A significant minimum wage increase is expected in Hungary: the gross amount will be 374 thousand forints by 2027

By: Trademagazin Date: 2024. 11. 22. 11:16

The minimum wage in Hungary will be increased by 9 percent next year, by 13 percent in 2026, and by a further 14 percent in 2027, according to Portfolio, which was also confirmed by Sándor Czomba, the State Secretary responsible for employment policy. According to forecasts, the minimum wage will reach half of the regular gross average earnings by 2027, which is a significant milestone in domestic wage policy – writes Telex.

The minimum wage increase could have a significant impact on the Hungarian labor market, although it is worth noting that a smaller proportion of employees in Hungary work for the minimum wage. Many prefer to receive the guaranteed minimum wage, which is the lower wage limit for jobs with higher amounts and requiring professional qualifications.

While the minimum wage increase was agreed for several years, the guaranteed minimum wage only has a one-year increase, which will increase by 7 percent in 2024. The gap between the two wage levels has gradually narrowed in recent years, and based on current trends, it is possible that the minimum wage will catch up with the guaranteed minimum wage by 2027. However, this will be decided in wage negotiations in the coming years.

The rising minimum wage could mean an increase in the tax burden for many small businesses and sole proprietors, as these wage increases directly increase the costs of employment. This could be particularly challenging for smaller companies and less profitable sectors, where a significant proportion of wages are around the minimum wage.