---
title: "Hungary EOR vs Entity 2026 | Crossover and When to Switch"
description: "Hungary EOR vs your own Kft. Crossover typically 6 to 9 employees. Flat income tax 15%. Entity setup HUF 1.5m to 4m. Full comparison."
canonical: https://www.teamed.global/country-hiring-guides/hungary/eor-vs-entity
---

Hungary · EOR vs entity child

Served by Teamed vetted partner-entity network in Hungary

# When do you graduate from an *EOR to your own Hungary entity*?

Hungary runs a flat 15% personal income tax on every salary, then stacks employer social contribution tax and employee contributions on top. Those rates are the same whether you hire through an EOR or your own Kft. What changes is the fixed cost of running the company: incorporation, a Hungarian bank account, monthly bookkeeping, and the personal duties that land on the managing director. Here is the full comparison, and the decision factors that sit outside the spreadsheet.

Last reviewed 13 June 2026 · Hungary guide

![The Hungarian Parliament Building lit warm gold along the Danube in Budapest at dusk, the river reflecting the lights.](/images/country-guides/hungary-eor-vs-entity.webp)

Illustration · Budapest, Hungary

Answer.cite this

EOR is faster and cheaper at low headcount in Hungary. Forming a private limited company (Kft) typically takes 3 to 5 weeks. Formation typically costs HUF 1,500,000 to 4,000,000 all-in.

Running a Hungarian Kft costs roughly HUF 1,200,000 to 2,400,000 per month. These are typical market ranges, not law figures. They move with your bookkeeping setup and how much you outsource.

The crossover typically lands around 6 to 9 employees on common Budapest salary bands. Personal income tax is a flat 15% on both sides. Employer social contribution tax applies on both sides too. The entity side carries formation costs and ongoing compliance on top.

The 2026 monthly minimum wage is Ft 322,800/month. Statutory leave starts at 20 days and rises with age. These rates are identical whether you use an EOR or your own Kft.

## The crossover maths

EOR cost scales with headcount. One fee per employee per month. Entity cost has a fixed overhead. That fixed line and the EOR line cross at around 6 to 9 employees on typical Budapest salaries.

Teamed charges from $599 per employee per month. A typical Hungarian Kft carries a fixed monthly overhead of HUF 1,200,000 to 2,400,000 for bookkeeping, payroll, statutory filings, and HR admin.

The table below uses HUF 215,000 as an illustrative HUF equivalent of the Teamed fee. This is illustrative. The actual HUF amount depends on the exchange rate at the time of invoice. Teamed charges from $599 USD with zero FX mark-up.

All entity cost figures in this table are typical ranges. They cover outsourced bookkeeping, payroll, statutory filings, and HR admin for a small Hungarian Kft. They are illustrative, not law figures. Actual costs vary with your outsourcing model and benefits programme.

Hungary layers several payroll charges that every employer must remit, on both sides of this comparison. Personal income tax is a flat 15% on the employee's salary. Employer social contribution tax (SZOCHO) sits on top of gross pay, and employees carry their own combined social contribution. The exact employer SZOCHO rate is set by decree and should be confirmed against the current official figure for 2026. These charges apply whether you use an EOR or your own Kft, so they do not move the crossover much. They do add filing work to the entity side.

[Run the Crossover Calculator with your own headcount and salary band.](/tools/crossover-calculator/hungary)

1. Calculate the EOR cost Multiply the Teamed fee (from $599 USD) by your planned Hungary headcount. This is the fixed variable cost. It grows in a straight line as you hire.
2. Estimate the entity fixed overhead Typically HUF 1,200,000 to 2,400,000 per month for a small Hungarian Kft. This covers bookkeeping, payroll, statutory filings, income tax and social contribution administration, and first-point HR. It does not grow much until headcount passes twelve.
3. Find the crossover headcount The crossover is where EOR monthly cost equals entity monthly overhead. For most Budapest salary bands, this is around six to nine employees. Use the Crossover Calculator for your own numbers.
4. Factor in non-financial triggers The maths gives you a headcount threshold. Local VAT and invoicing, public procurement, and market-validation reversibility are separate questions that may override the cost crossover in either direction.
5. Plan the graduation date Allow three to five weeks for entity formation before the first payroll on your own Kft. Add two to four weeks for the bank account. Start the GEMO process while EOR keeps running.

## Hungary entity setup, what it actually costs

Forming a Hungarian Kft typically costs HUF 1,500,000 to 4,000,000 all-in. The court registration step itself is modest. The gap is legal drafting, the notary or attorney countersignature, share capital, and bank account setup.

Allow roughly 3 to 5 weeks from the incorporation decision to your first payroll. Tax and social fund registrations run alongside it. The bank account can add 2 to 4 weeks.

