Hungary: Minimum wage country profile

Minimum wage regulation

The general law which regulates the minimum wage since 2012 is the Labour Code (Act I of 2012), Article 153. It mandates an annual revision of both the mandatory minimum wage and the guaranteed minimum wage amounts.

The annual statutory minimum wage is set by Government Decree, which is published in the Hungarian Gazette (Magyar Közlöny, MK). The minimum wage decrees specify not only the monthly but also the weekly, daily, and hourly statutory minimum wages. The most recent update of the minimum wage was set by Government Decree 394/2024 of 12 December 2024.

• Labour Code (Act I of 2012)
• Government decree 394/2024 (XII.12.)

In October 2024, significant changes to the minimum wage rules were introduced. The Government Decree 308/2024 (X. 24.) “On the detailed rules for the consultation of the mandatory minimum wage and the guaranteed minimum wage and amending certain government regulations to transpose Directive (EU) 2022/2041 of the European Parliament and of the Council of 19 October 2022 on the minimum wage to be guaranteed in the European Union” contains several amendments. The most important changes are the ones that:

• clarify the legal status of the VKF as a forum for minimum wage negotiations; the rights and obligations of the partners (employers, workers' representatives and the government)
• define the criteria to be taken into account when setting the minimum wage
• lay down the precise procedure and conditions for minimum wage negotiations
• state that the minimum wage should aim at 50% of the average regular gross wage

Actors involved in determining the minimum wages

The annual minimum wage is negotiated by the tripartite Permanent Consultative Forum of the Competitiveness Sector and the Government (VKF). The VKF was set up in 2012.

The members of the VKF are the government, three trade union confederations, and three main employers' organisations.

Trade unions:

• Democratic League of Independent Trade Unions (LIGA)
• Hungarian Trade Union Confederation (MASZSZ)
• National Federation of Workers' Councils (MOSZ)

Employers’ organisations:

• National Federation of General Consumption Cooperatives and Trade Associations (ÁFEOSZ-Coop Szövetség, KÉSZ)
• National Confederation of Employers and Industrialists (MGYOSZ)
• National Association of Entrepreneurs and Employers (VOSZ)

Since its establishment, the membership of the VKF has remained unchanged. The annual minimum wage is referred to in the VKF statutes. Point 3.b) of the rules of procedure states that the members of the VKF shall consult and agree ‘on proposed government measures affecting the income of workers in the competitive sector (compulsory minimum wage, guaranteed minimum wage, wage supplements) [...]’

Article 153 of the Labour Code provides for the setting of the minimum wage but does not mention the VKF. It instead states that ‘the government shall set the minimum wage by decree, after consultation with the National Economic and Social Council (NGTT)’. Indeed, the NGTT discusses the principles for raising the minimum wage every year, but it does not decide on the level of the minimum wage increase. Nor is it able to do so as it represents not only the social partners but also academia, the churches, the arts and NGOs.

Until 2024, the VKF was not regulated by law. It was included in the organisational and operational rules of the Ministry of Economic Development (Gazdaságfejlesztési Minisztérium, GFM).

The Government Decree 308/2024 (X. 24.) Article 1 (1)] designates the VKF as the forum for minimum wage negotiations, creating a clear legal basis for minimum wage negotiations. The activities, membership and mandate of the VKF have not changed, only its legal status.

Process of setting the minimum wage

The principles for setting the annual minimum wages, for both unskilled (‘standard’) and skilled workers (‘guaranteed’), have not changed in the last ten years. Article 153 of the Labour Code gives the government the power to set minimum wages, after consulting the social partners. The minimum wage is negotiated mainly between employers' and workers' organisations in the framework of the VKF. If social partners reach an agreement, the government, when setting the adjustment by decree, is bound by the level reached through social partners’ agreement. If social partners do not reach an agreement, the government can set the minimum wage level unilaterally. However, this has not happened over the past ten years.

The government's approach to negotiating the minimum wage has varied in recent years. There have been years (for example, in 2022) when the government came to the negotiations with a concrete proposal (which was accepted by the social partners), and years when the government did not intervene at all, despite the social partners' failure to reach an agreement. For instance, in 2020 the minimum wage did not finally enter into force until February of the following year (2021). In 2023 and 2024, the social partners reached an agreement in time and the relevant government decree was published in the Hungarian Gazette in early December.

Law 308/2024 provides for the following rules on the procedure for setting the minimum wage

Article 4 In the VKF, a decision or an agreement requires the agreement of a majority of the representatives of the employers' and employees' organisations on each side and the agreement of the representative of the Government.

Article 5 stipulates that the Minister shall initiate the first meeting of the VKF Monitoring Committee for consultation on the next year's mandatory minimum wage and guaranteed minimum wage by 30 September each year and shall simultaneously send the latest data and forecasts on the macroeconomic indicators to the members of the VKF. These indicators are listed in the table in the next chapter.

Article 6: The first meeting for consultation on the minimum wage and guaranteed minimum wage for the following year shall be held no later than 15 October each year.

Article 7 (1): Members shall endeavour to conclude the consultation on the next year's minimum rates of pay and guaranteed minimum wages by holding the required number of meetings by 1 December each year.

