Pay planning for 2027: what should employers focus on now?

Minimum wage and guaranteed wage minimum: what we know and what is uncertain

The 2027 minimum wage is not yet known, and the previously communicated HUF 374,600 can no longer be taken as a firm starting point. The 2024 three-year agreement set a 14% increase for 2027, but this was based on the HUF 328,600 planned for 2026. The actual 2026 minimum wage, however, rose by only 11%, to HUF 322,800, at the start of the year.

The positions are still far apart:

• Government: according to the minister for social and family affairs, the agreement must be reviewed in light of the changed economic data.
• Trade unions: they do not consider even 14% realistic, but point out that meeting the “50% of the average wage” target could require as much as 18%.
• Employers: the large employers’ associations rule out a double-digit increase; one of them considers around 6% realistic.

Another source of uncertainty is that changes may also come on the net side. The economy minister has indicated that personal income tax on the minimum wage would be cut from 15% to 9%. If this happens, employees’ net pay could rise noticeably even with a moderate gross increase.

Pay compression: the quiet problem

The real cost of a minimum wage increase shows up not among minimum wage earners but in the bands above them. In 2026 the gap between the minimum wage and the guaranteed wage minimum is only about HUF 50,000. If, as previously planned, the minimum wage rises faster than the guaranteed minimum in 2027, this gap will narrow further.

This has practical consequences:

• The pay of semi-skilled and skilled workers moves close together, which breeds dissatisfaction among skilled workers.
• A colleague who joined a few years ago and is already experienced may be caught up by a new hire.
• If the company raises only the mandatory minimum, the bottom of the pay scale gets “bunched up”, and turnover rises in the middle bands.

According to surveys, the guaranteed wage minimum affects nearly 800,000 employees, almost 20% of the workforce. Where there are many semi-skilled and skilled workers, this is the largest cost item.

A forward-looking step is to prepare a simple report on how many employees earn between the minimum wage and the guaranteed wage minimum +15%. This is the group that every scenario affects directly or indirectly.

Inflation calculation: why is the gap closing?

inflation in September 2026 (KSH)

1.6%

expected inflation for 2026 as a whole

1.8%

expected inflation for 2027

2.6%

According to the Hungarian Central Statistical Office (KSH), inflation was 1.6% in September 2026, an exceptionally low level. Analysts expect inflation of around 1.8% for 2026 as a whole and 2.6% for 2027. Many employers are therefore planning only inflation-matching increases of 3–4% in the higher bands, while the minimum wage could rise by as much as 6–14%. Let’s look at a simple example.

The calculation reveals the following problems to address:

• The minimum wage earner gets more in forints (+HUF 32,280) than the professional earning HUF 700,000 (+HUF 24,500). Everyone can see this on their payslips, and it causes the most tension.
• The minimum wage earner’s real wage rises by 7.2%, the skilled worker’s and the professional’s by barely 0.9%.
• If the personal income tax on the minimum wage is also cut, net differences shrink even faster than gross ones.

How can dissatisfaction among higher earners be managed?

• A differentiated pay rise framework: set a minimum pay differential for each band (e.g. a skilled worker’s pay should be at least 1.35 times the minimum wage), and align increases in the middle bands with it.
• Calculate in forints too: expect the most complaints where an inflation-matching increase is smaller in forints than the minimum wage earners’ rise. For these groups it is worth at least matching the forint amount.
• Communicate real wage growth: with 2.6% inflation, even a 3.5% increase is a genuine rise in purchasing power. But it has to be explained, because employees will compare themselves with their colleagues’ increases, not with inflation.
• Non-wage tools: a performance bonus, a cafeteria allowance, training, a career path or flexible working can help where there is not enough budget for base pay.

Employer charges, related limits, benefits

The minimum wage is not only a wage but also the reference point for many rules, so an increase shows up at several points in payroll. When planning, it is worth going through these on a list:

• Employer charges: social contribution tax grows in proportion to the wage bill. Budget for the total cost of employment, not just gross wages.
• Amounts tied to the minimum wage: for example the daily maximum of sick pay, the minimum contribution base for entrepreneurs or the normally taxed part of EKHO (the simplified public burden contribution). These are parameters in the payroll system and must be updated on 1 January.
• Cafeteria and fringe benefits: if the allowance is fixed, its ratio to pay falls. It is worth deciding whether to increase it or to put the money into base pay instead.

The tax cut does not directly change the employer’s costs, but it does change pay communication. If net pay rises, employees will see something different on their January payslips from what the gross increase would lead them to expect. It is worth explaining this in advance.

Pay transparency: build it into planning now

The EU Pay Transparency Directive should have been transposed by 7 June 2026, but there is no Hungarian law yet. That does not make companies safe: courts are already obliged to interpret the law in force in line with the directive’s purpose.

The 2027 pay rise is a good opportunity to put things in order. If increases are allocated on objective, documented criteria (job grading, performance, market data), they can be defended later. Increases of the “whoever asked, got one” kind, however, widen exactly the unjustified differences the directive will scrutinise.

Summary

In 2027 pay planning, what matters now is not the exact figure but being prepared. Those who prepare scenarios in October, assess the affected group and put the pay scale in order can act within days of the final decision. Those who wait will face payroll, budget and communication problems all at once in January.