Plan Your Labour Costs in Hungary

Proper planning is key to every successful business activity. While certain payroll schemes are similar across markets, labour costs and taxation are unique to each country, and Hungary’s rules have changed materially in recent years. This guide sets out the current taxation of payroll in Hungary, as of September 2026, so you can prepare a precise budget without surprises.

Salaries in Hungary

Salaries are usually paid on a monthly basis, and the employment contract must state the employee’s gross basic monthly salary. Hungary sets two statutory wage floors, both revised annually:

• the minimum wage (minimálbér), HUF 322,800 gross per month in 2026, for roles that do not require a specific qualification, and
• the guaranteed minimum wage (garantált bérminimum), HUF 373,200 gross per month in 2026, for roles requiring at least a secondary-level qualification or vocational training.

There are no general collective agreements covering entire sectors in Hungary, so beyond these statutory floors, pay is generally set individually between employer and employee.

Deductions From Gross Salary

The employer must withhold and pay the following from the employee’s gross salary:

1. 15% personal income tax (PIT). This can be reduced through the family tax allowance for employees with children, and employees under 25 are exempt from PIT on qualifying earnings up to a statutory limit.
2. 18.5% employee social security contribution, covering pension insurance (10%), health insurance (7%), and the labour market contribution (1.5%). Every employee is covered by state health insurance regardless of this contribution, though private healthcare providers are also available and not always covered by the public scheme. Pensioners already receiving a pension are automatically insured and do not pay this contribution again.

In a standard case with no allowances applied, the employee receives approximately 66.5% of the gross salary after these deductions. Employees often discuss net salary during recruitment, but the employment contract must state the gross monthly figure.

Employer’s Costs on Top of Gross Salary

The gross salary is not the employer’s total cost. On top of the gross salary, employers pay a single social contribution tax (szociális hozzájárulási adó, szocho) at 13%. This replaced the previous combination of a higher social contribution tax rate and a separate vocational training contribution, which was folded into szocho in 2022, simplifying the calculation.

This brings the standard total cost of employment to 113% of the gross salary for most employers, a lower ratio than in previous years following the 2022 reform.

Note 1: Companies taxed under the KIVA scheme for small and medium-sized enterprises do not pay szocho separately. Instead, KIVA is charged at 10% on a base that includes personnel costs, which can reduce total employment costs for businesses with high payroll relative to profit. From 2026, the revenue and balance sheet thresholds for entering and exiting KIVA have doubled, making the scheme available to a considerably larger group of companies than before.

Note 2: Employers with an average headcount above 25 must also pay a rehabilitation contribution if the share of employees with disabilities falls below the mandatory 5% quota. The contribution is calculated per missing employee, at nine times the annual minimum wage, which is HUF 2,905,200 per person per year in 2026. It is generally paid in quarterly advances with an annual reconciliation.

A Simple Cost Illustration

For an employee earning the 2026 minimum wage of HUF 322,800 gross per month, standard employer social contribution tax alone brings the total monthly cost to approximately HUF 364,764 (322,800 × 1.13), before accounting for any benefits, bonuses, or the rehabilitation contribution where applicable. For roles paid at the guaranteed minimum wage of HUF 373,200, the equivalent total employer cost is approximately HUF 421,716. These figures are a useful starting point for budgeting, though actual costs will vary with benefits, overtime, and company-specific arrangements.

How Leinonen Can Help

Hungarian payroll taxation has genuinely changed in recent years, and figures such as the minimum wage, social contribution tax rate, and KIVA thresholds are revised regularly, so a budget based on older figures can understate real costs. Leinonen can assist you with all your payroll management needs in Hungary, from monthly payroll processing to labour cost planning for new hires. For further details, please contact us.