If you operate a company in Hungary, sooner or later you might need to make hires. Your employees can perform tasks essential to growing your business. To optimize your operation, make sure you keep in mind these 5 things before you make your first hire.
1. What do you need the employee for?
You do not probably need employees right from the start of your operation. If your registered seat is with a virtual office provider such as Helpers, several administrative tasks are already handled by the staff of the seat provider, such as sorting mail, forwarding it either to you or your accountant, and providing short English summaries whenever necessary.
When tasks start to grow beyond that:
- Make a list of tasks to be handled
- Consider how much time these take per week
- Consider what kind of skills they need
2. When will your employee work?
In Hungary, a full-time job means 8 hours a day and 5 days a week (usually Monday to Friday), making up 40 hours a week. “Normal” working hours are somewhere between 8 am and 6 pm; work in the evenings, over weekends, and on holidays might require a wage supplement. However, other working schedule schemes are also available. At the same time, employees must take at least 20 days each calendar year as a paid leave (or proportionately less if they start during the year) so they can keep up a healthy work-life balance, and you as an employer must consider how their work will be substituted for. Learn more here.
3. Where will your employee work?
Does your business have an office or a shop? Is it already equipped with the things your first hire will need to perform their tasks? Officially, you are required to provide all the tools necessary for working for your business. It is possible to have your employee work from home, but in that case you are still responsible for providing the right equipment and environment.
4. How to keep your employee productive?
Your business can thrive only if your employees are safe and healthy. In line with this, you must make sure that the working environment is safe enough for your employees and that they know how to keep it that way. Moreover, you should also get a doctor to check up on the health of your employees at least once a year.
5. What will your new hire cost you?
You will have to budget not only for appropriate equipment, but also for appropriate compensation. Whiles salaries in Hungary are usually determined by the required skills, you must also consider the current minimum wage, which is adjusted yearly. You will also pay a social contribution tax after each employee, which is 13% on top of their gross salary. Make sure you also consider wage supplements as necessary.
Employment and outsourcing
Consider whether it makes more sense to outsource tasks or to make your first hire. Especially at the start of your operation, administrative tasks such as mail forwarding and accounting are better handled by a provider. As your business picks up and the workload grows, at one point it will hit a limit when it is financially more reasonable to hire an employee. The aspects listed above can help you decide when you arrive at that point, and your accountant can do the math for you.
HR support from the Helpers Team
Before you make your first hire at your Hungarian company, consider the tasks at hand, your budget, and all the assets required to host your employee. When you do make a hire, all relevant aspects must be listed in a labor contract to clarify the rights and obligations of both employee and employer.
The Helpers Team provides comprehensive business support to foreign business owners in Hungary, which includes not only mail forwarding, accounting, payroll administration, and tax advisory, but also HR support, complete with customizable labor contract templates upon request. Should you need any assistance with growing your business, feel free to contact us.