We are increasingly encountering situations where employees approach their employers with requests such as:

“I work in Hungary, but due to family reasons I would like to move to Austria. I can continue performing my job remotely, so I would like to remain employed by my Hungarian employer.”

At first glance, this may seem like a straightforward request. In reality, however, the situation is far more complex.

Growing Mobility and an Evolving Legal Environment

A few years ago, the situation was relatively simple. Employees lived in Hungary, worked for Hungarian employers, and only occasionally traveled abroad for a few days or weeks to attend business meetings, training sessions, or conferences.

Today, the world looks very different. It has become increasingly common for individuals to move between multiple countries during the year, spending several months in one state before relocating to another. Due to remote work and international mobility, it is no longer unusual for an employee to remain employed by a Hungarian company while living permanently in another country.

The challenge is that tax and social security regulations, as well as EU coordination rules, often struggle to keep pace with these rapid changes. At the same time, the European Union continues to modernize and harmonize these regulations. An important step in this process is the amendment of Regulation (EC) No 883/2004 on the coordination of social security systems, adopted by the European Parliament in July 2026. The objective is to simplify administration, reduce abuse, and provide greater clarity regarding cross-border employment arrangements.

How to Assess an Employee’s Stay or Relocation Abroad

Whenever an employee plans to work from abroad or relocate to another country, a comprehensive assessment is required, including:

• In which country the employee becomes a tax resident;
• Where employment income will be taxable;
• Where the employee’s family lives;
• In which country social security obligations arise;
• Whether foreign payroll registration is required;
• Whether local employer registration is necessary;
• Whether double taxation treaty provisions can be applied;
• Whether an A1 certificate is required.

No two cases are identical. The same employee, working under the same employment contract, may face entirely different tax and social security consequences depending on factors such as the number of days spent in a particular country, family circumstances, the location of their permanent home, and the nature of the work performed.

Therefore, there is no universal answer. Every situation requires an individual assessment.

Short-Term Assignments: Business Trips and Conferences

One of the most common forms of cross-border work is a short-term assignment.

Examples include:

• Business meetings;
• Conferences;
• Professional training programs;
• Client or partner visits;
• Short-term project work.

Payroll During a Short-Term Assignment

In these cases, payroll typically remains in Hungary, and the employee continues to be employed by the Hungarian company.

Daily Allowance During Assignments

Employers may provide a per diem allowance for the duration of the assignment. The taxation of such allowances is subject to specific rules. Legislation generally provides for a tax-exempt portion, while any amount above that threshold is taxable as employment income.

A1 Certificate

From an employer’s perspective, the A1 certificate is also a crucial consideration. The certificate confirms that the employee remains subject to Hungarian social security legislation.

Under the newly adopted EU rules, certain short business trips and non-commercial work activities lasting no more than three consecutive working days may no longer require an A1 certificate in the future. This could significantly reduce administrative burdens for both employers and employees.

Long-Term Secondments: More Than Just Extended Work Abroad

Companies often view long-term secondments simply as extended foreign projects. However, from a tax and social security perspective, the situation is considerably more complex.

According to EU coordination rules, a posted employee may generally remain within the social security system of the sending country, for example Hungary, for up to 24 months. However, this treatment only applies if several conditions are satisfied. The new rules further tighten these requirements. Among other conditions, the employee must have been covered by the sending country’s social security system for at least three months prior to the secondment.

In practice, a long-term secondment is never merely a social security issue. Employers must also examine:

• The employee’s tax residency status;
• Potential income tax obligations;
• The country where the work is actually performed;
• Family and economic ties;
• Whether employer registration obligations arise abroad;
• Whether a permanent establishment risk may be created.

Key Considerations for Employers Managing Long-Term Secondments

Many employers assume that because the employee continues to work under a Hungarian employment contract, everything remains unchanged. This assumption can be incorrect.

For example, an employee may become a tax resident in another country while remaining subject to Hungarian social security legislation, or vice versa. This is why a detailed preliminary assessment is essential.

Another common misconception is that the 24-month posting period can automatically be restarted. Under the new EU rules, in the case of recurring postings, at least two months must pass after the end of a previous posting before the favorable social security rules for posted workers can be applied again.

It is also important to note that employers’ responsibilities regarding A1 certificates and posting administration are increasing. Authorities are placing greater emphasis on verifying that postings genuinely meet the legal requirements and that the foreign work arrangement is supported by appropriate documentation.

Our Recommendations

Based on our experience, tax and social security specialists should be involved already during the planning phase of most long-term secondments.

A well-designed arrangement can help employers avoid:

• Double social security contributions;
• Incorrect payroll processing;
• Future tax and social security risks;
• Unexpected registration obligations abroad.

This is particularly important when the employee actually relocates abroad, their family moves with them, and the foreign work arrangement is no longer temporary but forms part of a long-term lifestyle and employment structure.