Minimum wage and its applications in various tax categories

The mandatory minimum amount of the basic wage (minimum wage) established for a full-time employee for full-time work from 1 January 2026, is HUF 322,800 per month, HUF 74,210 per week, HUF 14,850 per day, and HUF 1,856 per hour.

The guaranteed minimum wage established as the basic wage for employees in positions requiring at least secondary education or secondary vocational qualifications for full-time work from 1 January 2026, is HUF 373,200 per month, HUF 85,800 per week, HUF 17,160 per day, and HUF 2,145 per hour.

From a tax law perspective, each regulation must be individually examined to determine whether the mandatory minimum wage amount in effect on the first day of the year or the minimum wage in effect on the first day of the month should be used to determine tax and contribution obligations. With the modification of the minimum wage effective 1 January this year, these two dates coincide.

Personal income tax

According to the Personal Income Tax Act (PIT Act.) the minimum wage - even in the absence of a specific provision of the law - is the mandatory minimum monthly wage in effect on the first day of the year, except for the prevailing minimum wage referred to in the provisions of the Act concerning expense accounting.

The annual minimum wage is twelve times the mandatory minimum monthly wage in effect on the first day of the year.

Based on these provisions, the values to be determined using the minimum wage are as follows:

• When calculating the monthly amount of the personal allowance, one-third of the minimum wage in effect on 1 January 2026 (HUF 322,800), rounded to the nearest hundred forints, can be considered (HUF 107,600).
• The payer can give gifts of negligible value three times a year, each worth HUF 32,280 as a specified benefit.
• The payer can give a gift worth no more than 25% of the minimum wage (HUF 80,700) per person as a specified benefit during hospitality or leisure events organized for multiple individuals.
• For employees working remotely, the amount of reimbursement that can be accounted for as an expense without proof, related to remote work, can be up to HUF 32,280. If the employee does not work remotely for the entire month, the monthly amount can be proportionally accounted for based on the days spent working remotely.

For small-scale agricultural producers in 2026

• The annual amount of tax-free income for agricultural producers is HUF 1,936,800.
• The annual revenue threshold for flat-rate taxation is HUF 38,736,000.
• For flat-rate taxed agricultural producers, income of HUF 1,936,800 is tax-free.

For flat-rate taxed private entrepreneurs in 2026:

• The annual revenue threshold for flat-rate taxation is HUF 38,736,000, and for those exclusively engaged in retail activities, it is HUF 193,680,000.
• Income of HUF 1,936,800 determined as a flat rate is tax-free.

Social security contributions

According to Act on entitlements to social security benefits and on funding these services the minimum wage is the mandatory minimum wage in effect on the first day of the month. From January 2026, social security contributions are to be calculated based on the minimum wage of HUF 322,800 or the guaranteed minimum wage of HUF 373,200 for activities requiring vocational qualifications.

The contribution payment obligation of full-time private and partnership entrepreneurs is also tied to the minimum wage and the guaranteed minimum wage valid on the first day of the month in question.

The lower limit for contribution payment for employees in employment is 30% of the minimum wage in effect on the first day of the month. From 1 January 2026, social security contributions and social contribution tax must be paid based on HUF 96,840.

In the case of an agency contract - except for a long-term agency contract - the establishment of an insurance relationship depends on whether the income from this activity that constitutes the monthly contribution base reaches 30% of the minimum wage in effect on the first day of the month.

From 1 January  2026, a new type of insurance relationship is introduced: the long-term agency contract. A person working under an agency contract reported to the tax authority as a long-term agency contract is considered insured (unconditional insurance relationship). Therefore, it is not necessary to examine whether the individual’s monthly income under such a contract reaches 30% of the minimum wage or one-thirtieth of that amount calculated per calendar day.

For long-term agency contracts, the monthly contribution base must be at least 30% of the minimum wage (minimum contribution threshold), which is HUF 96,840.

Social contribution tax

According to the Social Contribution Tax Act, the minimum wage is the mandatory minimum monthly wage in effect on the first day of the year (HUF 322,800), except for the minimum wage mentioned in certain provisions of the Act concerning private and partnership entrepreneurs.

For private and partnership entrepreneurs, the contribution base is the guaranteed minimum wage for full-time work in effect on the first day of the month, if the main activity requires at least secondary education or vocational qualifications, otherwise the mandatory minimum monthly wage in effect on the first day of the month. From January 2026, the obligations must be determined based on the minimum wage of HUF 322,800 and the guaranteed minimum wage of HUF 373,200.

Regarding social contribution tax, tax allowances must also be calculated based on the minimum wage in effect on the first day of the year, as well as for determining the upper limit of social contribution tax payment (24 times the minimum wage), such as in the case of dividends.

Rehabilitation contribution

The rehabilitation contribution amount must be calculated by companies required to pay the contribution as follows: nine times the mandatory minimum monthly wage on the first day of the year per person per year. For 2026, this means HUF 322,800 × 9 = HUF 2,905,200 per person per year.

Small business tax

For companies choosing the small business tax (kiva), the law ties the amount of allowances that can be claimed for employees to the minimum wage. In this case, the minimum wage is defined by Act on the Fixed-Rate Tax of Low Tax-Bracket Enterprises and on Small Business Tax the minimum wage regulated by the Social Contribution Tax Act which means the minimum wage in effect on the first day of the month.

Corporate tax

The minimum wage valid on the first day of the tax year is the reference point for the tax base reduction applicable for dual vocational training as defined in Section 7 (1) point i) and for the employment of persons with changed working capacity as defined in point v) of the Corporate Tax Act.

Simplified employment

According to Act on Simplified Employment in the case of simplified employment, the minimum wage is at least 85% of the mandatory minimum wage, and for positions requiring vocational qualifications, at least 87% of the guaranteed minimum wage.

The amount of the public burden payable by the employer for each calendar day of employment is calculated per employee as a specified percentage of the minimum wage in effect on the first day of the month, rounded to the nearest hundred forints (as shown in the table below).