Tipping and service fees at Hungarian restaurants

Tipping culture in Hungary

If you travel a lot, you have probably noticed that tipping culture is different in different parts of the world. Tipping is most conspicuous in the hospitality industry, in hotels and restaurants, although giving a tip may be expected in other service industries: you might be expected to tip the hairdresser, the taxi driver, or even the plumber. However, tipping is not something you would expect when you simply buy something at a store or at a self-service restaurant.

In Hungary, tipping is always optional, meaning that your total will not include a tip to your server. However, any seller can ask for a tip, and it is even expected in some cases (especially when actual service is being provided). When you dine out, the standard tip is around 10%, and any deviation from that indicates your satisfaction (or dissatisfaction) with the service. Tipping less than 5% might be considered rude, while tipping 15-20% indicates extraordinary service. Tips are not subject to taxes.

In 2005, a fairly new concept was introduced to Hungarian hospitality: the service fee or service charge (called “szervizdíj” or “felszolgálási díj” in Hungarian). The intention was to make tipping more transparent and predictable (as well as taxable), but unfortunately it rather muddied the waters regarding tipping expectations. The service fee is like a mandatory tip: the establishment has to decide whether it wants to apply a service fee, which will then be part of the bill, and distributed among employees after taxes. The service fee can be up to 15%.

Tips are often expected on top of service fees. This is partly because of cultural reasons (customers tip to reward excellent service by a particular server).

If you want to set up an establishment selling food or drinks, you should consider whether you want to impose a service fee on your customers. Since tips and service fees are managed and taxed differently, this decision will have a significant impact on your cash management workflow.

Tips are volatile but tax free

Tipping is optional for your customers, but any provider can legally allow customers to tip (these days, even bakeries or small take-out shops have the option). When dining out, the standard tip is around 10%, although some people will inevitably tip either less or more. As a result, income from tips is not exactly predictable. Tips are sometimes kept by the actual servers receiving them, but often pooled and then split between the employees, which can involve not only the servers, but also other contributors to the service, such as bartenders, cooks, or kitchen workers. In any case, there should be a written agreement between the employer and the employees about how tips are collected, split, and paid out. Distribution does not have to be equal: it may account for various factors, such as position or hours worked.

In Hungary, customers can tip in cash or by card. Employers must keep track of the cash tips they received, which means keeping daily logs. The total sum received as tips must be paid out to employees monthly on top of their regular wages. At the same time, tips are not considered part of the revenue of the establishment, and are supposed to be kept and managed separately. As such, tips are tax exempt: they are subject neither to VAT nor to payroll taxes.

Service fees are predictable but taxed

A service fee can only be applied by establishments where food or drinks are served, such as restaurants, cafés, bars, pubs, confectionaries, or night clubs. A service fee cannot be applied at fully self-service establishments, where there is no human interaction with a server. The owners or managers should decide whether they want to apply a service fee, which will then be added to every bill. The service fee can be up to 15% for retail customers, and 20% for business customers (the standard is still around 10%).

The service fee must be clearly communicated to customers. It should either be incorporated into the prices on the menu, or the menu should have a visible disclaimer. Whichever method you choose, the service fee must be indicated separately on the bill.

The service fee is taxed. It includes the same amount of VAT as the food or drink it is based on. As a result, service fee should be calculated precisely, at least by VAT groups on the receipt. After VAT is deducted from it, the resulting net service fee can be distributed among the contributors to the service, who pay social security contribution (18.5%) after it, although technically it is the employer who should calculate the social security contribution and pay it on behalf of the employees before they pay out the reduced service fees, similar to how regular salaries are paid. Please note that unlike regular salaries, the service fee is not subject to either social contribution tax (13%) or personal income tax (15%). Other taxes on the establishment cannot be used to reduce the sum paid out to employees either.

Contributors to the service can include waiters, servers, bartenders, kitchen workers, musicians, and even the administrative workers of the establishment. In any case, there should be a written agreement between the employer and the employees about how service fees are split and paid out. Distribution does not have to be equal: it may account for various factors, such as position or hours worked.

Most importantly, the service fee cannot be incorporated into the salary of the employees. It must be paid on top of the salaries, and the entire net amount must be paid out to the employees.

New rules from February 2026

According to a new rule, restaurants and confectionaries may distribute up to 20% of their gross revenues among their employees in line with the rules of service fees (so without paying the social contribution tax and the personal income tax).

• They can do this even if the establishment does not actually charge a service fee, even though the law would allow it to do so.
• The rule applies only to restaurants and confectionaries, not to any other establishments where food and drink are served.
• The extra payment must be made on top of salaries, and cannot be used to avoid paying at least the minimum wage.

Additionally, service fees paid out to employees are not considered personnel related costs in the case of KIVA companies (subject to the Small Business Tax).

Helpers Finance at your service

When you set up a Hungarian business in the hospitality industry, make sure to discuss tipping and service fees with your accountant well in advance. Your decision will impact how workflows for managing the extra cash (and probably the extra taxes) should be set up.

Helpers Finance focuses on supporting international entrepreneurs starting a business in Hungary. We take care of accounting and finances, so you can focus on what you know best: growing your business.

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