As a rule, you can start an employment relationship if you are over 16. However, a person over 15 years of age who is in full-time education can also be an employee during school holidays. If the student is under 18 years of age, they may work only with the consent of their legal guardian. Any form of employment requires a tax identification number.

EMPLOYMENT RELATIONSHIP:

If the students perform their duties in an employment relationship, the provisions of the Labour Code must also be applied, in particular the rules that apply to young workers.

Students under the age of 18 are considered young workers, so they have strong protection under the Labour Code. This protection applies even if they are not employed in an employment relationship, for example, when working on a contract of assignment or through a student cooperative.

A young worker may not be ordered to work at night or to work extraordinary hours. In addition, a young worker may not work more than eight hours a day, and if they have more than one employment relationship, the working hours of these relationships must be added together. This means that there is no possibility or obligation to work overtime, and the daily working time limit is 8 hours even if the student works in several jobs. It is also worth bearing in mind that employers who use a time-frame may only be able to assign young workers to a one-week time-frame.

The health and safety of young people requires special protection, so special rules apply to breaks and daily rest periods. Young people must be allowed at least thirty minutes' rest per day if their scheduled working time exceeds four and a half hours, and at least forty-five minutes' rest per day if their scheduled working time exceeds six hours, while the daily rest period must be twelve hours.

In addition to the above special rules, young workers are of course also subject to the other provisions of the Labour Code, so they are also entitled to paid leave, but they are obliged to fulfil their obligations arising from the employment relationship in the same way as adult workers.

Taxation:

For tax purposes, students' income from employment is considered as wage income in the same way as any other employee, so the employer deducts, declares and pays the 15% personal income tax. A student with an employment relationship is considered insured and therefore pays 18.5% social security contributions, which are also assessed, declared and paid by the employer, as well as 15.5% social contribution tax and vocational training contributions.

STUDENT COOPERATIVE:

It is common for students to work through a student cooperative. Student cooperative employment is a form of atypical employment in which there is a legal relationship between the student and the cooperative, but the student is working for a third party with whom they have no legal relationship.

The legal characteristic of a cooperative is that the natural person members (in the case of a student cooperative, the students) are obliged to make a personal contribution to the cooperative. This is usually the work itself, which is carried out for a third party contracted by the cooperative.

Employment in a cooperative is a specific type of employment relationship. For this very reason, the cooperative does not conclude an employment contract with students, and only the following exceptional rules of the Labour Code apply to student employment, as opposed to traditional employment.

Although student employment does not create an employment relationship, students are still entitled to the minimum wage or guaranteed minimum wage.

A member of a cooperative is entitled to the same amount of time off and daily rest as an employee. Thus, if the duration of the member's duties exceeds six hours per day, they are entitled to a break of twenty minutes per day, and if it exceeds nine hours per day, an additional break of twenty-five minutes per day. The special rule mentioned above also applies here if the member is under 18.

However, apart from the rules on the protection of young workers and wages, the rules of the Labor Code that protect workers do not apply. Thus, student members are not entitled to holidays, severance pay, prohibitions or restrictions on dismissal, etc.

Taxation:

Given that a member of a student cooperative does not become insured by their employment in the cooperative, they do not have to deduct and pay the 18.5% social security contribution from the gross income due to them, nor do they have to pay social contribution tax.

Of course, the 15% personal income tax is also payable on income from student work, but the student is only liable for this one tax burden, so the difference between gross and net income from student work is only 15%, unlike employment.

Engagement Contract

Students also have the possibility to work on the basis of the Civil Law. Income received under an engagement contract is taxable as self-employment income.

Unlike income from employment, expenses can be deducted against income from self-employment. There are two ways of doing this: itemised or 10 per cent cost deduction without supporting documents.

Taxation

Personal income tax is also assessed on income from self-employment. The tax rate is also 15 percent.

However, the student will not automatically be insured. To be insured, the student's monthly income must be 30% of the minimum wage valid on the first day of the month in question, or 30% of the minimum wage on calendar days. In January 2021, the minimum wage is HUF 161 000, 30 percent of which is HUF 48 300. From 1 February 2021, the minimum wage is HUF 167 400, 30 percent of which is HUF 50 220. If the student does not work for the whole month, the pay per day must reach HUF 1 610 in January and HUF 1 674 from February to be insured.

If an insurance relationship is established, the student pays 18.5 percent social security contributions. In this case too, the employer deducts and declares the contribution to the NAV. If the monthly income of a student employed in another employment relationship is less than 30 percent of the minimum wage on the first day of the month in question, no insurance relationship is established and therefore no contribution is due.

SIMPLIFIED EMPLOYMENT

Students can also work in a simplified employment relationship. However, this is subject to specific areas defined by law. Simplified employment may be established in the following cases:

• seasonal agricultural and tourism work, or
• occasional work.

For occasional work, the employer and the employee can establish simplified employment for:

• up to 5 consecutive calendar days in total,
• a maximum of 15 calendar days in total within 1 calendar month, and
• up to a total of 90 calendar days in 1 calendar year

Taxation:

The employer pays the public charge in the case of simplified employment. The student does not have to pay social security contributions in advance.

OCCUPATIONAL SAFETY:

Unlike the Labour Code, the Act on Occupational safety and Health covers all organised work, regardless of the form it takes. For this reason, student workers must also comply with certain health and safety requirements, including the use of appropriate protective equipment and clothing, and the provision of healthy and safe working conditions.

It is also important to note that in the case of student work, the occupational helath and safety examinitaion cannot be waived, as it can only be waived in the case of simplified employment.

The employer or payer must also provide the student with a certificate of the amount paid, the deducted social security contributions, individual contributions and social security contributions. By 31 January of the year following the tax year, the student must also be given a summary statement for the tax year.