Wage Increases Take Effect in Hungary
Effective January 1, 2026, Hungary has implemented an 11% increase in the national minimum wage, raising it to HUF 322,800 gross per month. Concurrently, the guaranteed wage minimum, applicable to positions requiring at least a high school diploma or vocational qualification, has seen a 7% increase, reaching HUF 373,200 gross per month. These adjustments were announced by Prime Minister Viktor Orbán and are the result of an agreement reached between the government, employers' associations, and labor representatives.
Doubling of Family Tax Allowance to Boost Household Incomes
In a move designed to further support Hungarian families, the family tax allowance has been doubled, also effective January 1, 2026. This marks the second phase of a two-stage increase, with the first phase having been implemented in July 2025. The enhanced allowance provides significant monthly tax base reductions for parents:
- For one child, the monthly tax base reduction is HUF 133,340, potentially leaving up to HUF 20,000 with the family.
- For two children, the monthly tax base reduction is HUF 266,660, potentially leaving up to HUF 80,000 with the family.
- For three or more children, the monthly tax base reduction is HUF 440,000, potentially leaving up to HUF 198,000 with the family.
Government Rationale and Broader Economic Context
Prime Minister Orbán stated that the wage agreement will directly improve the financial situation of approximately 700,000 families, while the increased family allowances are expected to benefit around one million families. These measures are part of the government's broader economic strategy to combat inflation, support living standards, and boost consumer spending. The government also contributed to the agreement with an 11-point tax reduction program aimed at supporting small and medium-sized enterprises (SMEs).
The adjustments to the minimum wage and guaranteed wage minimum were necessary after a previously concluded three-year wage agreement had to be amended due to lower-than-expected economic growth. Public opinion surveys indicate strong support for these government initiatives across various social groups.
Additional Family Support Measures
Beyond the family tax allowance, Hungary has also expanded income tax exemptions for mothers. As of January 1, 2026, mothers under the age of 40 with two children, and all mothers under the age of 30, are eligible for lifetime income tax exemption. This builds upon existing exemptions for mothers raising four or more children. These comprehensive measures underscore the Hungarian government's focus on family policy and economic stability.
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