These are typical ranges, not law figures. No law sets what a Hungarian Kft costs to form. The range reflects real professional services market rates in Budapest. It moves with share structure and how much you outsource.

| Cost item | Typical range | One-off or recurring |
| --- | --- | --- |
| Court of registration (cégbíróság) filing | HUF 0 to 50,000 (simplified vs standard) | One-off |
| Attorney countersignature and articles drafting | HUF 150,000 to 500,000 | One-off |
| Minimum share capital for a Kft | HUF 3,000,000 (paid into the company, not a fee) | One-off, retained |
| Tax number and NAV registration | HUF 0 direct (admin time) | One-off |
| Social fund and chamber registration | HUF 0 to 50,000 | One-off plus annual chamber fee |
| Business bank account | HUF 50,000 to 150,000 (setup costs vary) | One-off plus monthly fees |
| Employment contract templates | HUF 150,000 to 400,000 | One-off |
| Employee handbook and HR policies | HUF 200,000 to 500,000 | One-off |
| Registered seat / agent fee | HUF 60,000 to 200,000 per year | Recurring |
| First-year accounting and audit set-up | HUF 300,000 to 900,000 | Recurring annually |
| **Realistic total setup cost (excluding retained share capital)** | **HUF 1,500,000 to 4,000,000** | **Mostly one-off** |

### Why the bank account matters for payroll

A Hungarian Kft must open a domestic business bank account within a set period of registration, and you cannot run compliant payroll without it. Most banks want the company registered, the tax number issued, and the managing director present for identity checks before they open the account. Expect 2 to 4 weeks from incorporation to a working account, longer if directors are not in Hungary. That turns a 3-week incorporation into a 5 to 8 week wait before your first payroll if the sequence is not managed tightly.

## Hungary entity ongoing cost, typically HUF 1,200,000 to 2,400,000 per month

Running a small Hungarian Kft typically costs HUF 1,200,000 to 2,400,000 per month. That covers outsourced bookkeeping, payroll, statutory filings, and first-point HR.

Below 5 employees, this fixed overhead dominates the per-head cost. Above 12 employees the overhead amortises and the entity starts to look cheaper.

These figures are typical market ranges for a small Hungarian company with 1 to 12 employees. They are illustrative, not law figures. Actual costs depend on whether you outsource or hire in-house, and on the complexity of your payroll and benefits programme.

| Monthly cost item | Typical range (HUF) | What it covers |
| --- | --- | --- |
| Outsourced bookkeeping and monthly accounts | 300,000 to 600,000 | Reconciliation, accruals, monthly management accounts |
| Payroll service (1 to 12 employees) | 150,000 to 400,000 | Income tax, social contributions, filings and payslips |
| Annual audit and statutory accounts (amortised) | 80,000 to 200,000 | Annual cost divided across the year |
| Company filings and corporate housekeeping | 40,000 to 100,000 | Court of registration changes, chamber returns |
| HR and employment law advisory | 120,000 to 300,000 | Contract reviews, disciplinary support, policy updates |
| Hungary people ops and first-point HR | 250,000 to 500,000 | Onboarding, leave admin, employee queries |
| Software subscriptions (HRIS, payroll, accounting) | 80,000 to 200,000 | Per-user tools |
| Insurance and occupational health | 80,000 to 200,000 | Employer liability, mandatory occupational health checks |
| **Total ongoing monthly** | **1,200,000 to 2,400,000** | **1 to 12 employee company** |

Above 12 employees, dedicated in-house HR and finance capacity typically becomes necessary, and the band widens. Private health and wellbeing benefits, common in competitive Budapest hiring, sit on top of these overhead estimates.

## The cost nobody quotes, managing director liability

A Hungarian Kft managing director (ügyvezető) carries personal duties under the Civil Code. These cannot be handed to an advisor. Late or wrong filings can attract personal fines and liability.

EOR clients carry none of these duties. Teamed holds them as the legal employer.

Most cost comparisons skip the director-liability dimension because it is hard to put a number on. It is worth naming before you decide.

### Personal duties of the managing director

The managing director of a Hungarian Kft must run the company with the care expected of the role, act in the company's interests, keep proper books, and file on time. Breaching those duties can bring personal liability, and in insolvency a director can be pursued personally for losses caused by mismanagement. These are personal duties. They cannot be outsourced to an accountant or company secretary.

