labour market

Guest worker situation after regulations change in Hungary: What companies can expect

According to the Official Gazette published last Thursday, the government has included the Republic of the Philippines in the new list of countries from which foreign workers can continue to arrive in Hungary. “The decision is a major relief for companies. In addition to being the next largest proportion of guest workers after Ukrainians, the number of guest worker permits issued to them each year is growing most dynamically. At the same time, companies with a larger number of Kyrgyz, Mongolians and Kazakhs will have to rethink their sources of staffing needs after the current permits expire,” says Magdolna Mihályi, Managing Director of Jobtain HR Services.

The government amended its regulation on the employment of foreign workers in Hungary over Christmas. Under the changes, the maximum number of guest worker residence permits and residence permits for employment purposes that can be issued has been capped at 35,000 in 2025. At the same time, the list of third countries from which foreign workers can be imported has been significantly reduced.

Far fewer countries to send guest workers in 2025 than before

According to the decree, as of 1 January, nationals of Ukraine, Serbia, Bosnia and Herzegovina, the Republic of North Macedonia, the Republic of Belarus, Moldova, the Republic of Montenegro and the Russian Federation will continue to be employed as guest workers in Hungary with a National Card. Georgia and Armenia, and, under Thursday’s decision, the Republic of the Philippines, as new countries, are now allowed to work as guest workers or with a residence permit for employment purposes.

“In September 2024, the Philippines opened its office in Hungary – Labor Office of the Philippine Embassy – where they will represent the interests of Filipino workers working in Hungary and in the neighbouring countries and ensure full compliance with the requirements of the Hungarian Government, if necessary,” said Magdolna Mihályi. She adds that the Philippine Government attaches the utmost importance to ensuring that its nationals working abroad comply with the labour and immigration laws of the host country during the period of their residence permit.

Other possibilities for the importation of guest workers

In the future, guest workers can only be imported from a country with which Hungary or the European Union has a readmission agreement or which has a state-recognised organisation in Hungary that can arrange for the third-country guest worker to leave Hungary and return to their home country if necessary. “It is also very important to underline that those who have been working in Hungary with a valid permit on 31 December 2024, or who have applied for this permit by the last day of the year and the administrative fee has been paid after them, can complete their contract and receive the 1-year extension. Thus, the employment of previously contracted foreign workers will not be terminated immediately. This means that companies will have enough time – up to 1-2 years – to prepare for the employment of nationals of another nation, should the need arise. Foreign labour can continue to be brought in for priority investments in the national economy without restriction. South Korean and Chinese companies are likely to continue to make use of this possibility,” said the Jobtain expert.

Hungarian labour pool can still be mobilised, but guest workers are needed

There are currently around 4.7 million Hungarian workers in the country. However, many more people are leaving the labour market than entering it: 140-180 thousand are leaving and only 90-100 thousand are entering. “With almost full employment, it is difficult to find new domestic resources, although there are still some groups that can be mobilised. In line with the government’s strategy, temporary employment agencies are also focusing on retaining Hungarian nationals and increasing their numbers, but we cannot completely abandon the import of guest workers. And with the planned economic recovery, there will be an even greater need to employ foreign workers subject to strict rules,” stresses Magdolna Mihályi.

Although firms’ demand for labour has fallen somewhat recently due to low economic growth, there is still a significant demand for labour in certain industries. Examples include the food and pharmaceutical industries. “As the economy picks up again, it is likely that the manufacturing and hotel industries will again face significant shortages. Third-country migrant workers are typically currently working in jobs where it is already very difficult to find Hungarian workers,” Jobtain’s CEO concludes.

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January 15, 2025

Many Hungarians commute, becoming the largest group of foreign workers in Austria

The number of Hungarian residents working abroad exceeded 122,000 in 2022, accounting for 2.9% of Hungary’s workforce. Austria has become a top destination, with a significant portion of Hungarian commuters finding employment there. In mid-2022, over 130,000 Hungarians were employed in Austria, surpassing Germans to become the largest group of foreign workers in the country. Approximately half of these workers commute daily from Hungary.

According to Növekedés, Hungarians are increasingly flexible when seeking better job opportunities. According to Hungary’s Central Statistical Office (KSH), around 2 million people worked outside their home municipality in 2022, a significant rise from 1.3 million a decade earlier. While most commuters remain within Hungary, many choose cross-border employment, particularly in neighbouring countries.

