Spotlight on Hungary – A guide to implementing employee benefits technology

Hungary is quickly establishing itself as a popular location for global investment, particularly in technology and professional services. Its highly skilled workforce is attracting employers who are competing to offer standout benefits and retain top talent. 

As the local demand for talent grows, employers are stepping up their benefits offerings. This surge in benefits has led to greater choice and flexibility for employees, with many companies adopting quick-service-style options that cater to diverse needs.  

In particular, organisations aiming to attract and retain younger employees are prioritising  personalised, relevant benefits that resonate with their lifestyle and career goals. 

Mandatory benefits in Hungary 

Social security 

Hungary’s social security system provides comprehensive coverage for employees, including protections for sickness, maternity, old-age, invalidity, occupational diseases and injury, accidents at work, survivorship, children’s education and unemployment.  

Employers contribute 13% of an employees’ salary, while employees pay 18.5%, which goes towards state pension, healthcare and sickness absence cover.  

Core benefits in Hungary 

Health insurance 

Health insurance is a valued benefit in Hungary, typically funded by both employer and employee. Flex Funds are often used to provide additional cover or to include dependants. However, a 33.04% tax on private medical insurance can be a deterrent for employers. 

Due to the lengthy wait lists in public hospitals, private healthcare is a popular alternative, often covered by the employees’ insurance plans. 

Health plans 

In cases where employers do not offer full medical insurance, health fund plans are a common substitute. These plans provide employees with an allowance to cover health expenses, although unfavourable taxation (equivalent to salary taxation) has reduced their popularity.  

Life insurance 

Life insurance, usually paired with accident and disability coverage, is becoming a standard offering among most international companies. Typical coverage ranges from two to three times the employees’ annual salary, with higher coverage offered by companies seeking to exceed market expectations.   

Accident and disability (as a lump sum payment) is also a very common benefit option. This is included as an add on to the employees’ life plan for a similar level of cover. 

Pension plans 

Hungary’s state pension system is mandatory, and private or supplementary pensions plans are less common. However, employers looking to provide above-market benefits are beginning to introduce them (see below). 

Popular benefits in Hungary 

SZÉP card 

The SZÉP card, short for Széchenyi Pihenőkártya or Széchenyi Recreation Card, is one of the most popular benefits in Hungary. Almost universally expected by employees, the card allows employers to provide a sum of money that employees can use for various expenses, including: 

• Hot meals 

• Holiday accommodation 

• Leisure activities, such as gym memberships, sports facilities, museum and art gallery visits and days out 

• Grocery shopping 

With favourable taxation (28% for amounts up to HUF 450,000 annually), the SZÉP card is both cost effective for employers and highly valued by employees.  

Travel allowances 

Travel allowances are widespread, and in some cases, compulsory. Employers are required to reimburse 86% of commuting costs (up to HUF 56,240 per month) for employees where: 

• The commuting departure and arrival points are in different municipalities (unless the employee is unable to use local or regional public transport) 

• The travel is work-related and involves the use of national, regional, or local public transport 

Employers must reimburse HUF 30 per kilometre in respect of commuting costs where the employee’s personal vehicle is used to commute, and: 

• There is no public transport available, or 

• An unreasonable long wait would occur if the employee used public transport, or 

• The employee is prevented from using public transport due to a disability, or 

• The employee has a child under age 10 

While company cars or car benefits are rare outside senior management, commuter allowances are an attractive alternative for employees in more remote areas. 

Supplementary pension plans 

Although still limited to about 25% of international companies, interest in supplementary pensions is growing. Employer contributions typically range from 2% to 6% of total pensionable salaries, with employees often encouraged to contribute as well.  

This is subject to a maximum of 50% of the minimum wage to avoid higher taxation; amounts above this are treated as salary for tax purposes. 

Holiday buying 

The option to purchase additional holiday days is growing in popularity, especially among younger workers. While still offered by less than half of employers, multinationals are increasingly adopting this benefit, typically allowing employees to buy up to three additional days of leave. 

Tax free benefits  

Other tax free benefits include: 

• Kindergarten or nursery allowances, provided by around 25% of employers 

• Lunch vouchers, offered by c.75% of employers without on-site canteen facilities, often used alongside the SZÉP card 

Trends and challenges in Hungarian employee benefits 

Personalisation and flexibility 

Employees increasingly expect benefits tailored to their lifestyles. Flexible benefits, such as allowances via the SZÉP card or flex funds, allow employees to choose what matters most to them, whether it’s health insurance, additional pension contributions, or leisure activities.  

Supporting mental health 

With growing awareness of mental health, employers are enhancing their support offerings, from counseling to stress management resources. 

Addressing diverse workforce needs 

Employers face the challenge of catering to a diverse workforce spanning different age groups and industries. Younger workers often gravitate toward tech-savvy companies with innovative benefits, while older employees may prioritize traditional offerings like pensions or life insurance. 

Embracing technology 

Hungary’s tech-savvy workforce expects seamless digital experiences, making employee benefits platforms an essential tool for employers. Centralising benefits in one place not only streamlines administration, but also creates a better employee experience. 

Local-specific benefits 

Employers offering locally relevant perks, such as discounted theatre tickets, sports club memberships, or museum passes, are finding success in engaging their workforce. 

To learn more about how a global benefits platform can help you deliver a seamless employee experience in Hungary, and around the globe, download ‘Your guide to global benefits tech’, or speak to one of our benefits experts.