Salaries and payroll taxes in 2020, Hungary
Last updated on 3 July 2020.
UPDATE: As of 1 July 2020, employers’ taxes are reduced by 2%. Read more here.
2020 has just started, and the new regulation for Hungarian payroll taxes and salaries are in. The most significant change is the increase of the minimum wage.
Do you have employees on minimum wage? Read on!
A minimum wage is the lowest remuneration employers may legally pay to workers. 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 149,000 to gross HUF 161,000 as of 1 January.
- Guaranteed minimum salary is what those employees must receive whose position requires at least secondary education. This will be raised from gross HUF 195,000 to gross HUF 210,600 as of 1 January.
Please note that if this concern your employees, the gross salary must be modified in the employment contracts as of 1 January. If you would like to purchase a contract modification template, please contact us. Should you need assistance with this, we are happy to offer our services.
Salary calculation in 2020
In the table below, you can see the basic calculations for the minimum wage and the guaranteed minimum salary in 2020. 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) | 161,000 | 210,600 | 375,940 |
| Employee’s payroll tax (33,5%) | -53,953 | -70,551 | -125,940 |
| Net salary (to be paid out) | 107,065 | 140,049 | 250,000 |
| Employer’s tax (19%) | 30,590 | 40,014 | 71,429 |
| Company’s total payroll cost | 191,590 | 250,614 | 447,369 |
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 161,000, and the guaranteed minimum salary to HUF 210,600 as of 1 January. The managing director’s salary or the base of the minimum contributions also follow this increase.
If you are interested in the details, 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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