Popular destinations for Hungarian commuters

Austria is the leading destination for Hungarians working abroad. However, border regions see additional movement:

Northern towns in Borsod-Abaúj-Zemplén County often send workers to Košice, Slovakia.
Southeastern areas in Hajdú-Bihar County have many residents commuting to Oradea, Romania.

In some Hungarian border towns, commuters make up as much as 80% of the local workforce. Notably, cross-border commuting is not limited to border regions; in counties like Jász-Nagykun-Szolnok, a significant number of people work abroad.

European trends in cross-border commuting

Hungary’s cross-border commuting figures align with EU trends. According to Eurostat, Slovakia has the highest share of cross-border workers in the EU, at 5%. Estonia, Luxembourg, and Croatia follow, each at 3%. Most commuters work in sectors like manufacturing and construction for men, and healthcare for women.

Internal commuting in Hungary

Budapest remains Hungary’s primary employment hub, attracting workers from all regions, especially from nearby Pest County. However, many city residents also commute to surrounding suburban areas. While Budapest has the largest workforce catchment area—covering 169 settlements—other cities like Miskolc and Pécs also have extensive commuter zones, each encompassing over 100 settlements. Foreign employment is particularly prevalent in Western Hungary, where cross-border opportunities are most accessible. Despite this, Budapest continues to dominate as the domestic employment centre.

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January 15, 2025

2025: A year for families and SMEs, says Hungarian economy minister

HUF 10000 Hungarian banknote forint economy

National Economy Minister Márton Nagy said 2025 would be the year of families and SMEs at a press conference opening the new year in Budapest on Tuesday.

Nagy said households had felt the positive turnaround from September already and the trend would continue in 2025. He added that the ministry would closely track employment, wages, household consumption and borrowing, stability, and the situation in the home and car markets to ensure an uninterrupted advance.

In the case of SMEs, he said a pickup in lending would be key, adding that the endeavour would require the participation of the banking system and possibly assistance from the central bank. He pointed to the need to strengthen trust and cooperation between the state and the SME sector. Nagy acknowledged a slight increase in Hungary’s state debt, relative to GDP, in 2024, but said both state debt and the budget deficit were on the decline in 2025.

He estimated GDP growth reached 0.5pc-0.6pc in 2024, worse than expected, but a positive turn had taken place in the fourth quarter. He put this year’s GDP growth at 3.4pc. The labour market is stable and the number of inactive Hungarians is at a historic low, he said, adding that a minor increase in the jobless rate was no reason for concern. He projected real wage growth of 4-5pc in 2025 and said that increase would have a broad impact well beyond high earners. He noted that real wages had climbed for 82pc of full-time workers.

Nagy said household consumption could climb by 5pc in 2025, adding that retail borrowing would be “very strong”, boosted by unsubsidised loans, too. The number of new home constructions is set to climb, supported by government capital schemes, he said. Amid reduced demand, Nagy said it would pay off for SMEs to boost productivity, cut costs or digitalise.

Addressing the merger of the Finance Ministry with the National Economy Ministry, Nagy said the government would continue to exercise fiscal discipline. He said the relationship between the National Economy Ministry and the National Bank of Hungary (NBH) would be “completely different” after the new central bank governor took his post. The NBH’s approach is expected to change after Mihály Varga‘s arrival, he added.

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January 15, 2025

Guest workers update: Filipino workers continue to have access to Hungary despite no formal agreement

Despite there being no formal repatriation agreement between Hungary and the Philippines, Filipino guest workers can still be employed in Hungary. This was confirmed in a foreign ministry statement published in the Official Bulletin on Thursday evening.

According to Telex, under Hungary’s new 2024 regulation on guest workers, employees from non-EU countries can be hired, provided that their country of origin has a formal agreement allowing their return in case of expiration of stay or legal violations. However, no such agreement exists between the Philippines and Hungary or the European Union.

The Philippines has long been a significant source of guest workers to the EU, including Hungary, with labour brokers keen to maintain this flow. The regulation provides a provision allowing workers from countries without a repatriation agreement to be employed, as long as their country has a recognised organisation or office in Hungary that guarantees the worker’s repatriation. According to the Ministry of Foreign Affairs, the Philippines is the only country currently on this list, with an established office in Hungary that ensures the return of its workers if necessary.

Read more news concerning guest workers in Hungary HERE.

