- Overview: Hungary
- Global HR Compliance
- Global PEO and Payroll
- Work permit for hiring expats via PEO
- Contractor vs. Employee: which is better?
- Expand without a Company Set Up
Are you looking to engage and pay offshore IT developers in Hungary?
Find out how you can make an informed decision on whether you should engage and pay employees or independent contractors using our free “Employee vs. Independent Contractor” Checklist.
Designed to be used by companies engaging remote workforce in Hungary, the checklist is the best way to define why and in what cases companies should onboard new hires or convert existing contractors/freelancers into employees without missing any crucial aspects.
What Our Clients Are Saying?
I’d like to share my experience dealing with Acumen International company.
Speed & responsiveness: Very prompt in response to my first inquiry about converting contractors into employees to follow-up questions.
Completeness of information: I like how detailed the estimates and the transparency make me feel more confident about where the money goes.
Overall experience: I am pleased and impressed with how fast they respond to my inquiries. We can trust the company to employ the contractors we want to keep.
Quah Shen Dee,
People Success Officer
I always found Acumen International very supportive, professional, and helpful. They pay my salary on time and are always ready to resolve any issues.
I must admit I truly enjoy my time as an Acumen International employee and feel like they care about me as an individual. I have a dedicated manager that provides me with detailed explanations when it’s needed. Payments are always prompt, and the entire team does its best to respond to any of my questions.
I highly recommend Acumen International to anyone that requires their services.
Eliminating Non-compliance Risk with Global PEO and EOR Services in Hungary
Hiring independent contractors can be a great way to save money on expenses like benefits, vacation time, and paid sick days. However, this also increases the risk of employee misclassification. The different rules and compliance regulations for employee classification across countries worsen this problem. If you’re audited by the government and discover a misclassification case, you could face severe financial penalties. Luckily, partnering with a global PEO or EOR in Hungary can solve this issue immediately.
The full-time employment of a foreign person in Hungary via a global PEO is an incredibly cost-effective way to gain access to a high-quality workforce. This is due to the PEO’s ability to provide in-country customer support and their deep knowledge of Albanian employment laws and HR compliance regulations.
The Advantages of Hiring Independent IT Contractors in Hungary
Businesses of all sizes should consider building and managing a global workforce. This can often be difficult, as different geographies present unique challenges. However, businesses can create successful global operations by studying these challenges and adapting global employment solutions.
Contracting a qualified IT workforce can be a cost-effective way to run your business. However, as with any decision, there are pros and cons to taking on independent contractors. Ideally, contractors can be an amazing asset for businesses with international operations. Independent contractors are
IT contractors can offer businesses great flexibility in terms of work hours. Full-time employees typically have set hours during which they are available, but a freelance IT developer would likely have more flexible hours to offer. This allows businesses to be better situated to meet their needs and avoid gaps in global coverage. IT contractors who can work independently are good at adapting to the ever-evolving needs of their clients and typically cost less than full-time employees since you don’t have to pay taxes or social security for them. All of this makes them a perfect fit for companies making a global move and looking to save time and money.
Access to Unique Global IT Talent Pool
The changing IT talent landscape is a major challenge for businesses. Most leaders know that having the right IT professionals is critical to success, but putting that insight into action can be difficult – especially in a competitive environment. Finding and keeping the right and skilled IT employees becomes increasingly important.
Finding the best IT professionals is a limitation for businesses regarding full-time employees. However, with the right tools and strategies, you can easily convert your independent contractor IT professionals from any country to full-time employees in Hungary. PEO engagement provides plenty of options for onboarding skilled individuals and avoiding any limitations on your workforce.
Should Independent Contractors Be Hired Full-Time in Hungary?
There has been a lot of debate recently around the advantages and disadvantages of converting freelancers or independent contractors into full-time employees. An increasing number of companies in Hungary are facing a similar problem. Most companies shy away from converting independent contractors into full-time employees as they are worried about the liability of hiring someone as a full-time employee. They need to fill positions but do not have the budget or staff to hire more full-time staff.
Companies are hesitant to convert independent contractors because of the payroll and tax burden. Many fear converting independent contractors into full-time employees would be too costly or time-consuming.
