Hungary’s Minimum Wage Increase: Economic Challenges
The plan for a 14 percent minimum wage increase in 2027 is now in jeopardy. Employers argue that the economy’s performance cannot support the previously agreed-upon hike. According to László Perlusz, Secretary General of the National Association of Entrepreneurs and Employers (VOSZ), even a 10 percent increase may not be sustainable given the current economic outlook.
What Was Originally Planned?
A three-year wage agreement, negotiated under the previous Orbán government, outlined gradual increases. The plan aimed for a 9 percent rise in 2025, 11 percent in 2026, and 14 percent in 2027. The goal was for the minimum wage to reach half of the average gross salary.
Why Are Changes Being Discussed?
The economic environment has shifted significantly. Weaker-than-expected growth has made the original targets difficult to achieve. The 2026 increase was already revised down from 13 percent to 11 percent, resulting in a current minimum wage of 322,800 forints per month as of January 1st.
Perlusz explained that when the three-year agreement was made, economic growth projections were higher. Now, not only the 14 percent but even a 10 percent increase seems unrealistic from an employer’s perspective.
The Role of the New Government
The Tisza government’s policies could influence the final outcome. One of their campaign promises is to reduce the tax on the minimum wage from 15 percent to 9 percent. If implemented, this tax cut could allow for a double-digit increase in net wages even if the gross increase is below 10 percent.
What Do Unions Say?
While employers urge caution, trade unions are pushing for higher wages. Zoltán Róbert, President of the Hungarian Trade Union Confederation, believes the planned 14 percent increase might still be insufficient to reach the goal of half the average gross salary.
The Impact of Every Percentage Point
The final decision carries significant weight for minimum wage workers. Based on the current 322,800 forints:
- A 9 percent increase would raise the monthly gross wage to 351,852 forints.
- An 8 percent increase would mean 348,624 forints.
- A 7 percent increase would result in 345,396 forints.
- Compared to the originally targeted 374,600 forints for 2027
- Even a 9 percent increase would mean an annual shortfall of nearly 273,000 forints per worker.
Looking Ahead
Official wage negotiations for 2027 have not yet begun. Employers have not proposed a specific percentage but suggest a single-digit increase is realistic. The final amount will be determined through discussions between the government, employers, and employee representatives.
For businesses, the lack of predictability is becoming a major concern. Perlusz noted that „storm clouds are gathering over the economy,” and the coming months will reveal whether the current business confidence in the Tisza government will last.
While the exact figure for the 2027 minimum wage remains open, it is clear that the originally planned 14 percent increase is increasingly unlikely. The final outcome for workers’ net wages will heavily depend on whether the promised tax cuts become reality.
| Year | Increase (%) | Monthly Wage (forints) |
|---|---|---|
| 2025 | 9 | 351,852 |
| 2026 | 11 | 322,800 |
| 2027 | 14 | 374,600 |