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January 9, 2025

Success: Hungary records lowest December jobseeker numbers in over 3 decades

According to data from the National Employment Service (Nemzeti Foglalkoztatási Szolgálat, NFSZ), in December 2024, only 220,800 people were listed in the job seeker register, representing a decrease of more than 4,000 compared to the same period of the previous year. The number of job seekers also fell by more than 4,000 compared to the preceding month. This was highlighted in a statement issued on Wednesday by Sándor Czomba.

The State Secretary for Employment Policy at the Ministry of National Economy (Nemzetgazdasági Minisztérium, NGM) emphasised that the improvement of the Hungarian labour market is reinforced by the increased economic activity of the 15-64 age group and the growing willingness to work among retirees. These factors collectively contribute to more Hungarians joining the labour market, which has expanded by 1 million people since 2010. The December figure was the lowest for the month in more than three decades, Sándor Czomba said.

The government continues to prioritise supporting job seekers. The Youth Guarantee Plus (Ifjúsági garancia plusz) programme assists individuals under 30, while another EU-funded project provides support for job seekers over 30. Both initiatives aim to facilitate employment through wage subsidies, housing, and travel reimbursements. With the help of these programmes, around 27,000 job seekers have already found employment in the labour market, the State Secretary stressed.

The government is working to ensure families have higher incomes. As part of the 21-measure New Economic Policy Action Plan (Új gazdaságpolitikai akcióterv), a three-year wage agreement has been established, which will increase the minimum wage by 40% by 2027: this year by 9% to HUF 290,800 (EUR 700), in 2026 by 13% to HUF 328,600 (EUR 791), and in 2027 by 14% to HUF 374,600 (EUR 902). To support employers paying minimum wages, the government will allow them to “defer” the payment of the increased social contribution tax. In 2025, they will pay the 2024 rate; in 2026, the 2025 rate; and in 2027, the 2026 rate. The State Secretary reminded the public of this adjustment.

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January 8, 2025

Hungary lowers guest worker cap, 10 countries on the banned list

Hungary has lowered the cap on the number of guest work permits issued to non-European Union nationals to 35,000 for 2025 in a decree issued by by the national economy minister.

Guest worker cap in Hungary

The new cap was set prioritising the protection of Hungarian families, employees, and the labour market, the National Economy Ministry said in a statement.

The ministry noted that the cap was less than half of the regulatory maximum: the average number of unfilled workplaces in the previous four quarters, or 71,000, according to data from the Central Statistics Office (KSH).

There is no doubt how many inactive reserves there are in Hungary and how to attract them into the labour market.

As we have already reported, in a village in Somogy County, Filipino guest workers are milking cows.

Filipino workers step in to milk cows in a small Hungarian village

The phenomenon is not unique and points to a deeper problem: in many cases, no reliable Hungarian workers who could be hired for a particular job were found either locally or from the surrounding area. In contrast, behind the tightening is the government’s consistent policy of filling vacancies by activating the Hungarian labour reserve and attracting jobseekers and inactive people.

Viktor Orbán said in a Facebook post on the subject. Therefore, we will not let migrants in, and only as many guest workers as we need.”

Mr Orbán also noted that the Qatari model had been copied and modified, but that the essence of the regulation came from there. The Hungarian PM pointed out that all countries have been given a transitional period to create legislation on readmission, and our country will not accept those who fail to do so. Accordingly, ten countries were immediately removed the list, so that no guest workers can come from them. The government has not named the 10 countries, but we will inform our readers as soon as it becomes available to the public.

As we reported earlier, the amendment, published in the Hungarian Gazette on the night of 23 December, states that third-country nationals may be employed in Hungary if Hungary or the European Union has a readmission agreement with that country.

Two countries are mentioned in the Annex as exceptions, Georgia and Armenia. The Regulation does not apply to the renewal of permits issued until 31 December 2024. Neither will it apply to pending cases that have already commenced.

Orbán told a press conference that there is a quota, 65,000 last year and only 35,000 this year, under which guest workers can arrive. The government believes there are still 300-500,000 people who can be brought into the labour market in Hungary. The final decision on how to do this will be taken in January-February.

Emigation, low-wage policy

Another issue is that the Orbán government, which has been in power for 14 years, has failed to stop the emigration of Hungarian workers abroad. There are still hundreds of thousands of valuable workers in Western Europe because Hungarian wages cannot compete with those in Germany or Austria, for instance.

However, the Hungarian government does not intend to change its low-wage policy, because this is how they can attract foreign investors, who receive huge subsidies if they come here, and can operate here at a discount, with low wages and a high-quality workforce.

There is also the serious question of where the labour of the foreign factories attracted here will be filled, because labour shortages are already being experienced in many sectors, and this will exacerbate the problem by the opening of more factories.

