Salaries and payroll taxes in 2021, Hungary
With a new year come new regulations concerning salaries – most importantly, an increase to the minimum wage and the guaranteed minimum salary. The most important payroll taxes and contributions to be paid the employer and the employee remain the same.
Do you have employees on minimum wage? Read on!
A minimum wage is the lowest remuneration employers may legally pay to workers. It is adjusted regularly (at least yearly) by the government to ensure that it remains a living wage in Hungary. When we speak about minimum wage, we must differentiate between the following two groups:
- Minimum wage is what those employees must receive whose job does not require any specific skills. This will be raised from gross HUF 161,000 to gross HUF 167,400 as of 1February 2021.
- Guaranteed minimum salary is what those employees must receive whose position requires at least secondary education. This will be raised from gross HUF 210,600 to gross HUF 219,000 as of 1 February.
Please note that if this concerns your employees, the gross salary must be modified in the employment contracts as of 1 February.
Salary calculation in 2021
In the table below, you can see the basic calculations for the minimum wage and the guaranteed minimum salary, together with the relevant payroll taxes in 2021. We have also added a third amount, for HUF 250,000 net for comparison. To check salary costs for other salaries, visit our salary calculator, or see our table for recommended salaries.
The below amounts are all in HUF. Detailed explanation follows below the table.
| Minimum wage | Guaranteed minimum salary | Other salary | |
| Gross salary (in the contract) | 167,400 | 219,000 | 375,940 |
| Employee’s payroll tax | |||
| 15% Income tax | 25,110 | 32,850 | 56,391 |
| 18.5% Social security contribution | 30,969 | 40,515 | 69,549 |
| Net salary (to be paid out) | 111,321 | 145,635 | 250,000 |
| 17% Employer’s tax | 28,458 | 37,230 | 63,910 |
| Company’s total payroll cost | 195,858 | 256,230 | 439,850 |
The gross salary is what you usually agree on with your employee, and what you put in the labor contract. Employees have to pay taxes and contributions from that (these are the employee’s payroll taxes), which your company deducts and forwards to the authorities for your employees. This way only the net salary is paid to the employee.
Moreover, your company will have to pay contributions for employing someone. These are called employer’s taxes. The sum containing the gross salary (net salary + employee’s taxes) and the employer’s taxes is the total company cost. This is what any given employee actually costs your company.
Do you take salary as a managing director? Are you paying minimum contributions? Read on!
The Hungarian minimum wage will increase to HUF 167,400, and the guaranteed minimum salary to HUF 219,000 as of 1 February 2021. The managing director’s salary or the base of the minimum contributions also follow this increase.
If you are interested in the details of payroll taxes in 2021, contact your English speaking accountant and we will send you a detailed breakdown. Not our client yet? Learn more about our accounting and finance services here, or call our office on +36.1.317.8570 to ask for a free initial consultation. You may also fill in the form below to contact us.
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