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Salaries and payroll taxes in 2024, Hungary

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Salaries and payroll taxes in 2024, Hungary

Like every year, minimum wages have recently been adjusted to offset the impact of inflation. The minimum wage was increased by ca. 15%, and the guaranteed minimum salary by ca. 10%. There have been no changes to payroll taxes in 2024. At the same time, there are some new features for the SZÉP Card.

Increase already from December 2023

While minimum wages are normally introduced at the start of the new year, this time around they are applied early, already starting from December 2023. The decision was made to better compensate for the stubbornly high inflation throughout 2023.

Do you have employees on minimum wage? Read on!

The minimum wage represents the lowest payment an employer can offer to any employee. In Hungary, it is determined on a monthly basis and undergoes regular adjustments (at least annually) by the government to ensure it remains a living wage. There are, in fact, two types of minimum wage, depending  on the qualifications needed for the position:

  • The minimum wage must be paid to employees whose job does not require a high school diploma or any higher qualification. This has been increased by ca. 15% from HUF 232,000 gross to HUF 266,800 gross as of 1 December 2023.
  • The guaranteed minimum salary must be paid to employees whose job needs at least a secondary education or a high school diploma. This has been increased by ca. 10% from HUF 292,400 gross to HUF 326,000 gross as of 1 December 2023.

If you have employees who receive either the minimum wage or the guaranteed minimum salary, it is essential to raise their salaries to comply with the mandated minimum and adjust their employment contracts accordingly.

This adjustment will lead to an increase in your costs, encompassing not only the salary raise but also the additional payroll taxes you, as an employer, are obligated to cover (more details below).

Do you take a salary as a managing director? Are you paying minimum contributions? Read on!

The Hungarian minimum wage has increased to HUF 266,800 and the guaranteed minimum salary to HUF 326,000 as of 1 December 2023. The managing director’s salary or the base of the minimum contributions also follow this increase. Read more here.

Salary calculation in 2024

In Hungary, the employer and the employee always agree on the gross salary, and this is what gets included in the labor contract. When minimum wages are considered, that always refers to the gross salary.

From this gross salary, employees need to pay taxes and contributions, but exemptions are available based on age and marital status. This means that even if the gross salary stays the same, the actual money employees take home, known as the net salary, might vary. The taxes to be paid by the employee are in fact calculated by the employer who also forwards them to the Tax Authority, so the employees receive only their net salaries.

Additionally, the employer is required to pay a tax for having an employee. This is calculated on top of the gross salary of the employee, and must be paid to the Tax Authority monthly, together with the employee’s taxes. The total comprises both the gross salary and the employer’s taxes, representing the overall cost of having that employee in a particular month for your company.

In the table below, you can see the payroll taxes in Hungary for the year 2024 associated with the minimum wage, the guaranteed minimum salary, and an additional amount. If you want to check salary costs for other salaries, visit our salary calculator here. The indicated amounts are all in HUF.

 Minimum wageGuaranteed minimum salaryOther salary
Gross salary266,800326,000450,000
Cost borne by employee   
Income tax (15%)40,02048,90067,500
Social security contribution (18.5%)49,35860,31083,250
Net salary (to be paid out)177,422216,790299,250
Cost borne by employer   
13% Employer’s tax34,68442,38058,500
Total payroll cost301 484368,380508,500

No changes to payroll taxes in 2024

The rates for payroll taxes, including personal income tax, social security contribution, and social contribution tax, remain the same as in 2023. As a result, the payroll costs for your Hungarian company will only alter in relation to the raise you give your employees.

Changes to the SZÉP card

The SZÉP Card is one of the most popular fringe benefits in Hungary. It falls under the category of “non-salary compensation” and can be used for things like hot meals, accommodation when traveling,and various leisure activities such as museum visits or attending theaters. The SZÉP card allows employers to enhance their employees’ salaries with reduced taxes while providing support to specific sectors.

The most important change last year to the SZÉP card was the abolition of pockets from January 2023. The change was final, so no pockets in 2024 either.

A government decree issued in summer 2023 allowed employers to give their employees a one-off allowance of up to HUF 200,000 as fringe benefits between 1 August and 31 December 2023. Since this was a one-time measure, SZÉP Card limits are back to HUF 450,000 in 2024.

The same government decree also allowed employees to use the amount on their SZÉP Card to buy food (not only hot meals as before) until 31 December 2023. In 2024, SZÉP Card purchases are back to the initial three categories.

The Helpers Team at your service

Since the minimum wage increases ca. 15% and the guaranteed minimum salary increases ca. 10% in Hungary, you must make sure that the salaries you pay your employees are still above the required minimum, and adjust salaries and labor contracts as necessary. You might want to give a raise to other employees too to keep their salaries competitive.

The Helpers Team provides comprehensive assistance to small and mid-sized businesses in Hungary, with a special focus on working with owners or managers who are foreign nationals. Our services include not only company setup and residency applications, but also precise accountancy that lets you stay on top of your finances, complete with HR support to keep compliant with regulations.

If you need any help, we are here to assist you make your business a success in Hungary. Just fill in the form below to get in touch!

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The post Salaries and payroll taxes in 2024, Hungary appeared first on Helpers Finance.

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