500
Average Salary
Junior
Middle
Senior
Lead
$ 1 200
$ 2 700
$ 3 400
$ 3 700
English Level
-------

*If you noticed an error or considered some information to be outdated, please, contact us at team@outsourcingreview.org

Country Description

Hungary is a mid-size Central European country with the population amounting to almost 10 mln people. Hungary has become the European Union member in 2004 and has been part of the Schengen Area since 2007. These have made the country attractive for foreign investments and raised the local doing-business potential. Hungary is mainly viewed as an industrial country, however, the agricultural sector is also well-developed here. One of the specifics of the economy in Hungary which comprises a significant share of the budget is comparatively high taxes.

Income Tax

Hungaian legisation envisages the following income tax rates:

  • The Personal Income Tax – 15%
  • The Corporate Income tax – 9%

Social Тax

Social Taxes in Hungary are paid by both employees and employers: the rates are 18.5% and 23.5% respectively.

Notice Period

The statutory notice period for dismissal by the employer shall be at least 30 days and its maximum is 90 days, depending on the length of the terminated employment (seniority of the employee). The notice period in case of dismissal by the employee is 30 days and it may not be extended. The employer and the employee may agree to a longer notice period in the employment agreement not exceeding six months. There is no statutory notice period stipulated by the Labor Code for summary dismissal, it may have an immediate effect. AS it has been stipulated by the Hungarian legislation “The notice period shall begin at the earliest on the day following the date when dismissal is communicated”. Where employment is terminated by the employer, the notice period shall begin at the earliest on the day after the last day of the following periods: duration of incapacity to work due to illness, not to exceed one year following expiration of the sick leave period; absence from work for the purpose of caring for a sick child; leave of absence without pay for providing home care for a close relative. The notice period is 30 days.

In case of employment being terminated by the employer, the 30 day notice period shall be extended:

  • by 5 days – 3+ years of employment,
  • by 15 days – 5+ years of employment,
  • by 20 days – 8+ years of employment,
  • by 25 days – 10+ years of employment,
  • by 30 days – 15+ years of employment,
  • by 40 days – 18+ years of employment,
  • by 60 days – 20+ years of employment

Upon the mutual agreement between the parties, the notice period may be extended up to six months.

Dismissal Conditions

As stipulated by the Labor legislation of Hungary, there are two kinds of dismissal:

  • dismissal - due to liquidation or bankruptcy of a business; unavailability to sustain an employee based on reasons tha do not depend on an employer;
  • summary dismissal - due to violation of the corporate rules and regulations; gross negligence; misbehavior; breach of work ethics;

These two kinds differ in the reason for dismissal as well as the dismissal period. Besides, the parties of the employment agreement are free to terminate the employment at any time by mutual consent. Furthermore, they may agree that for a period of up to one year the employment relationship may not be terminated by the dismissal of either party.

The right of summary dismissal shall be exercised within a period of 15 days starting on the day on which the employer takes knowledge of the grounds thereof, but not later than within 1 year of the occurrence of such grounds, or in the event of a criminal offense, up to the statute of limitation.

The Hungarian Labor Code obliges employers to provide the dismissal in a written form with well-grounded reasoning for employee's firing.

Hiring Period

Up to 3 months

Office Rent

The size of rent in Hungary is from $8.30/m2 till 28.70/m2 without VAT and service charge service charge at a rate of $1.40-$4.80/m2.

IT Headcount

IT headcount in Hungary exceeds 150K engineers. It’s really a huge number for this population size. What makes Hungary one of the most attractive nearshoring outsourcing destinations is the EU membership, vast talent pool and mid-level of the English language (one of the positive trends is that most young people are studying English, therefore). Moreover, Hungarian labor legislation is completely compatible with the European laws and standards, therefore; the country is in high demand among Europe’s businesses amidst the rest of IT outsourcing destinations in Eastern Europe. Probably, owing to these factors, the industry generates almost 10% of the annual Hungary’s GDP. Such giants as Lufthansa, IBM, EPAM Systems, Microsoft, Nokia, and HP chose cooperation with the local IT specialists. Besides the global companies, there are numerous IT market players of the local scale. IT Services Hungary is the largest IT outsourcing company that employs over 4,000 specialists and has offices in the main IT hubs of the country.

IT Graduates

Every year more than 6.5 thousand student graduate from the universities and faculties providing education in the sphere of IT technologies and development. The most popular institutions are:

  • Budapest Metropolitan University
  • The University of Pécs
  • The University of Debrecen
  • Óbuda University
  • Dennis Gabor College
  • Eötvös Loránd University

According to the local reports, the technical education in the country is too general (although it provides great background knowledge useful for future advanced learning of the specific sphere), therefore, if an IT-specialist-to-be wants to learn something narrower or precise, he/she is more likely to start taking certain classes out of the formal state higher education. It is obvious that joining certain courses would be more useful since such education is more individual-oriented and specific; it applies modern methods of teaching, numerous practical tasks, and opportunities to work on real projects.

Average Salary

Hungarian companies do have a high value for their specialists, therefore a vendor is most likely to charge at least $40/hour. Average salaries for software developers are as follows:

  • Junior Software Engineer – $1200
  • Middle Software Engineer – $2700
  • Senior Software Engineer – $3400
  • Technical Lead – $3700
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*If you noticed an error or considered some information to be outdated, please, contact us at team@outsourcingreview.org