In the hospitality and retail sectors, simplified employment and service (assignment) contracts are particularly common, and the minimum wage increase directly influences the related tax dues and statutory limits. In addition, a new legal institution will be introduced from 2026: the long-term service contract, which is also addressed in this article.
📌 TL;DR — minimum wage changes (simpified employment, contractors)
- Minimum wage increase from 2026 affects atypical employment relationships as well, especially simplified employment and contractors
- Daily tax on simplified employment increases to 4 800 Ft, tax-exempt daily salary increases to 19 305 Ft.
- One persone can be subjected to simplified employment up to 120 days annually.
- Simplified employment cannot be registered when company has tax debt, or employee is from 3rd country (except agriculture).
- A contractor is considered socially secured if the income is higher than 30% of minimum wage.
- New rule from 2026: long-term service contracts, where minimum social contribution and social tax are payable even for those months which have no payouts.
- The article includes comparison tables to help your calculations.
Simplified Employment - what are the headcount limits?
Simplified employment may be established for agricultural and tourism seasonal work, ad hoc work (daily reports), and ad hoc extra work in the film industry. In hospitality and retail industry, this form of employment most commonly appears as daily reports; therefore, the following section focuses specifically on this type.
Businesses may engage workers in simplified employment subject to general headcount limits: one employee may be employed for a maximum of 5 consecutive days and up to 15 days per month by the same employer. The method of registration remains unchanged in 2026 and may be completed via the ÁNYK system, the ONYA online platform, the EFO Pro mobile application, or by phone via the 185 hotline.
An important change introduced in 2025 and remaining in force in 2026 is the annual limit on simplified employment days for employees. In a calendar year, an individual may work a maximum of 120 days in daily report or combined daily report and seasonal employment, regardless of how many different employers register them. These days must therefore be aggregated across all employers.
How much does a simplified employee cost, any restrictions?
With the increase in the minimum wage, the tax payable for simplified employment has also changed. From 1 January 2026, the flat-rate tax for daily report increases from HUF 4,400 per day to HUF 4,800 per day. At the same time, the tax-free daily wage ceiling rises to HUF 19,305. The flat-rate tax is payable by the employer and must be settled by the 12th day of the month following the month of employment. If the employee receives a daily wage exceeding the statutory ceiling, the employee themselves must declare and pay personal income tax on the excess amount in their annual tax return.
There are additional restrictions on the application of simplified employment. An employer may not register a simplified employee if they have an outstanding tax debt of at least HUF 300,000 in total across the following tax types: simplified employment tax, social tax, personal income tax, and rehabilitation contribution. Furthermore, third-country nationals may not be employed in daily report under simplified employment.
Service Contracts in 2026 – Including Long-Term Service Contracts
In hospitality and retail industry, service contracts are most commonly used for tasks such as executive management, accounting, consulting, technical or maintenance services, and social media or content creation activities. If the contractor is not a taxable person and is therefore not required to issue invoices, payroll obligations arise. Income must be determined from the service fee, calculated as the contract amount reduced by deductible expenses declared by the contractor. Personal income tax must be withheld from this income, and social security obligations must also be examined.
A service contract becomes an insured relationship if the income for the given month or service period exceeds 30% of the prorated minimum wage, i.e. the minimum contribution base. In such cases, social security contributions are deducted from the contractor, and the company becomes liable for social tax.
Some practical examples: we pay a contractor for social media maintenance (1) worked for 30 day for 90 00 Ft 10% flat-rate expenses, (2) worked for 5 days, (3) had expense invoices for 70 000 Ft for those 5 days, and (4) was reported long-term contractor and received 50 000 Ft with 10% cost-rate.
How these scenarios compare:
| Contracts | Contract 1 | Contract 2 | Contract 3 | Long-term |
|---|---|---|---|---|
| Contract fee | 90,000 | 90,000 | 90,000 | 50,000 |
| Expense | 10% | 10% | 70 000 | 10% |
| Income | 81,000 | 81,000 | 20,000 | 45,000 |
| Duration | 30 days | 5 days | 5 days | continuous |
| Minimum tax base | 96,840 | 22,275 | 22,275 | 96,840 |
| Income tax (15%) | 12,150 | 12,150 | 3,000 | 6,750 |
| Social contribution (18,5%) | 0 | 14,985 | 0 | 17,915 |
| Social tax (13%) | 0 | 10,530 | 0 | 12,589 |
| Net payout | 77,850 | 62,865 | 87,000 | 43,250 |
| Taxes | 12,150 | 37,665 | 3,000 | 37,254 |
New rules - long-term service contracts, but are they worth it?
From 1 January 2026, a new legal institution is introduced: the long-term service contract. A service relationship ought be reported to the tax authority as a long-term service contract if it is classified as such by the company. It is not mandatory to classify all service contracts as long-term, and the general rules for retroactive classification and reporting remain unchanged.
The key characteristic of long-term service contracts is that, under the Social Security Act, the minimum contribution base must be applied for every month during which the relationship exists, even if no payment is made in that month. This also triggers social tax liability. As a result, the establishment of a long-term service contract creates an insured relationship, involving a minimum monthly social security contribution of HUF 17,915 and a minimum social contribution tax of HUF 12,589. Therefore, it is essential to carefully assess the financial implications before registering a long-term service contract. In certain cases, exemption from minimum contributions may apply, for example if the contractor receives child-related benefits or is an active full-time student.
Finally, it is important to note that if executive management duties are performed under a service contract by a company member (owner), the assessment of insurance status is governed by the membership relationship rather than the service contract. The detailed rules for this will be covered in the next article of the series focusing on entrepreneurs and business owners.
Conclusion
Minimum wage increase also affects such atypical employemt relationships as simplified employment and service contracts, which are not uncommon in the hospitality and retail indutry's daily operations. Knowing the changing rules and the increased statutory burdens is crucial to plan employment relationships responsibly.
How can we help?
We provide comprehensive and practical support to clients applying simplified employment and/or service contracts, as well. We support registration, documentation, payroll and also help with your calculations for planning.
For more details please check our services and package offers.
What to read next?
This blog post is the second part of our series on the 2026 minimum wage changes. In the first article, we analysed the effects on standard employment relationships, while the final part of the series will focus on entrepreneurs and business owners. Together, the three articles provide a comprehensive overview of how to prepare for employment and payroll challenges in 2026.
👉 Part 1 - Minimum wage changes affecting employment
👉 Part 3: Minimum wage changes - entrepreneurs and business owners