Draconian measures for guest workers to be implemented in Hungary from 1 January, details HERE

December 30, 2024

Draconian measures for guest workers to be implemented in Hungary from 1 January

Draconic strictness comes in Hungary concerning guest workers from 1 January

Even though multiple officials of the Orbán cabinet have acknowledged the importance of guest workers in Hungary, the Hungarian government seems determined to stop the inflow of third-country workers from 2025. The first leaked news was about cutting the number of issuable work permits to non-EU nationals to almost zero. Following the first shock and the start of lobbying from enterprise owners, the original initiative softened. However, the changes are still considerable.

Anti-migration government accepts guest workers in large numbers

Starting in 2025, coming to Hungary to work as a non-EU citizen will not be easy. The number of such workers exceeded 80 thousand in Hungary, a country where the government campaigned and won three consecutive landslide victories with its anti-migration policies in the last decade. The original slogan was stopping migration and preventing migrants from taking the Hungarian people’s work.

However, many things have changed in the last few years due to the labour shortage Hungary’s market players face due to low salaries. Talented and hard-working Hungarians leave to earn more in Western Europe. However, the remaining workforce is not trained enough or capable of using the latest technologies in the country’s emerging manufacturing sector.

Debrecen BMW plant construction reaches important milestone guest workers — Illustration. Photo: MTI

Therefore, investors building plants and factories in Hungary due to the low corporate taxes were unable to hire enough workforce, so they depended on bringing foreign employees, mostly from Asia. The result is that, for example, Indian and Filipino workers dominate Hungary’s dairy sector.

The Hungarian government decided to introduce draconic rules

Following criticism from Fidesz grassroots and amid a deepening economic crisis, the Hungarian government decided to cut back the number of available work permits for non-EU residents drastically. First, news emerged about granting such permits only to Georgian nationals since Georgia is the only country Hungary signed a readmission agreement with.

On Tuesday, the Ministry of National Economy wrote about a maximum of 35,000 work permits entitling the owner to reside in Hungary. The Orbán cabinet said such a modification is needed for the protection of the workplaces and Hungarian families. It is important to highlight that the new rules will not change the working conditions of those who are already here and working with a permit.

guest worker from india hajdúnánás — PrtScr/ATVnews

According to Tőzsdefórum, such work permits will only be available for non-EU residents if the vacant position cannot be filled by the Hungarian workforce. The basis of the 35,000 is the number of vacant positions in 2024 Q4, which was above 71 thousand.

Tax benefits narrowing for 3rd-country guest workers

The Hungarian prime minister expressed before that his government does not want Hungary to become a “migrant country”.

We wrote earlier that the government would decrease the tax benefits guest workers are eligible for. As a result, 3rd-country workers will earn less after 2025. The only exceptions are guest workers coming from neighbouring countries like Ukraine and Serbia.

On the other hand, from January, Vietnamese, Indian, Indonesian, Kyrgyz, Uzbek, Venezuelan, Montenegrin, Filipino, etc. workers may earn less. They will no longer be eligible for family tax allowance, the allowance for young couples in first marriage, and the tax benefits for employees under 25.

Read also:

Tax benefits change, 3rd-country guest workers will earn less in 2025 in Hungary!
HERE is how the enterprises reacted to the cutback
Shocking proposal: Hungary plans ban on non-EU guest workers starting 1 January

Featured image: depositphotos.com

December 27, 2024

Planned guest worker ban linked to Hungarian government’s fears of rising unemployment?

Recent reports suggest that the Hungarian government may be planning to implement a ban on employing guest workers from non-EU countries, effective 1 January 2025. This move has sparked concern among local businesses, particularly those that rely heavily on foreign workers. While the government has not officially confirmed the proposal, industry leaders are speculating that rising unemployment rates may be the driving force behind this drastic measure.

As we reported before (HERE and HERE), sources indicate that, under the new policy, workers from most non-EU countries would no longer be eligible for new work permits, with the notable exception of those from Georgia. The measure would also prevent the extension of work permits beyond the current one-year option for workers who were initially granted two-year permits. This potential legislation has left businesses, especially in sectors like manufacturing, logistics, and delivery services, anxious about the future of their workforce.

No consultation between government and businesses

The government’s decision to introduce this policy with minimal consultation has caused confusion and panic among company leaders. Some have speculated that the government is attempting to preemptively tackle expected increases in unemployment in the coming months, 24.hu reports. Concerns are rising that, as the economic situation worsens, local workers may begin losing their jobs, and the government may want to avoid visible signs of foreign labour filling those gaps.

