Hungary is increasing its minimum wage by 15% in 2017 and 8% in 2018. The minimum wage for skilled workers will also increase by 25% in 2017 and 12% in 2018.
Additionally, the payroll tax will decrease in 2017 by 5% and by 2% in 2018.
Hungary is increasing wages and decreasing taxes in an effort to attract more workers. Many Hungarians have left to work in nearby countries, leaving Hungary with a labor shortage. Currently, unemployment is 4.9% and the annualized wage growth is 6.7%. Should the wage growth rate exceed 11% over the next 9 months, an additional 0.5% payroll tax decrease will take affect.
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