In which conditions salaries can be paid in foreign currency?

First of all, it is important to emphasise that, as a general rule, employers are obliged to pay all employees' salaries in HUF.

However, if the employee works abroad, it is also possible, by agreement between the parties, to set and pay the salary in foreign currency. 

Based on the legal regulations in force, the salary of a non-managerial employee can be paid in foreign currency only in this circumstance, i.e. in case of working abroad. 

Should it nevertheless occur that the salary is determined in foreign currency in the employment contract, this part of the employment contract is invalid, and the rule that the salary must be determined and paid in HUF will automatically apply, which has already been established in court practice.

A special rule applies to managerial employees, according to which the salary of a managerial employee can also be paid in foreign currency, regardless of the place of work. The parties must explicitly agree in writing to do so.

Who is considered a managerial employee?

According to the regulations, a managerial employee is the head of the employer and other employees under his/her direct control and entitled to substitute him/her, in whole or in part.

The employment contract may provide for the application of the provisions applicable to the manager if the employee fulfils a position of major importance or a position of high confidentiality for the employer's operations and his/her basic salary is seven times the minimum statutory wage ( 1.4 million HUF gross in 2022).

The manager of an employer (e.g. the chief executive of a limited liability company, the person exercising the employer's power) and any employee under his/her direct control and entitled to substitute him/her are in any case considered to be employees in a managerial position. There is no discretion here.

If the employee fulfils a position of high importance or a position of high confidentiality for the employer's operations, the parties may decide to make him or her a managerial employee. This also requires that the basic salary must be seven times the statutory minimum wage.

An activity that is essential to the employer's operations because of the employee's exceptional competence may be considered to be outstanding. With regard to "highly confidential work", the Explanatory Memorandum to the Act provides that work can be considered highly confidential if its performance requires a level of trust that is much higher than the average. These jobs are characterised by the fact that the employee has much more confidential information than the average employee about the employer's operations or handles significant financial assets.