For companies like Master Good, which depend on a significant number of guest workers, the move could have dire consequences. Without guest workers, these companies fear that growth could be unsustainable, and current production levels may even decrease.

Though the details of the proposed regulation remain unclear, the rapid, potentially disruptive change is concerning for many businesses. Company executives argue that such a sweeping policy change cannot be implemented without proper discussion and a reasonable adjustment period. Given the economic challenges already facing Hungary, they worry that restricting guest worker employment could further harm the economy, potentially causing a significant downturn in the country’s GDP.

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December 21, 2024

Shocking proposal: Hungary plans ban on non-EU guest workers starting 1 January

The Hungarian government is poised to implement significant restrictions on the employment of non-EU guest workers, starting 1 January 2025, according to 444.hu. A proposal to tighten regulations could be discussed at Wednesday’s cabinet meeting, marking a sharp shift in policy. The move aims to address growing domestic discontent over the increasing presence of foreign workers.

Key measures in the proposal

As to 444.hu reports, under the draft regulation, no new work permits would be issued to third-country nationals, except those from Georgia. Additionally, existing two-year work permits with a one-year extension option would lose this renewal flexibility. The new rules could effectively ban non-EU workers from Hungary, with only minimal exceptions.

Political pressure and public sentiment

The issue was a focal point during Monday’s parliamentary session. László Toroczkai, leader of Mi Hazánk, criticized the surge in guest workers, highlighting their dominance in food delivery jobs and accusing the government of prioritising foreign employment over opportunities for Hungarians. Prime Minister Viktor Orbán responded firmly, asserting:

“If their working hours are up, they must leave the country… As long as I’m Prime Minister, all guest workers will go home.”

Sources suggest the decision is largely political, driven by complaints from influential Fidesz politicians representing rural areas. They face mounting pressure from voters who are uneasy about the sudden influx of guest workers. Concerns include fears over public safety and the perception that foreign labour is taking jobs from locals.

Efforts to delay implementation

The proposal has already sparked behind-the-scenes lobbying. Some are pushing for a later implementation date—1 July 2025—while others advocate for exceptions for workers from countries like the Philippines, a significant source of labour for Hungary in recent years.

Context: Hungary’s guest worker market

Hungary already has the strictest guest worker regulations in Europe, as Orbán emphasised in parliament. If enacted, these new measures would solidify its position further, signalling a strong stance against labour migration from outside the EU.

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December 18, 2024

Rate of Hungarian wage increase in Q3 third highest in EU

In the third quarter of 2024 the pace of wage increases in Hungary, compared to the same period of last year, was the third highest in the European Union, business news site portfolio.hu said on Tuesday quoting data from Eurostat.

Eurostat data show that in Q3 2024 the hourly labour costs rose by 5.1pc in the EU, compared with the same quarter of the previous year. The costs of hourly wages and salaries increased by 5.0pc and the non-wage component increased by 5.3pc.

In Q3 the highest increases in hourly wage costs for the whole economy were recorded in Romania (+17.1pc), Croatia (+15.1pc), Hungary (+14.1pc).

The non-wage component in Hungary was up 12.8pc in the third quarter, the sixth highest number in the EU. Hourly labour costs were up 13.9pc, again the third highest rate.

Hungary falls behind as Romanian and Bulgarian wages surge

In recent years, few economic indicators have captured Hungarian public attention as much as those showing Romania not only catching up to but surpassing Hungary. Two key metrics often cited are GDP per capita adjusted for purchasing power parity (PPP) and household consumption levels. Both reveal Romania’s significant progress over the past decade within the EU rankings.

For those seeking to maintain the perception of Hungary’s economic advantage, fewer and fewer data points remain convincing. However, the macroeconomic figures also hide contradictions—most notably, that Romania’s progress has not been equally shared across its society.

The rise of Romania’s wealthiest

According to the report of G7, over the last decade, Romania’s top earners have made significant strides within EU income rankings. In contrast, middle-class gains have been more moderate, and the poorest 25% of the population remain largely stagnant. EU-wide income percentile rankings illustrate this disparity by ordering the incomes of all EU citizens and comparing individual country groups to the EU average.

For instance, in Hungary, the 90th income percentile moved slightly forward between 2020 and 2023, ranking ahead of 29% of EU earners compared to 28% in 2020. Full convergence, however, would require Hungarian groups to match or exceed their EU counterparts’ rankings—for example, the Hungarian 90th percentile would need to rank above 89% of EU earners.

