Annual leave - Calculation and extent of paid leave

In this article, we will review the basics of paid leave, including its extent and how it is calculated, as well as the rules applicable to requesting and administering it. We will also look at the legal framework for leave, some special cases, as well as frequently asked questions. We aim to provide a comprehensive overview of the subject to help both employees and employers better understand and manage paid leave.

The concept of paid leave

Paid leave is a statutory benefit granted to employees, allowing them to be absent from work without the loss of remuneration. Its primary purpose is to provide employees with opportunities for rest, recovery, and the management of personal matters. As such, paid leave plays a key role in supporting work–life balance and enhancing employees’ overall health and wellbeing.

The amount of paid leave varies by country and employer. Within the European Union, labour legislation establishes a minimum entitlement—typically at least 20 working days per year. In addition to these EU‑wide requirements, individual Member States may adopt national rules that offer more favourable conditions for employees.

National labour regulations often outline the conditions under which employees become entitled to paid leave, such as the length of employment or the number of hours worked. Legislation also governs the amount of leave available and the conditions for its use, including the procedures for submitting a leave request, the coordination process with the employer, as well as the requirements for notification and approval.

The legal framework for paid leave ensures fair and equitable treatment of employees and provides safeguards against potential employer misuse. In many workplaces, collective agreements or internal company policies include further details on leave arrangements, potentially offering employees more advantageous terms than the statutory minimum.

Length of annual leave

The statutory base leave entitlement is 20 working days per year, which applies to all employees. Section 117 of the Hungarian Labour Code (Act I of 2012) sets out in detail the rules governing age‑related additional leave. The purpose of the legislation is to recognise the increasing need for rest and recovery as employees grow older. Accordingly, in addition to the annual 20 days of base leave, employees are entitled to extra days of paid leave based on their age.

Age‑related additional leave begins at the age of 25 and increases in several steps until the age of 45, at which point employees are entitled to 10 additional days of age‑related paid leave per year (Labour Code, Section 117).

The annual leave entitlement based on age is structured as follows:

• from age 25, one
• from age 28, two
• from age 31, three
• from age 33, four
• from age 35, five
• from age 37, six
• from age 39, seven
• from age 40, eight
• from age 43, nine
• from age 45, ten additional leave days.

The exact amount of annual leave to which an employee is entitled depends on several factors, including the start date of the employment relationship, the employee’s age, family status, as well as any applicable collective agreements or internal employer policies.

It is essential for employees to be aware of the rules that apply to them and to coordinate the timing and use of their annual leave with their employer in a timely manner. According to Section 122 of the Hungarian Labour Code, the following key principles apply:

• Annual leave is granted by the employer, following prior consultation with the employee.
• Seven working days of annual leave per year—with the exception of the first three months of employment—must be allocated at the employee’s request, in no more than two instalments.
• Unless otherwise agreed, annual leave must be scheduled in a way that ensures the employee is relieved from work and availability obligations for at least fourteen consecutive days once per calendar year.
• The employer must notify the employee of the scheduled leave at least fifteen days before the first day of the leave period.

Additional leave days after children

Employees are entitled to additional paid leave for each child under the age of sixteen. The amount of this extra leave depends on the number of children, as follows:

• after one child, 2 working days
• after two children: 4 working days
• after more than two children: 7 working days

It is important to note that additional leave days are not part of the ordinary annual leave. The employee may take additional leave days according to his/her needs, in agreement with the employer, and must notify the employer at least 15 days before the first day of the leave.

Both parents are entitled to the additional leave days for children.

Further information:

• The amount of additional leave is increased by two extra working days per child if the child is living with a disability or has a severe, long‑term illness.
• For the purpose of determining eligibility for child‑related additional leave, a child must be taken into account from the year of birth until the year in which they reach the age of sixteen.
• If the employee’s employment relationship begins or ends during the year, they are entitled to a pro rata portion of the annual leave (excluding paternity leave and parental leave).

Additional leave is a statutory entitlement, therefore the employer is obligated to grant it to eligible employees. Employees have no obligations linked to the use of additional leave, but they also cannot waive this entitlement unilaterally. The employer may regulate the scheduling of the additional leave, but must take into account the employee’s needs.

Employees are entitled to 44 working days of parental leave until their child reaches the age of three, provided that their employment relationship has been in place for at least one year.

During parental leave, the employee is entitled to 10% of the absentee pay, which must be reduced by the amount of any childcare allowance (GYED) or childcare support benefit (GYES) received for the same period.

Young employees (under the age of 18) are entitled to five working days of additional leave per year, with the last year of eligibility being the year in which they turn eighteen.

Employees are also entitled to five working days of additional leave per year if they:

a) have reduced work capacity,
b) are eligible for disability allowance, or
c) are eligible for the personal allowance for the blind.

What percentage of the salary is paid for periods of leave?

During paid leave, the employee is entitled to his or her full gross pay. This means that the employer must pay the employee his/her normal basic salary, as well as any supplements and benefits.

What is leave redemption?

Compensation for unused vacation days means that when the employment relationship ends, the employer must pay the employee for any vacation days they have earned but not taken.

As such, leave redemption is only compulsory at the end of the employment. This includes dismissal, resignation, termination with mutual agreement, retirement, as well as call-up for military or civilian service. Only untaken leave days accrued on a time-proportionate basis can be redeemed. Paternity leave, sick leave, study leave and unpaid leave may not be redeemed.  Since the employee is entitled to an absentee fee for the duration of the leave, it is also the amount equal to the absentee fee that is paid for its redemption. 
 

Important information:

• The employer must also pay social contribution tax on the amount of leave redemption paid.
• The employee is not obliged to accept leave redemption payment in lieu of the actual leave, but may also request that any unused leave days be issued before the end of the employment if the parties can agree on this.