### The compliance treadmill

- **Monthly payroll filings**: income tax withheld at a flat 15%, employer social contribution tax, and employee contributions all reported and paid each month to the tax authority (NAV).
- **Wage payment deadline**: monthly wages must reach employees by the statutory cut-off, with a written wage statement issued on the same timeline.
- **Annual corporate tax and accounts**: a yearly corporate tax return and statutory accounts, filed with NAV and the Court of registration.
- **Occupational safety**: mandatory health and safety provision and occupational health checks under the Occupational Safety and Health Act.
- **[Statutory leave and sick pay administration](/country-hiring-guides/hungary/tax-and-payroll)**: leave from 20 days, plus employer-paid sick leave of 15 days at 70% of absence pay.

Each filing is individually manageable. Stacked across a year they consume real management attention and carry personal director risk on every missed deadline. An EOR carries all of these on its own entity.

## When you should stay on EOR

Below 5 employees, during market validation, or on project hires, the EOR is the right answer. The crossover is a maths threshold. It is not a strategic verdict.

Reversibility matters in Hungary. Ending an EOR relationship is simple. Winding down a Kft means court deregistration, NAV clearances, and employee terminal pay. It is not fast.

- **Under 5 Hungary employees at typical Budapest salaries**: EOR is cheaper every month. The Kft overhead has nothing to amortise against at that headcount.
- **Market validation phase**: you are hiring 1 or 2 people to test commercial fit. Forming a Kft commits the HUF 3,000,000 share capital and management attention before you know whether Hungary will deliver.
- **Project hires**: 6 to 12 month engagements where the formation cost will not amortise before the project ends.
- **Uncertain headcount trajectory**: Hungary is a priority market but you have not committed to long-term growth. EOR keeps your options open.
- **High wind-down risk**: holding patterns after an acquisition, or pilots, where a local entity creates exit work later.

## When you should switch to your own entity

Above 8 employees consistently, with a multi-year Hungary plan, or where local presence matters to customers and regulators, your own Kft starts winning on cost. It also unlocks things the EOR structure cannot do.

A registered Hungarian entity gives you direct VAT registration, local invoicing, and the standing to bid for work that requires a domestic company.

- **Sustained headcount above 8 Hungary employees** at typical salaries: the Kft overhead amortises across enough people that per-head cost falls below the EOR fee.
- **Local invoicing and VAT**: you need a Hungarian VAT-registered company to bill local clients or run a local revenue line, which EOR employment does not provide.
- **Public procurement and regulated sectors**: certain tenders and licensed activities require a registered Hungarian entity with a local seat and a managing director, not EOR employment.
- **Equity and senior hires**: senior people expecting participation in a Hungarian-registered company need a local entity to structure those arrangements.
- **Multi-year growth plan**: you have line of sight to 10 or more Hungary employees over 24 months. Starting formation early means the Kft is ready before the crossover, not after it.

## How Teamed's Graduation Model handles the transition

Teamed graduates customers from EOR to their own entity on the same platform. Same Hungary specialist. Same employment contracts, moved across to the new Kft. No break in tenure or benefits.

Most providers treat the move as a re-onboarding event. Employees re-sign, sometimes lose continuous service and accrued leave. Teamed treats it as a stage of the employment lifecycle.

The technical mechanic is **employer transfer**: the employment relationship moves from Teamed's partner entity to your new Hungarian Kft on a set date. All terms carry across. Salary, social contributions, annual leave entitlement, and continuous service date stay unchanged. The employee sees a different employer name on the payslip. Nothing else changes.

What we do operationally:

- Stand up your Hungary entity through [GEMO](/entity-management), typically 3 to 5 weeks, while EOR keeps running in parallel.
- Register the new Kft for income tax, social contributions, and corporate tax with the National Tax and Customs Administration (NAV).
- Open the entity bank account and payroll mandate.
- Transfer every active employment relationship on a single effective date.
- Move ongoing benefits, including any private health cover, with no lapse.
- File final EOR-period returns and open new filings on the Kft from the transfer date.
- Keep the same people ops specialist as your primary contact after graduation.

The Graduation Model exists because every other EOR makes this hard. We treat the move as something we help you plan for from the day you hire your first employee through us.

## How does Teamed handle Hungary employment for you?

Teamed becomes your legal [employer of record](/lp/employer-of-record) in Hungary for [**from $599 per employee per month**](/pricing), with **zero FX mark-up** in any currency.

Payroll, benefits, and the full Hungary employment law stack run on **one platform**.

**Real HR and legal experts** handle your Hungary hires from the first offer letter through every monthly NAV submission and the annual accounts. **An actual person**, not a chatbot or a pooled queue. There is **no setup fee** and **no exit fee**. Every employer cost **passes through at cost, itemised** on every invoice. You see the flat 15% income tax line, the employer social contribution line, and the leave accrual against the statutory 20 days. Nothing is hidden inside the management fee.

