On 19 October 2026, Prime Minister Péter Magyar told Parliament, while presenting the basis of the 2027 budget, that from 1 January 2027 personal income tax on the minimum wage will fall to 9% from today’s 15%, and that everyone earning under HUF 680,000 a month will pay less tax.
This is an announcement, not yet law. The government will submit the budget to Parliament at the end of October, and the exact rules will be set out in the bill. Below: what was announced, what it means for your take-home pay, and what is still unknown. If you work in Hungary and your salary is taxed here, this applies to you just as it does to Hungarian employees.
In short: Minimum-wage earners would take home about HUF 20,000 more a month, or HUF 240,000 a year. Everyone earning under HUF 680,000 a month would pay less tax, and nothing would change above that. The government says about 2.5 million employees would benefit.
What was announced?
- Personal income tax on the minimum wage falls from 15% to 9% from 1 January 2027.
- Everyone earning under HUF 680,000 a month pays less tax.
- According to the government, about 2.5 million employees benefit, and the cut leaves HUF 250 billion a year with workers.
- A minimum-wage earner would take home about HUF 20,000 more a month, or about HUF 240,000 a year, even without a pay rise.
How much more would you take home?
HUF 20,000 is roughly 6% of the minimum wage, the difference between a 15% and a 9% tax. Using the 2026 minimum wage (HUF 322,800 gross):
| Minimum wage, HUF 322,800 gross | Personal income tax per month |
|---|---|
| Today, at 15% | HUF 48,420 |
| Under the plan, at 9% | HUF 29,052 |
| Difference: your net pay rises by | HUF 19,368 |
The 2027 minimum wage has not been set yet. If it rises, the saving will be slightly larger, which is why the government rounded it to HUF 20,000.
Tax would also fall between the minimum wage and HUF 680,000, while above HUF 680,000 today’s 15% would stay. This implies that the relief shrinks as income rises and disappears at HUF 680,000. The governing Tisza party’s election programme also described it this way, as a tax credit that phases out. The exact formula has not been published, so it is not yet possible to work out the saving on, say, a HUF 450,000 salary.
What is still unknown
- How it works: whether it will be a tax credit or a separate tax band, and how fast the relief phases out between the minimum wage and HUF 680,000.
- Gross or net: the press reads HUF 680,000 as gross monthly income, but this has not been officially confirmed.
- Who it covers: the announcement was about employees. Whether it also covers sole proprietors’ income (vállalkozói kivét), flat-rate (átalányadó) income or fees under service contracts will be clear from the bill.
- The 2027 minimum wage: employers and unions are still negotiating it, and the earlier agreement on a 14% rise has been reopened.
What it means if you run a business
KATA taxpayers are not directly affected, because the fixed KATA tax replaces personal income tax. We have covered the planned 2027 KATA changes in a separate post.
For flat-rate (átalányadó) taxpayers, income above the tax-free amount is taxed at 15% today. Whether the cut will apply to them is still open. Separately, it is already law that the general cost ratio rises from 45% to 50% in 2027.
If you have employees, the change will show up in payroll from January, and your staff’s net pay may rise. The announcement said nothing about employer costs (social contribution tax and other contributions).
Changes for mothers and families
- The income tax exemption stays for mothers under 30, mothers of two children under 40 and mothers of three or more children, but a cap of HUF 1 million gross a month is introduced: income above it is taxed.
- Under current law, mothers of two children under 50 would also become exempt from 1 January 2027. According to the announcement, this step will not happen: the exemption will not be extended to mothers of two over 40.
- The exemption for young people up to the average wage stays, and the family tax allowance for children is unchanged.
- From 2027, family allowance (családi pótlék) doubles: HUF 12,200 more a month for one child, HUF 26,600 more for two.
What happens next
This week the government sends the budget to the Fiscal Council, and at the end of October it goes to Parliament. The tax changes also require amending the personal income tax act, which is where the details will be set out. Until then, today’s rules apply.
A note on this article
This article is based on the Prime Minister’s announcement in Parliament on 19 October 2026; no bill has been published yet. In any specific case, the law as finally adopted and NAV’s guidance prevail. We will update this post once the bill is out.
Want to know what the change means for your salary or your employees’ pay? We are happy to work it out.