What is paternity leave?

• Paternity leave in Hungary is a benefit that a father receives after the birth or adoption of his child. At present, in 2026, the most important things to know about paternity leave are as follows:
• How long does paternity leave last? Fathers are entitled to 10 working days of paternity leave, which may be taken until the end of the fourth month following the child’s birth or, in the case of adoption, the date on which the adoption decision becomes final.
• When can paternity leave be taken? Paternity leave must be granted at the time requested by the employee, and it may be taken in no more than two parts. The employee remains entitled to paternity leave even if the child is stillborn or dies after birth.
• What payment is due during paternity leave? For the first 5 days of paternity leave, the employee is entitled to 100% of the absentee pay.
  For the remaining 5 days, the employee is entitled to 40% of the absentee pay.
• Is it compulsory to take paternity leave? Taking paternity leave is not compulsory for the worker.

Statutory background: The rules on paternity leave are laid down in the Labour Code and in Government Decree No 535/2022. (XII. 21.).

Unpaid leave - conditions and information

The conditions for taking unpaid leave are laid down in the Labour Code and the employment contract.

Important information:

How long can unpaid leave last? There is no precise definition, but in some cases the law provides for the granting of unpaid leave and its length, but it may also be requested in other cases, where the employer is free to decide whether to grant leave and is not obliged to do so. If it does, it can make it subject to conditions it sets itself.

How to apply for unpaid leave? Unpaid leave must be requested from the employer in writing, where employee must state the requested starting and ending dates of the unpaid leave and the reason for it.

What reasons can be used for requesting unpaid leave? Unpaid leave can be requested for any reason. The law provides that the employer must approve the request for unpaid leave for reasons of childcare, long-term care of a relative, as well as actual voluntary military service in the reserve forces. Leave without pay may also be granted for reasons other than those provided for by law. It can be requested, for example for the purpose of an extended trip abroad or to renovate a home. In this case, however, the employer is free to decide whether to approve the leave and is not obliged to grant it.

Pay during unpaid leave: During unpaid leave, the employee is not entitled to his/her salary. Other benefits, such as a cafeteria allowance or bonus, are not paid either.

Insurance status during unpaid leave: During unpaid leave, the employee is not considered insured under the relevant social security legislation.  The employee has the option to take out voluntary health insurance during unpaid leave.

Employment status during unpaid leave: The employment status of the worker is continuous also during any period of unpaid leave.

Bereavement Leave

Bereavement leave—commonly referred to as “special leave”—is a distinct category of paid absence and does not form part of the employee’s annual paid vacation. Under the Hungarian Labour Code, employees are entitled to 2 working days of paid leave in the event of the death of a close relative.

This applies to all family members legally defined as close relatives, including:
parents, grandparents, children, spouse, domestic partner, siblings, and the close relatives of the spouse.

The relevant provision can be found in Section 55 (1) f) of the Labour Code, which states that the employee is exempt from work obligations:

“55. § (1) The employee is exempt from the obligation to be available for work and to perform work (…)
f) for two working days upon the death of a close relative.”

The purpose of this leave is to allow the employee to:

• manage official matters related to the death,
• attend the funeral,
• have time to cope with the emotional impact of the loss.

Accumulated Leave After Maternity Leave

During maternity leave, the employee is entitled to accrue unused annual leave. The maximum duration of maternity leave is 24 weeks (168 days), and leave continues to accrue during the first 6 months of unpaid childcare leave (GYED, GYES, GYET).
In the case of twins, leave accrues during the first 12 months.

The legal background is provided by Sections 124 (4)–(6) of the Labour Code, which specify the periods that generate leave entitlement, the method of record‑keeping, and the timeframe for granting the accumulated leave.

Periods During Which Leave Accrues

Employees are entitled to accrue annual leave during the following periods:

• the full duration of maternity leave,
• the first 6 months of unpaid parental leave taken for childcare,
• in the case of twins, the first 12 months of unpaid parental leave.

How Must the Accumulated Leave Be Granted?

Accumulated leave must be granted within 60 days of the employee’s return to work. The employer may schedule the leave, but must:

• take the employee’s interests into account,
• ensure that scheduling does not hinder the employee’s gradual reintegration into work,
• grant all accumulated leave days in kind, i.e. as actual time off.

Why Is This Regulation Important?

The purpose of these rules is to ensure that parents of young children:

• do not face disadvantages due to their absence,
• receive adequate time for rest and adjustment when returning to work,
• are protected from losing leave entitlements or missing out on related payments.

How can a payroll agency help manage in the administration of leaves?

A payroll agency can help a company manage and account paid leave in a number of ways. Let us consider what types of support they can provide in this area:

Ensuring legal compliance: A payroll agency can keep up to date with employment and tax legislation, ensuring that the company is compliant with the law in the accounting and administration of paid leave.

Leave calculation and record-keeping: A payroll agency can be responsible for calculating employees’ leave allowances, including basic leave, additional leave days and extra days based on age or family status. They keep accurate and up-to-date records of the leaves taken by employees.

Leave planning and scheduling: A payroll agency can help employers and employees schedule leave days in such a way as to reconcile the operational requirements of the company with the needs of the employees.

Managing financial calculations and payments: A payroll agency calculates the amount of pay due during periods of leave, and manages the calculation and payment of leave redemption amounts due at the end of a worker’s employment.

Advising and customer service: A payroll agency can advise company management and employees on the taking of leave days. They will help better understand the different types of leave and the conditions for taking them.

Data protection and security: A payroll agency will ensure the security and protection of employees’ personal and employment-related data.

If your business needs such assistance, the payroll team of Forvis Mazars is pleased to be at your service.

Read more about Forvis Mazars services: Payroll services