There is still no Hungarian pay transparency legislation: What should companies do now?

Why prepare for pay transparency now if there is still no Hungarian regulation?

For organizations, the greatest challenge is not necessarily the legislation itself, but whether they already have the necessary data, job structures, and digital HR processes in place to ensure compliance. NEXON’s digital HR and payroll solutions can support companies by helping them manage compensation data, carry out analyses, generate reports, and establish transparent HR processes.

At previous professional events and in its educational materials on pay transparency, NEXON has consistently emphasized that preparation should not be postponed until the publication of the Hungarian legislation. Companies that begin implementing the necessary organizational, data management, and technological changes now will be in a stronger position.

According to NEXON’s experts:

“Organizations that do not wait for the legislation to be published, but instead start building the foundations of transparent and data-driven compensation management today, will have a significant advantage—provided they have not already taken these steps.”

What happened on 7th of June and why is it important for Hungarian companies?

EU Directive 2023/970 on pay transparency required Member States to transpose its provisions into national law by 7th of June 2026. In Hungary, however, the final regulation had not yet been adopted by the deadline.

This does not mean that companies can afford to delay their preparations.

• strengthening the principle of equal pay for equal work;
• reducing the gender pay gap;
• making compensation systems more transparent;
• expanding employees’ rights to information;
• transforming recruitment processes.

The question is therefore no longer whether the regulation will be introduced, but how prepared companies will be when it arrives.

Which companies are likely to be affected first by the pay transparency regulation?

Based on the currently available EU framework, larger employers are expected to be subject to reporting obligations earlier.
 

Number of employees	Expected obligation
More than 250 employees	Annual gender pay gap reporting
150–249 employees	Regular reporting obligation
100–149 employees	Reporting requirement introduced at a later stage
Fewer than 100 employees	Direct reporting obligations may not apply in every case, but several transparency principles may still be relevant

The exact application of these thresholds under Hungarian law may still change; however, for larger organizations, preparation is already becoming an urgent priority.

Why is it not worth waiting for the Hungarian legislation before preparing?

Compliance cannot be achieved overnight

Pay transparency is not simply about modifying a single HR process. Companies will need to review, among other things:

• their job structures,
• salary bands,
• compensation policies,
• performance evaluation systems,
• HR data management and reporting processes,
• and leadership communication practices.

The necessary data is often not readily available

In many organizations, compensation data is stored across multiple systems using different structures.

The preparation process typically requires:

Establishing a job architecture framework

• identifying equivalent positions
• creating job families
• defining comparable roles

Reviewing compensation structures

• establishing salary bands
• documenting justifiable pay differences
• defining objective compensation criteria

Organizing HR data

• developing reporting capabilities
• cleansing existing data
• and automating analytical processes

What does pay transparency actually mean in practice?

Pay transparency has become one of the most frequently discussed HR topics in recent years, yet many misconceptions still surround it. Many companies continue to view it primarily as a legal compliance issue, while in reality it represents a broader shift in mindset that affects everything from compensation systems and recruitment practices to managerial decision-making.

It is not about making individual salaries public

One of the most common misconceptions is that employees will eventually have access to the exact salaries of their colleagues. However, this is not the objective of the European Union’s Directive.

Instead, the regulation focuses on ensuring that employees have a transparent understanding of the criteria used by employers to determine salaries and career progression opportunities. The emphasis is on objectivity, comparability, and equal treatment.

Companies will need to place greater emphasis on ensuring that compensation decisions:

• are based on clear criteria,
• can be properly documented,
• rely on consistently applied rules,
• and do not create unjustified differences between employees performing the same work or work of equal value.

The importance of job architecture is increasing

One of the fundamental pillars of pay transparency is a clearly defined job architecture system.

In practice, many organizations have employees performing similar tasks under different job titles, while in other cases the same job title may cover significantly different levels of responsibility.

To support compliance, companies should consider:

• reviewing job descriptions,
• establishing job families,
• defining competency requirements for each position,
• reviewing career progression levels,
• and standardizing the overall job structure.

This not only supports regulatory compliance but can also strengthen performance management and succession planning processes.

Data-driven HR operations are essential

One of the greatest challenges of pay transparency is that, without high-quality and well-structured data, it is virtually impossible to meet the expected reporting and analytical requirements.

Organizations increasingly need to have an accurate understanding of:

• their compensation structures,
• job categories,
• gender pay gaps,
• benefits systems,
• and promotion and salary increase practices.

Digital HR systems play a crucial role in this process by supporting the consistent management of data and enabling comprehensive analysis.

What new expectations could emerge in recruitment?

One of the best-known elements of the Directive is that candidates may receive information about the salary level or salary range associated with a position at an early stage of the recruitment process. In addition, employers will no longer be allowed to ask applicants about their previous salary.

This may bring significant changes to:

• the content of job advertisements,
• recruitment and selection processes,
• compensation strategies,
• and employer branding activities.

Companies should therefore begin establishing salary bands and communication frameworks that can later serve as the foundation for transparent recruitment practices.

Why is pay transparency a strategic issue for HR?

For many years, pay transparency was viewed primarily as a legal and compensation-related issue. However, recent developments have shown that it is about much more than compliance.

Beyond compliance: A competitive advantage

As the labour market continues to evolve, employees are placing increasing importance on fair and transparent compensation practices.

Transparent operations can contribute to:

• attracting top talent,
• retaining employees,
• reducing turnover,
• strengthening the employer brand,
• and increasing organizational trust.

For this reason, preparing for pay transparency should not be viewed merely as a compliance project, but as a long-term business investment.

