Hungary's wage talks aim to end large raises, consider tax cuts to offset
Negotiations on next year's minimum wage and guaranteed minimum salary began on September 25, with officials looking to halt steep pay hikes and possibly offset them with income-tax reductions.
On September 25, wage negotiations involving employers, labour unions and the Hungarian government commenced to determine the 2027 figures for the minimum wage and the guaranteed minimum salary, set at HUF 323,000 and HUF 373,000 gross respectively. The challenge lies in the broader impact of low-wage increases on the national average wage, which is now HUF 745,000. The Magyar Nemzeti Bank's latest inflation report warned that the 7% wage growth rate exceeds the pace of productivity gains and is unsustainable.
Historically, the ruling party has linked high wage increases to anticipated economic rebounds that have not materialised. Consequently, policymakers are exploring alternatives such as reducing personal income tax to compensate for smaller wage hikes. The outcome will shape both household incomes and the broader economic balance in Hungary.
Why it matters
The decision will affect millions of workers' earnings and Hungary's economic stability.
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