But this fear overlooks that such companies already spend up to 12% of payroll costs on non-covered benefits for independent contractors. This can be avoided by hiring them permanently or granting them the same benefits as other full-time staff members.
Also, the Hungarian tax and labor authorities are cracking down on businesses that misclassify their workers. If caught misclassifying your workers, you could face stiff penalties, including a lawsuit.
However, there are many reasons why converting a freelancer to an employee can be a smart move for your business. Here are five of them.
5 Benefits of Hiring & Payrolling Full-time IT Employees Over Independent Contractors via PEO and EOR
1. Employment Compliance & Cost Control in Hungary
Acumen PEO can help you streamline global employment and eliminate all legal and compliance complexities associated with expanding into Hungary. Engaging and paying foreign talent full-time via a global PEO solution is about 30% cheaper than engaging in-house.
PEO engagement can help you save up to 50% of the costs associated with working through your entity. PEOs can offer a wide range of services and benefits that can help you streamline your business processes and reduce expenses.
2. Benefits Administration
Employee loyalty can be increased by up to 47% when using full-time employment to retain talented and successful employees. Freelancers who enjoy benefits such as paid leave or a company car often work harder than those without these perks. This is because they are motivated to do their best and feel appreciated. When offered a permanent position, they will bring their considerable skills and experience to your business, making it even more successful.
3. Expert Guidance on Employment Law in Hungary
If you’re looking for a quick and easy solution to help with your tax compliance challenges, a Global Employer of Record (EOR) or PEO arrangement could be a great way to go. With the help of your global PEO partner, you can quickly test out the Hungarian market and then cancel if you decide it is not right for you. But make sure to understand all of your UK corporate income tax requirements before signing on the dotted line!
The benefits of using an official foreign employment service are clear. PEO partners with you to take care of all Hungary’s HR, risk, and compliance aspects. This way, you can focus on growing your business instead of navigating these complex waters alone. You can be sure that your operation is progressing smoothly by eliminating the risk of legal, financial, and business issues with a Global PEO partner. With just a few employees, starting in the United Kingdom is easy – so go ahead and explore this amazing country!
4. Employee Misclassification Risk Prevention in Hungary
The Employee Misclassification risk becomes even greater when a business owner hires independent contractors — who are classified as self-employed rather than traditional full-time employees. Businesses may hire independent contractors to save money on expenses normally covered for full-time employees: benefits, vacation time, and paid sick days. While this may save you money upfront, it also increases indirect costs down the line: you’ll have to do more paperwork at tax time and pay steep penalties if you’re audited by the government authorities and they discover a misclassification case. In addition to severe financial repercussions, having an untrained staff of independent contractors means less productivity due to a lack of training and supervision.
Global companies are increasingly at risk of employee misclassification and the possibility of legal action against their organizations. A PEO can help you to enhance your HR compliance and avoid these risks by providing on-site customer support and in-depth expertise in local labor law and tax and compliance regulations. Acumen IInternational’s in-country managers will speak your language, making it much easier to employ legally, onboard, and payroll your globally distributed teams of professionals; you will save time and money with less need for recruitment or training.
5. Global Mobility and International IT Professionals in Hungary
At Acumen International, we offer expert guidance on all aspects of global mobility and immigration support. Our team of experts can help make your IT professional’s relocation as smooth and easy as possible. We will support you through everything, from knowing the tax and social security obligations in Hungary and their home country to obtaining business visas and work permits. And we will even help you set up a payroll administration so that everything is handled tax and social security compliantly in Estonia.
The Case of an IT Freelancer You Most Certainly Want to Avoid in Hungary
Here is the litigation you would want to avoid… One American company worked with a Slovakian IT freelancer for approximately three years. The American HR director decided to contact Acumen International to employ this freelancer so that they would be in compliance with labor laws and avoid future misclassification issues.
The finance department of this US company did not approve of our offer to employ the Slovakian freelancer as it seemed higher than what they were currently paying the freelancer. An employee misclassification case did not seem imminent, so they decided not to act.
Half a year later, the same company contacted us to employ the Slovakian freelancer. Our offer got approved, but the freelancer refused to sign our employment agreement. In this half-year, the relationship between the freelancer and the US company went sour. The freelancer decided to go to the labor authorities instead. We never heard the ultimate verdict, but from communication with the HR director, we understood that they risked owing social security taxes, vacation, severance payment, and additional fines totaling about seventy thousand euros.
