Net earnings increased by 51 percent over the past six years in Hungary, and earnings in real terms also grew by some 32 percent. Real earnings have been rising steadily for 65 months in Hungary thanks to public sector wage hikes, rising labour demand in the private sector and the six-year wage agreement.

Wage growth will also be underpinned by the 2019 Budget due to the fact that the rate of social contribution tax is set to be reduced from 19.5 percent to 17.5 percent and this will leave more room for enterprises to raise wages. Public sector wage hikes are also to be continued: wages in the law enforcement, defence and healthcare sectors will rise further as of 2019; wage hikes are planned for officials at local governments and in the central public administration. Sufficient funds have been earmarked to finance formerly initiated wage hikes.

In the period January-May 2018, gross and wages averaged HUF 323 000 and HUF 215 000, respectively. Net wages including family tax allowances averaged HUF 226 000 in the month of May.  This corresponds to gross and net earnings growth of 12.1 percent each, while real earnings were up by 9.7 percent year-on-year. The government continues to aim for full employment and help employees increasingly benefit from the fruits of economic growth. Rising wages and the rising number of people in employment are also contributing to the expansion of the Hungarian economy while they also help maintain fiscal balance.

(Ministry of Finance)