Romania has exhibited a similar pattern in recent years, with the greatest gains among the upper and middle-income groups. Only the poorest fifth of Romanian society remains firmly at the bottom of EU rankings. In euro terms, which exclude local cost-of-living adjustments, the income growth among Romania’s higher earners is even more pronounced, highlighting a tangible improvement in living standards.

Bulgaria closes the gap

Bulgaria’s standard of living historically attracted little attention in Hungary, but Romania’s leap has shifted the focus. Bulgaria recently surpassed Hungary in household consumption levels (adjusted for PPP), aided by Hungary’s record-breaking inflation. From 2020 to 2023, Bulgaria’s top-earning 50% also advanced significantly in EU rankings, with the wealthiest Bulgarians already ranking among Europe’s highest earners since the start of the decade.

However, PPP-adjusted income data should be viewed cautiously, as figures for both the wealthiest and poorest segments are often less reliable. Still, in euro terms, only the top third of Bulgaria’s population has seen a relative improvement in the EU income rankings.

A three-way competition

In Hungary, only the top 15% of earners saw progress between 2020 and 2023, while lower-income groups largely slipped in the EU rankings. Comparisons between Bulgaria, Hungary, and Romania reveal that Hungary’s advantage now persists only among its bottom 45% of earners,

while the wealthier 55% of Romanians and Bulgarians have overtaken their Hungarian counterparts.

Hungary still holds a slight lead in EU income rankings when measured in euros, disregarding local cost-of-living differences. Government-aligned analysts often emphasise this comparison to downplay Romania’s progress. However, this approach becomes less favourable when Hungary’s figures are compared with those of higher-cost, more developed countries, where Hungary’s lag is even more apparent.

The future of convergence

The rapid pace of convergence in Romania and Bulgaria is undeniable. While their progress is most visible when adjusting for purchasing power, middle-income groups in all three countries now enjoy broadly similar living standards. As these trends continue, the disparities that once defined economic rankings within the region are diminishing, leaving Hungary’s economic edge increasingly tenuous.

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December 17, 2024

The influx of guest workers in Hungary decreased significantly this year

The landscape for guest workers in Hungary is undergoing a significant shift as economic challenges and stricter regulations reshape labour demand. While the influx of foreign workers has slowed, key sectors like logistics and hospitality still rely heavily on overseas labour, highlighting the growing complexities of Hungary’s workforce dynamics.

Number of guest workers in Hungary faces a major shift

As Portfolio reports, the influx of guest workers in Hungary has shown a notable shift this year, as economic challenges have caused the steady rise in numbers to plateau. According to the Hungarian Central Statistical Office (KSH), nearly 100,000 foreign workers were recorded in autumn, reflecting a decrease in growth.

Magdolna Mihályi, managing owner of Jobtain HR Services Ltd., explained that while the import of foreign workers continues, it has slowed due to a 5% drop in industrial production compared to last year. Factors contributing to this slowdown include a recession in the automotive sector, reduced investment, and stricter government regulations on foreign labour assessments. Additionally, Hungarian labour reserves are being mobilised more actively, further influencing the demand for foreign workers.

What is fueling the change?

Magdolna Mihályi of Jobtain HR Services Ltd. highlighted several factors behind the trend described above, including a sharp decline in investments, a recession in the automotive sector, and stricter government regulations on foreign labour assessments. Similarly, József Nógrádi, Commercial Director of Trenkwalder, noted a 25% drop in the inflow of foreign workers compared to last year, attributing it to European economic stagnation and tighter Hungarian policies. With domestic worker recruitment on the rise and existing guest workers filling critical roles, demand for foreign labour has fallen by 30% compared to the previous year. Stricter regulations have also improved transparency and eliminated exploitative practices, contributing to a more regulated labour market.

Struggling sectors

The demand for guest workers in Hungary is shifting as economic conditions vary across industries. While the automotive and construction sectors face redundancies, logistics, transport, and food continue to attract workers, particularly from the Philippines, Vietnam, India, and Indonesia. Despite efforts to mobilise domestic workers, labour shortages persist in hospitality, IT services, and waste processing. Experts note that Hungary’s declining working-age population and nearly full employment make foreign labour indispensable, though future demand depends on economic recovery and government policies. With strict regulations, the number of guest workers in Hungary is expected to stabilise around 150,000.