EOR payroll, contractor onboarding, and entity setup all live on **one platform**. You start on EOR and **graduate** to your own Kft when the maths flips, which is the point of the model. EOR is the right answer **until it isn't**, and we tell you when. Run the [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator) to see the month the model flips. Start from [the Hungary hiring overview](/country-hiring-guides/hungary). Key sources: the [Labour Code (Act I of 2012)](https://njt.hu/jogszabaly/2012-1-00-00) and the [personal income tax rate](https://www.rsm.hu/kisokos/szja-merteke).

## Frequently asked questions

At what headcount does an EOR stop being cheaper than a Hungary entity?

The crossover typically lands around six to nine Hungary employees on common Budapest salary bands. Below that, the EOR fee (from $599 per employee per month) is cheaper than the typical Kft overhead of HUF 1,200,000 to 2,400,000 per month. Above it, the overhead amortises and per-employee cost falls below the EOR fee. Use the Crossover Calculator to run your own salary band.

How much does it cost to set up a Hungarian Kft?

Typically HUF 1,500,000 to 4,000,000 all-in, excluding the HUF 3,000,000 minimum share capital you pay into the company and keep. The court registration step is modest. The rest is attorney drafting and countersignature, employment contracts, HR policies, bank account setup, and the first year of accounting and audit set-up. The range moves with share structure and how much you outsource.

How long does it take to set up a Hungary entity and run the first payroll?

Around three to five weeks from the incorporation decision to first payroll if you use a local corporate services firm or Teamed GEMO. The business bank account is the common gating step. Budget two to four weeks for it to open after registration, longer if the managing director is not in Hungary.

What are the statutory employer and employee costs on both sides of the comparison?

Personal income tax is a flat 15% on the employee's salary. On top of gross pay, employers pay social contribution tax (SZOCHO), and employees carry their own combined social contribution. The employer SZOCHO rate is set by decree and should be confirmed against the current official 2026 figure. The 2026 monthly minimum wage is Ft 322,800/month. These costs apply whether you employ via EOR or your own Kft.

What statutory leave and sick pay applies to a Hungary employee?

Base annual leave is 20 days, rising with age and dependents. Employers also provide 15 days of paid sick leave each year at 70% of absence pay, and mothers are entitled to 24 weeks of maternity leave. These are the same whether you use an EOR or your own Kft.

What is Teamed's Graduation Model for Hungary?

Teamed graduates customers from EOR to their own Hungary Kft on the same platform. Employment relationships move to the new entity on a single date. Salary, social contributions, annual leave entitlement, and continuous service date all carry over unchanged. Teamed handles entity formation through GEMO, registers the new Kft with NAV, and moves benefits with no lapse.

Teamed Legal Operations

Hungary's flat personal income tax and its layered social contributions fall on every salary, EOR or entity. What changes is who carries the company. As a new Kft managing director, you carry the monthly NAV filings, the annual accounts, the bank mandate, and personal liability on every missed deadline. The EOR absorbs that rhythm from day one. The entity clock does not start until your registration is complete and your payroll is live.

A note from Tom Price-Daniel

Budapest salaries put the crossover around six to nine employees. Below that, EOR wins every month.  
Past it, a Hungarian Kft typically costs HUF 1,500,000 to 4,000,000 to set up, plus the share capital you retain.  
When the maths flips, we tell you and move you across. That is the only honest version of this.

Tom Price-Daniel · Co-founder, Teamed

## Related Hungary guides

- [Hiring in Hungary, overview](/country-hiring-guides/hungary)parent
- [Hungary employer cost breakdown](/country-hiring-guides/hungary/cost-breakdown)sibling
- [Hungary tax and payroll guide](/country-hiring-guides/hungary/tax-and-payroll)sibling
- [Hungary termination and severance](/country-hiring-guides/hungary/termination-and-severance)sibling
- [Employer of Record overview](/lp/employer-of-record)core
- The Graduation Modelcore
- [Entity Management (GEMO)](/entity-management)core
- [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator/hungary)tool
- [Talk to an expert](https://www.teamed.global/contact)CTA

A note on this page.

This is a guide, not legal, tax or accounting advice. Rules change and vary by jurisdiction. Verify current requirements with the National Tax and Customs Administration (NAV) and the Court of registration before relying on any specific framework. Entity setup and ongoing cost ranges in this guide are typical market figures based on professional services pricing in Hungary. They are illustrative only and not law figures. The employer social contribution tax (SZOCHO) rate is set by decree and should be confirmed against the current official 2026 figure before use. Rates cited (personal income tax, minimum wage, annual leave, sick pay) are verified figures from Hungarian primary sources as at June 2026.