At the meeting of the Permanent Consultation Forum of the Competitive Sector and the Government, a two-year agreement was reached pursuant to which the minimum wage and the guaranteed wage minimum for qualified workers will increase by 8 per cent in 2019 and by another 8 per cent in 2020. The forum determined the rate of the recommended wage increase at 8 per cent for both years, Finance Minister Mihály Varga announced.
The Finance Minister said that, as a result, the minimum wage will increase to HUF 149,000, while the guaranteed wage minimum to HUF 195,000 from 1 January 2019, and in consequence the amounts of both wage categories will increase to more than double the amounts recorded in 2010. By 2020 the amount of the former will rise to HUF 161,000, while that of the latter to HUF 210,600. The agreement was signed by all parties concerned, including the government, all employer interest representations, and worker organisations, with the exception of the National Confederation of Hungarian Trade Unions.
The minister said with this significant rise in minimum wages – the same as in the past few years – also next year we will be able to observe a major pay increase in Hungary which will further improve the financial situation of Hungarian families.
He pointed out that the government also supports the establishment of families and the raising of children with family tax allowances which more than one million families are eligible for now. Next year the tax allowance of families with two children will increase by five thousand forints again, and so they will be able to save twice as much as in 2015, forty thousand forints monthly.
He said pursuant to the six-year wage agreement signed in November 2016, from July 2019 the social contribution tax will decrease by another two percentage points, from 19.5 per cent to 17.5 per cent, which will further reduce the tax burdens of businesses. The reduction of employer taxes will allow businesses to provide as high pay rises for their employees as possible.
Mr Varga stressed that, parallel with pay rises, employment is also continuously rising: the number of those in employment is now above 4.5 million, and so there is scope for further rises in earnings. Along with minimum wages, wages falling into higher pay categories have also continuously increased in recent years. As a result, by 2017, at the level of the national economy, the real value of net earnings, the effects of family allowances included, increased by 36 per cent on average compared with 2010.
(Ministry of Finance)