Hungary's dairy farm industry dominated by Phillipine, Indian, and Sikh guest workers — Photo: depositphotos.com

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December 16, 2024

Many tax benefits will no longer apply to third-country nationals in Hungary from 2025

Hungary’s tax laws offer various tax benefits to eligible residents, with significant updates recently affecting third-country nationals. While the family tax allowance was accessible to many, offering substantial support based on the number of dependants, changes coming into effect from 2025 will exclude third-country nationals from several key allowances.

Tax benefits in Hungary

In Hungary, third-country nationals were eligible for certain tax benefits, particularly the family tax allowance, provided they met specific conditions. To qualify, at least 75% of their annual income had to be taxable in Hungary, and they should not have received similar benefits from another country for the same period. The family tax allowance was available for dependants, including children eligible for family support and unborn children during pregnancy.

The allowance amount varied based on the number of dependants, with increased benefits for permanently disabled or severely ill children. This allowance could be claimed either through an employer’s tax advance declaration or during the annual tax return process. However, since August 14, 2023, third-country nationals are no longer eligible for the social contribution tax allowance that employers could previously claim for newly entering the labour market.

Big changes in 2025

The recent amendments to the Hungarian income tax laws, as outlined in the Magyar Közlöny, introduced several significant changes affecting third-country nationals. One of the key updates is related to the family tax allowance, which has been adjusted to provide increased financial support based on the number of dependants. For instance, the allowance for one dependant rose to HUF 133,340 (EUR 325.25), while for two dependants, it increased to HUF 266,660 (EUR 650.47), and for three or more dependants, it reached HUF 440,000 (EUR 1,073.30) per month.

The amendments specified that both EEA citizens and citizens from non-EEA countries bordering Hungary are eligible for these tax benefits. However, it is important to note that third-country nationals are no longer eligible for social contribution tax allowances that were previously available to employers hiring new workers from outside the EU. From 1 January 2025, they will no longer be eligible for the tax credit for starting a life. However, it is still not clear whether third-country nationals would be still eligible for the family tax allowance.

We will keep our readers updated on the topic as we gain more information.

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December 12, 2024

Hungarian Development Bank launches EUR 84 million EU-funded credit scheme for SME digitalisation

MBH Magyar Bank Holding Hungarian Bank credit scheme

The Hungarian Development Bank (MFB) announced the launch on Thursday of a HUF 34.7bn (EUR 84 million), European Union-funded credit scheme to support digitalisation at microbusinesses and SMEs.

Launch of an EU-funded credit scheme announced

MFB said HUF 27.8bn of the zero-interest credit would be for project financing of between HUF 3m and HUF 20m, while HUF 7.0bn would be for loans of between HUF 20m and HUF 200m. Total outlays for businesses undertaking projects in the capital are capped at HUF 5.1bn.

The credit is available at the MFB Pont Plusz network and designated branches of MBH Bank and Gránit Bank.

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December 5, 2024

Hungary prioritises workforce training to address labour market challenges

Guest Worker Labour Workforce Shortage Vendégmunkás labour market

Hungary’s government has made a policy priority of training for people who are out of work with low skills or without qualifications, the state secretary for employment policy said at a conference in Budapest on Wednesday.

Addressing the conference on managing demographic challenges by mobilising disadvantaged groups of people, Sándor Czomba noted that Hungary had a “labour market reserve” of around 200,000-300,000 people who could join the workforce.

He pointed to the need for state or corporate programmes to train or retrain older people, slower to adapt to technological development, in order to stay competitive in the labour market. Workplaces must adapt to the needs of an ageing society, allowing people to work longer, while preserving their health and skills, he added.

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December 4, 2024

Number of long weekends in Hungary in 2025: Full list revealed

Hungary’s 2025 calendar includes five long weekends, featuring one three-day, three four-day, and an exceptional five-day Christmas holiday. While some holidays fall on weekends, others are adjusted with “work Saturdays” to balance extra days off. Key dates include Easter, Pentecost, and 23 October, ensuring opportunities for extended breaks throughout the year.

Hungary’s 2025 calendar will feature several long weekends and adjusted workdays to accommodate public holidays. Minister of National Economy Márton Nagy has outlined the dates for long weekends and the corresponding Saturdays when work will be required to make up for these extra days off, 24.hu writes based on Portfolio’s report.

