In which country is foreign remote work taxed?
If the work is performed under a Hungarian employment contract, Hungarian legislation generally applies, and as a general rule, taxes and social security contributions are payable in Hungary.
In certain cases—for example, if part of the work is performed in the foreign company’s country—it may be necessary to pay personal income tax there for the days worked abroad. In such cases, Hungarian personal income tax (PIT) cannot be withheld on the same income. The exact rules depend on several factors (place of work, double taxation treaties), so it is essential to consult a specialist.
Why is a payroll provider necessary?
In theory, the individual can register and submit tax returns themselves, but in practice, it is advisable for the foreign company to register. We provide full assistance in this process:
- We handle registration and authorization.
- We ensure a transparent and secure process for both parties.
- We manage monthly processes, payroll, reports, and tax returns to avoid errors and delays.
How long does registration take?
The processing time for authorization and registration depends on the Hungarian tax authority, but it usually takes about 3–4 weeks, as all documents must initially be submitted on paper. The law requires that new employees be registered no later than the day before their first working day, so it is important to start the process in time. We assist with the entire administration to avoid delays.
Who handles Hungarian payroll?
Hungarian payroll must be handled by a Hungarian payroll service provider, as in-depth knowledge of Hungarian legislation is essential. In addition to payroll processing, we can also take on further administrative tasks upon request: transferring net salaries and contributions, preparing reports, and providing other supplementary services.
What documents are required?
It is advisable to prepare a bilingual employment contract (Hungarian and the foreign company’s language) in accordance with Hungarian law—we can also assist with its preparation if needed.
On a monthly basis, we require attendance data, which can be recorded via our online timesheet system: sick leave, vacation, and other benefits. All monthly tasks can be handled electronically, without paper-based documents or personal appearances, allowing payroll processes to be managed conveniently and efficiently.
If, as an employee, you are looking to be employed by a foreign company, feel free to contact us through any of our contact details, and wwe will be happy to provide further useful information.