Article 7 (2): In the event of the deadline laid down in paragraph 1 being exceeded, the consultation shall be concluded on the date of the agreement on the amount of the minimum wage and the guaranteed minimum wage for the following year.

Article 8 (1) The VKF shall review the amount of the statutory minimum wage and the guaranteed minimum wage every calendar year but may also review them within a calendar year.

Article 8 (2) In the case of a review within a calendar year as referred to in paragraph (1), the Minister shall provide the macroeconomic data available for consultation.

Article 8 (3) If the VKF decides to increase the amount of the statutory minimum wage and the guaranteed minimum wage within the calendar year, the amount and the date of entry into force of the increase shall be laid down by the Government in a decree within 30 days of the agreement.

Criteria referred to in minimum wage setting

According to the Labour Code (art. 153 § 3), when determining the minimum wage, the characteristics of the national labour market, the situation of the national economy, the labour market situation of economic sectors and geographical areas must be taken into account. This shows that the law does not rule out the setting of sectoral or regional minimum wages, but in practice these types of wages are never set. As far as economic indicators are concerned, the wording of the law is very broad.

In 2016, a six-year tripartite wage agreement was signed by the social partners which set out the mechanism for raising the annual minimum wage until 2022 (based on average wage increase, gross domestic product (GDP) growth and the decrease of social contribution tax). However, this was discontinued after a few years due to the hectic evolution of economic indicators (and for example the impact of COVID). But what has been retained from the agreement is the reduction in social contribution tax each year, which was kept by the government until 2022.

The economic variables considered in the consultation on minimum wages have depended on the characteristics of the economic situation in the corresponding year. Until 2020, in a period of low inflation, the main benchmarks were average wages and economic growth. In 2021, the year of the economic downturn due to the COVID-19 pandemic, the main dilemma was the ability of employers to raise wages.  In 2022 and 2023, (characterised by extraordinarily high inflation), the aim has been to preserve the real value of the minimum wage. This has shifted the focus onto the inflation forecast.

Government Decree 308/2024 (X. 24.), Article 9 stipulates that the VKF shall determine the amount of the statutory minimum wage and the guaranteed minimum wage taking into account the following objectives: the achievement of a decent standard of living, the reduction of in-work poverty and the promotion of social cohesion and upward social convergence, and the reduction of the gender pay gap.

The following fundamental principles are to be taken into account in determining the amount and scope of the minimum wage and the guaranteed minimum wage, as set out in Article 10 of the law 308/2024:

a) the provisions of the Labour Code. Article 153 (3) of the Labour Code (characteristics of the national labour market, the situation of the national economy, the labour market situation of economic sectors and geographical areas,

b) the purchasing power of the statutory minimum wages, taking into account the cost of living,

c) the general level and distribution of wages,

(d) the rate of wage growth,

(e) long-term levels and trends of national productivity.

According to Article 5 of Law 308/2024, the government shall provide the following macroeconomic data and forecasts to the negotiating parties by 30 September.

Only the five criteria are listed in the law as they appear in the first column, without clarification. The second column indicates how these indicators are interpreted and specified by the negotiating parties.

At the time of the negotiations, the data listed above are available for different periods of the current year: GDP and productivity data are available for the first three quarters of the year, while inflation, employment and wage data are typically available for the first 8-9 months. The forecasts are provided by the government and the national bank, but the social partners often argue with forecasts from independent analysts, as well.

When determining minimum wages, the parties obviously focus on the next year's macroeconomic forecasts, but they also take medium-term trends into account.

In November 2024, the social partners reached a 3-year minimum wage agreement. Under this agreement, the minimum wage will rise by 9% in 2025, 13% in 2026 and 14% in 2027. The real economic condition for the minimum wage increases in 2026 and 2027 are as follows, in percent, in year-on-year terms.

The agreement stipulates that if the arithmetic sum of the deviations of the indicators exceeds one percentage point, either positively or negatively, based on the average actual data for the first three quarters of the year under review, the members of the VKF will renegotiate the rate of increase of the minimum wage for 2026 and 2027.

In the agreement, the government has agreed that employers will have to pay social contribution tax on the previous year's minimum wage for as many of their employees as earned the minimum wage between 1 September and 15 November 2024. And the same in 2026 and 2027, when employers would have to pay a social contribution tax equal to the level of the previous year's minimum wage in both years.

Article 11 of the Government Decree 308/2024 states of the that social partners shall endeavour to ensure that the statutory minimum wage and the guaranteed minimum wage reach 50 per cent of the average regular gross earnings calculated on the basis of the data available from the Central Statistical Office for the preceding year. The Decree doesn’t set a deadline for the minimum wage to reach 50% of the average gross wage, only that this should be the target in the future.

Coverage of the minimum wage and exemptions

The statutory minimum wage applies to all workers in Hungary, including the self-employed. The only exception is public workers, who may earn about half the minimum wage (about 65,000 persons in 2024), and their numbers are falling as public workers are increasingly absorbed by the free labour market).

Part-time workers are paid a pro rata minimum wage (weekly, daily and hourly minimum wages are also regulated by law).