How to Easily Convert Your Independent Contractor to A Full-Time Employee with EOR and PEO Services in Hungary
Working with a contractor is easy, but sometimes you want to convert him to a full-time employee. Acumen International offers PEO and EOR – Innovative global employment solutions, so you can hire from anywhere and manage everything from one place – all in a single engagement model.
Acumen has recognized the havoc converting freelancers to full-time employees can cause in Hungary. The stopgap solution for these problems was Professional Employer Organization (PEO) or Employer of Record (EOR), which allows businesses with foreign contractors to benefit from a full-service HR-management solution for their remote workforce. Acumen International offers flexible pricing models enabling you to hire employees abroad and manage them painlessly, risk-free, and compliantly.
If you use a PEO and EOR solution by Acumen International, you can focus on your business’s growth. Acumen only brings the best global employment opportunities to businesses expanding internationally — with our EOR and PEO solution, you can legally hire, onboard, and pay full-time employees in any country without worrying about compliance issues or labor laws.
With a professional employer organization (PEO) or Employer of Record (EOR), employees benefit from consistent and timely payroll, tax reporting, and much more — without legal complications. PEO companies take care of taxes, deductions, and benefits administration, freeing employers from administrative burdens while focusing on their business.
How PEO and EOR Can Help You Tap into Top Global IT Talent in Hungary
PEOs and EORs are two different types of employment companies. PEOs manage the HR for your company and share the risks of employing your workers. This includes finance, legal and compliance, and work safety risks. By doing this, you are free from any potential problems arising from being an employer. EORs, on the other hand, are companies that handle the tax reporting for your employees.
PEOs and EORs focus on helping with the financial, legal, and compliance aspects of employment, while EORs assume all the risks associated with being an employer. This includes handling injuries or issues at work and dealing with taxes, compliance, and other bureaucracy. EORs can be a great option for businesses that want to avoid problems with being an employer.
|Employment Model||Co-employer||Sole Employer|
|Key Services||Global employment, payroll, benefits, immigration (visa, work permits), mobility||Global employment, payroll, benefits, immigration (visa, work permits), mobility|
|Local Entity Establishment||Required||Optional|
|Liability||Shares responsibilities and liabilities||Assumes all responsibilities and liabilities|
|Global Labour & HR Compliance||Optional||Required|
Are you looking to engage and pay offshore IT developers in Hungary?
Acumen International – Your Trusted Global PEO and EOR Solutions Provider in Hungary
Headquartered in London, UK, Acumen International, a Global Employer of Record (EOR) and Professional Employer Organization (PEO) service provider, was founded in 2001. The company gives mid-sized and enterprise companies the power and flexibility to grow internationally with streamlined and simplified global labor expansion.
Acumen International helps solve the frustrations faced by founders and leaders of technology companies looking to expand globally quickly but cannot or do not want to take on the liability, costs, burden of direct employer status, or other risks associated with operating in individual countries. International employers can also use our global resources to test a new market quickly before establishing a local legal entity.
- Immediate service coverage in 190 countries.
- Both a single point of contact and a dedicated account manager for your project for all target countries.
- A single contract for all in-country services (employment, immigration, legal, etc.)
- A single PEO provider assumes full responsibility for your international employees in multiple countries.
- Payments are made within the UK or to the UK bank company account.
- Fully compliant sand standardized procedures and reporting systems.
- Standard payroll breakdowns for all target countries.
- As soon as we receive your request for a project in any country, we will send you a payroll breakdown and offer within 2 working hours.
- Full 100% fee money-back guarantee for employee or contractor payment delays.
- Tailored and 100% compliant employment contract drafts.
- No need to set up a new entity in every country where you have operations. You are not required to hire local employees or worry about local compliance requirements.
- The ability to scale your business quickly by hiring employees in multiple countries without having to set up a new entity in each country.
- A single point of contact for all employment-related questions and concerns.
- A single point of contact for all tax compliance questions and concerns.
- No need to worry about managing multiple payroll systems, tax filing requirements, or employee benefits programs across multiple countries since everything is handled by Acumen Global Employer of Record (EOR).