Long weekends in 2025

In 2025, there will be five long weekends, with one notable change: unlike 2024, there will be no six-day long weekends. Instead, 2025 will feature one three-day and three four-day long weekends, alongside an exceptional five-day long weekend for Christmas.

office workers — Photo: depositphotos.com

Three-day weekend:
- 7-9 June (Saturday to Monday)
Four-day weekends:
- 18-21 April (Friday to Monday, Easter)
- 1-4 May (Thursday to Sunday)
- 23-26 October (Thursday to Sunday)
Five-day weekend:
- 24-28 December (Wednesday to Sunday, Christmas)

Hungarian national holidays

15 March (Revolution Day): Falls on a Saturday.
20 August (State Foundation Day): Falls on a Wednesday.
23 October (1956 Revolution): Falls on a Thursday, creating a four-day weekend.

Easter and Pentecost

Easter: 18-21 April will form a four-day weekend, with Good Friday on 18 April.
Pentecost: 7-9 June will create a three-day weekend, with Whit Monday on 9 June.

All Saints’ Day

All Saints’ Day (1 November) falls on a Saturday, meaning no long weekend will be possible.

Christmas and New Year’s

Christmas in 2025 brings a five-day long weekend (24-28 December). However, New Year’s Eve falls on a Wednesday, followed by New Year’s Day on Thursday, splitting the holiday midweek.

Adjusted workdays

To balance the extra days off, three Saturdays will be designated workdays in 2025:

17 May (to compensate for 2 May)
18 October (to compensate for 24 October)
13 December (to compensate for 24 December)

With these adjustments, 2025 promises a mix of holidays and adjusted work schedules, ensuring ample time for relaxation while maintaining productivity.

Free Christmas in 2025?

As we reported before, the Hungarian National Election Committee (Nemzeti Választási Bizottság, NVB) has approved a referendum proposal submitted by the Trade Union of Commercial Employees that seeks to designate 24 December as a public holiday. This step marks significant progress in the union’s efforts to expand recognised holidays in Hungary.

In its Wednesday session, the National Election Committee (NVB) validated a referendum initiative that would make 24 December an official public holiday. The proposal for certification was put forward by the Trade Union of Commercial Employees.

Currently, Hungarian law recognises the following as public holidays: 1 January, 15 March, Good Friday, Easter Monday, 1 May, Whit Monday, 20 August, 23 October, 1 November, and 25-26 December. The proposed referendum question asks: “Do you agree that starting from the calendar year 2025, 24 December should be designated as a public holiday?”

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Featured image: depositphotos.com

December 3, 2024

Hungarian minister highlights challenge of skilled labour shortage in Brussels

National Economy Minister Márton Nagy said the shortage of skilled labour is the “most important challenge” facing the European labour market ahead of a meeting of the Employment, Social Policy, Health and Consumer Affairs Council in Brussels on Monday.

Nagy noted that 77% of European companies had said that the shortage of skilled labour was the “most challenging” factor for their operations, while 60% had said that it was a “barrier to investment.”

He said the ministers would also discuss the employment and social policy priorities for the 2025 European semester and the traineeship directive. Although a qualified majority does not yet support the traineeship directive, he added, the sides are moving closer.

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December 2, 2024

Number of jobseekers continues to fall in November

The state secretary for employment policy said on Monday that the number of jobseekers in Hungary stood at 224,914 in November, 1,200 fewer than in the same month a year earlier, citing data from the National Employment Service (NFSZ).

The November figure was the lowest for the month in more than three decades, Sándor Czomba said. The number was down 1,300 from the previous month, he added.

He said the government aims to boost the employment rate by tapping the 300,000-strong labour market reserve. Around 23,000 job seekers have found work as a result of recently launched European Union-funded government placement programmes.

The Minister of State for Employment Policy added that in addition to further employment growth, the government’s priority is to increase the purchasing power of incomes. The government has fulfilled the first point of the New Economic Policy Action Plan, which consists of 21 measures. As a result, the minimum wage will rise by 40 percent by 2027, by 9 percent to 290,800 forints in 2025, by 13 percent to 328,600 forints in 2026, and by 14 percent to 374,600 forints in 2027, setting the stage for a fourfold increase compared to 2010. Related article: Three-year minimum wage agreement set to impact everyone’s pay in Hungary

The government will help employers who employ workers on the minimum wage to secure a wage agreement. They will have to pay the increased social contribution tax “on a sliding scale”, i.e. in 2025 they will have to pay the 2024 rate in 2025, in 2026 the 2025 rate and in 2027 the 2026 rate.

Featured picture: Depositphotos

December 2, 2024