In the case of piece-rate wages or other types of performance wages, the performance requirement must be set at such a level that, in the case of meeting 100% performance requirements, the wage reaches at least the minimum wage defined by law (art. 138(5) of Act I of 2012 on the Labour Code). This means that, at least in theory, wages of workers compensated based on performance pay can fall below the level of minimum wage – if they do not reach 100% of the performance requirements. More specifically, art. 138(6) of the Labour Code provides that for employees compensated solely based on performance pay, it is mandatory to determine a minimum wage equivalent to at least half of the base salary (this provision must be intended in full-time equivalent terms)

Subminima and higher rates

In Hungary, there are no subminima connected to the statutory minimum wage. Only public workers, mentioned in the previous point, may earn less than the statutory minimum wage. Public workers' wages are set by the government annually on a unilateral basis.

There are two types of minimum wages: the ‘standard’ minimum wage and the ‘guaranteed’ minimum wage, the latter applicable to those with at least secondary education and introduced in 2006. The guaranteed minimum wage is about 25-30% higher than the standard minimum wage.

The proposal to merge the two types of minimum wage has been made several times in recent years. This would also be justified by the fact that the number of people employed on the standard minimum wage is steadily decreasing (In 2024, 214,000 people worked on the minimum wage, 325,000 on the guaranteed minimum wage, and 199,000 in between). No agreement has been reached so far, but in recent years the standard minimum wage has risen more than the guaranteed minimum wage, which has reduced the gap between the two types of minimum wage.

Some trade unions oppose the approximation of the two minimum wages, arguing that it puts skilled workers at a disadvantage compared to unskilled workers, possibly discouraging participation in education.

Frequency of payments and how the rate is defined

The statutory minimum wages include 12 monthly payments a year, with no additional monthly bonus. Every year a governmental decree on the minimum wage regulates the monthly, weekly, daily and hourly minimum wage in detail. The daily rate is for 8 hours, the weekly rate for 40 hours and the monthly rate for one calendar month (Govt Decree 508/2023, Section 3)

If the daily working time is less than (or more than) eight hours, the daily wage must be reduced (or increased) by the minimum wage per hour.

What counts towards the minimum wage

The annual minimum wage decrees of the government do not provide for any deductions or bonuses. Art. 153 of the Labour Code does not provide for any additional allowances either. The only condition is that the remuneration for the work must reach the minimum wage laid down by law.

A minimum wage worker is entitled to overtime and holiday allowances in the same way as any other worker. For this time, they are paid the daily or hourly minimum wage with the same multiplier as for non-minimum wage workers. The law does not mention any ‘board and lodging’ provisions, which implies that minimum wage earners are treated in the same way as other employees.

Regular national report on minimum wage setting

There is no regular report on the evolution of the minimum wage in Hungary in the sense of analysis of the impact of minimum wage increases, as there is no organization specifically dedicated to the evolution of the minimum wage. There exist only ad-hoc studies by independent researchers.

Other country resources on minimum wages

• Balatoni, A. (2020), ‘A hazai minimálbér szintje megfelel gazdasági fejlettségünknek’. (‘The level of the domestic minimum wage corresponds to our economic development’) Magyar Nemzeti Bank. 18 November
• Gallai, S., Tóth, M.B. (2022), ‘Kinek fáj a minimálbér-emelés?’ (Who does the minimum wage increase hurt?) Corvinák, 14 January.
• Köllő, J. (2021), ‘Nálunk minden fordítva történt’ (With us, everything has been the other way around), Magyar Narancs, 11 October.
• MKIK-GVI (2024), The impact of increases in the minimum wage and guaranteed minimum wage on domestic enterprises. Quick Analysis - 21 November 2024.
• Molnár, D., Regős, G., (2023),A minimálbér emelés mint gazdaságpolitikai eszköz (Minimum wage increase as an economic policy tool), Polgári Szemle, 2023/1-3, pp. 13-30. ‘A minimálbér emelés, mint gazdaságpolitikai eszköz’
• Nábelek, F. (2022), A minimálbér és a garantált bérminimum emelésére adott vállalati válaszok, bérváltozások – 2022 (Business responses to minimum wage and guaranteed minimum wage increases, wage changes – 2022), MKIK-GVI, Institute for Economic and Enterprise Research at the Hungarian Chamber of Commerce and Industry, Budapest.
• Pogátsa, Z. (2022), ‘Az európai minimálbérre még éveket kell várni’ (The European minimum wage is still years away’), Novekedes.hu, 20 June
• Scharle, Á., Váradi, B., Krekó, J. (2022a), ‘Mire és hogyan hat a minimálbér-emelés?’ (What and how the minimum wage increase affects?) G7 EKONOMI, 10 December.
• Scharle, Á., Váradi, B., Krekó, J, (2022b), Mire nem jó a minimálbér-emelés? (What is the minimum wage increase not good for?) G7 EKONOMI, 14 December.
• Virovácz, P. (2021), ‘A túl magas minimálbér árát végül a háztartások fizetik’ (‘Households ultimately pay the price of an excessively high minimum wage’), Portfolio.hu, 23 June.

Updated 19/03/2025