A shared responsibility between HR and business functions

Successful preparation requires collaboration across multiple areas of the organization.

The following functions are typically involved:

• HR,
• payroll,
• compensation and benefits,
• finance,
• legal,
• IT,
• and senior management.

Pay transparency is therefore not solely an HR matter, but a strategic, company-wide initiative.

Digitalization plays a key role

The success of preparation largely depends on an organization’s ability to operate in a data-driven manner.

A recurring message throughout NEXON’s previous professional materials and workshops has been that pay transparency is not a one-time compliance project but requires the establishment of a continuously operating system.

This requires digital HR solutions capable of supporting:

• unified data management,
• the administration of job structures,
• compensation data analysis,
• reporting,
• management decision support,
• and auditability.

NEXON’s digital HR and payroll solutions can help organizations establish and operate these processes. The right technological background not only supports future legal compliance but also contributes to the development of a more transparent, efficient, and data-driven HR operation.

How can digital HR systems support pay transparency?

One of the key success factors in implementing pay transparency is the quality and availability of data.

Digital HR solutions can support:

• the consistent management of job-related data,
• the structured storage of compensation data,
• data analysis,
• report generation,
• ensuring auditability,
• and management decision support.

NEXON solutions already provide a wide range of functionalities that support transparent and data-driven HR operations, allowing companies to begin preparing now rather than waiting for the legislation to be enacted.

How can NEXON help companies prepare for pay transparency?

NEXON’s previous professional workshops and expert materials have consistently emphasized that the ultimate goal extends beyond compliance—it is about establishing more conscious and equitable compensation practices.

Key elements of the preparation process may include:

• consolidating HR data,
• structuring job roles,
• digitalizing compensation processes,
• implementing data-driven reporting,
• supporting management decision-making,
• and preparing for future reporting obligations.

NEXON’s digital HR and payroll solutions support organizations in preparing for pay transparency by helping them manage employee and compensation data consistently, digitalize HR processes, analyse data, and support management decision-making. The availability of transparent, structured, and up-to-date data may prove essential for meeting future reporting and compliance requirements.

For many organizations, the greatest risk is not the regulation itself, but the lack of preparation. Companies that begin implementing the necessary organizational, data management, and technological developments today, rather than waiting for the legislation to be published, are likely to gain a competitive advantage.

What should HR and business leaders do now?

Over the coming months, organizations should consider:

• assessing their current compensation structures,
• identifying critical gaps in data and processes,
• establishing or reviewing salary bands,
• preparing the necessary reporting processes,
• using digital HR tools to support data management and analysis,
• and monitoring the publication of the Hungarian legislation.

What risks does a lack of preparation create?

Although the Hungarian legislation has not yet been published, it may be risky for companies to assume that preparation can wait until after the regulation is officially adopted. Pay transparency affects areas that may require considerable time to redesign and implement.

Recruitment disadvantages may arise

There is a growing demand in the labour market for transparent compensation practices. Employees—particularly in high-demand professions—already expect clear information about compensation.

Companies without well-defined salary bands or a consistent compensation framework may find it more difficult to adapt to the new expectations.

In the future, employers that:

• communicate clear salary ranges,
• offer objective career progression opportunities,
• maintain transparent compensation policies,
• and build a credible employer brand

are likely to gain a competitive advantage.

Employee Dissatisfaction May Increase

One of the primary objectives of pay transparency is to strengthen trust.

If an organization cannot demonstrate that pay differences are based on objective factors, this may have a negative long-term impact on:

• employee engagement,
• organizational culture,
• retention,
• and the credibility of leadership.

Employees are becoming increasingly conscious about compensation practices, meaning that a lack of transparency can also create reputational risks.

Late preparation can result in a significant administrative burden

Many companies currently manage HR and payroll data across several different systems. If the required reports can only be generated through manual data collection, substantial resources may be required.

Delayed preparation often leads to:

• data cleansing projects,
• parallel data management,
• manual reporting,
• additional costs,
• and rushed system developments.

These issues can be significantly reduced through proper planning and digitalization.

There is no reason to delay preparation

Although the final Hungarian pay transparency regulation had still not been published after the 7 June 2026 deadline, companies should not regard this as an opportunity to postpone action. Reviewing job structures, reassessing compensation frameworks, organizing data, and establishing reporting processes can take months—and in some cases, even years.

NEXON’s digital HR and payroll solutions support organizations in preparing for pay transparency by helping them manage data consistently, digitalize HR processes, prepare reporting activities, and build more transparent, data-driven decision-making practices.

Today, the key question is no longer whether the Hungarian regulation will be introduced, but rather how prepared companies will be when it arrives.

The 7 June deadline has passed, but the preparation period is far from over. On the contrary, this is the stage at which organizations that take a proactive and strategic approach can gain a competitive advantage.

FAQ – Frequently Asked Questions

Has the pay transparency act already been adopted in Hungary?

No. Although the 7 June 2026 deadline has passed, the Hungarian legislation has not yet been published.

Has the EU pay transparency directive been postponed?

No. The European Commission has indicated that it does not intend to postpone the implementation of the Directive.

Which companies are likely to be affected first by the reporting obligations?

Primarily companies with more than 250 employees, followed gradually by employers with smaller workforces.

Which areas does pay transparency affect?

It impacts compensation, recruitment, job architecture, HR data management, reporting, and management communication.

How can NEXON help companies prepare?

NEXON’s digital HR and payroll solutions support structured data management, analysis, reporting, and preparation for pay transparency requirements, enabling organizations to take the necessary steps well before the legislation comes into force.