The Hungarian Government has announced plans to reduce the personal income tax rate applied to minimum wage earnings and increase family-related benefits as part of its proposed 2027 budget. The measures are intended to support workers and families while contributing to the country’s broader economic objectives.
Hungarian Prime Minister Peter Magyar has outlined several proposals expected to be included in the 2027 budget. Under the announced plans, the personal income tax rate on minimum wage earnings would be reduced from 15% to 9%, which would increase net income for employees receiving minimum wage compensation. The proposal also includes a doubling of family allowances, providing additional financial support to eligible families. In addition, the 2027 budget is expected to present a roadmap outlining Hungary’s preparations for potential future euro adoption as part of the country’s longer-term economic strategy. The announcement was accompanied by renewed statements from Prime Minister Magyar regarding previous budget deficit reporting, reiterating concerns about the accuracy of figures published by the former administration.
From an employment tax perspective, the proposed reduction in income tax on minimum wage earnings could lower payroll withholding obligations and increase employees’ take-home pay. Employers may need to review payroll calculations and reporting processes should the measure be enacted. From a global mobility perspective, the proposed tax changes and increased family benefits could affect assignment cost projections, tax equalization calculations, and compensation arrangements for internationally mobile employees working in Hungary.
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Roland Szabo
Managing Director
Mónika Keztyűs
Senior Manager
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