The Hungarian labor market is constantly evolving, with a direct impact on salaries and the cost of living. As a dynamic capital, Budapest attracts many local and foreign workers. Let’s take a closer look at wages and living standards in Hungary.
Income and minimum wage trends in Hungary
Hungary has enjoyed significant economic growth in recent years, with a rate of 4.6% in 2019. This growth has been accompanied by a gradual increase in the minimum wage, reflecting the government’s desire to improve workers’ purchasing power.
Here is the evolution of the gross minimum wage in Hungary:
- 2020: 161,000 forints (487 euros)
- 2024: 266,800 forints (697 euros)
This represents an increase of over 65% in four years. Successive increases have been particularly marked:
- 2018 : +15%
- 2019 : +8%
- 2020 : +8%
It’s worth noting the existence of a higher, qualified minimum wage for employees who have completed secondary education. In 2020, it will amount to 210,600 HUF.
Despite these increases, the Hungarian minimum wage remains one of the lowest in Central Europe. The net minimum wage represents around two-thirds of the gross wage, due to social security contributions and income tax.
Wage disparities and sectors of activity
Earnings in Hungary vary considerably according to sector and level of qualification. The average gross salary in 2020 was around 365,000 HUF (1105 euros), well above the minimum wage.
The main sectors employing minimum wage earners are :
- Manufacturing
- agriculture
- Construction
- Food processing
- Textiles
- Hotel & catering
On the other hand, some professions have particularly low salaries by European standards. This is particularly true of teachers:
| Category | Gross annual salary |
|---|---|
| Beginning secondary school teacher | 7,388 euros |
| Average effective teacher salary | 12,852 PPS |
These figures place Hungary among the European countries with the lowest salaries in education.
Cost of living and purchasing power in Budapest
Budapest, Hungary’s dynamic capital, attracts many local workers and expatriates. The cost of living is relatively low compared to other European capitals, but has been rising in recent years.
Several factors influence purchasing power in Budapest:
- the cost of housing, which is rising steadily
- Prices of food and everyday consumer goods
- Public transport, relatively affordable
- Leisure and culture, generally less expensive than in Western Europe
It’s worth noting that hourly labor costs in Hungary were 12.8 euros in 2023, compared with 42.2 euros in France. This significant difference partly explains Hungary’s attractiveness to foreign investors.
The Hungarian government has implemented a policy aimed at increasing the purchasing power of its citizens. On the other hand, the effects of this policy vary according to socio-professional category and sector of activity.
Employment prospects and specific features of the Hungarian labor market
The Hungarian labor market offers a number of interesting features for both local and foreign workers:
- A relatively low unemployment rate (3.4% in 2019)
- Sustained economic growth
- Opportunities in developing sectors such as IT and services
For foreign workers, it’s worth noting that English is the language of business in Hungary. Hungarian, a complex language, is not generally required in international companies.
Social security contributions in 2022 will break down as follows:
- 13% for the employer
- 18.5% for the employee
These relatively high rates partly explain the gap between gross and net wages received by Hungarian workers.
All in all, the Hungarian labor market offers interesting opportunities, particularly in Budapest, despite salaries that are generally below the European average. Economic growth and government policies offer the prospect of improved purchasing power in the medium term.