The 2027 budget: cafeteria rules stay put, the minimum wage will set the limits

What did the budget bring?

Based on the government’s summary and the announcement in Parliament, the most important items for employees are:

• 9% personal income tax on the minimum wage: from 1 January 2027 the personal income tax on the minimum wage falls from 15% to 9%, and everyone earning up to HUF 680,000 gross a month gets a tiered tax cut. According to the government this affects about 2.5 million employees and leaves HUF 250 billion a year with workers.
• Family support: the family allowance is doubled, and mothers’ income tax exemption applies up to a monthly gross income of HUF 1 million.
• SZÉP Card for pensioners: the first stage starts. Pensioners with an income below HUF 500,000 are the first to receive support on a SZÉP Card, with HUF 90 billion set aside for it.

The draft now goes to the Fiscal Council and will be submitted to Parliament at the end of October; the details of the tax laws will follow in the subsequent tax package.

What isn’t changing: the cafeteria foundations

annual SZÉP Card allowance

HUF 450,000

charges on fringe benefits

28%

charges on certain specified benefits

33.04%

The announced package does not touch employer cafeteria: nothing was said about the range of benefit items, the tax-free or preferential limits, or the charges on benefits. Planning for 2027 can therefore keep building on the 2026 rules, as we also wrote in our Cafeteria 2027 article.

The pensioner SZÉP Card is not an employer benefit either: the state pays the support to pensioners, and the allowance and taxation of the employee SZÉP Card are unaffected.

Minimum wage 2027: a smaller rise than 14% is expected

for 2027 under the 2024 agreement

14%

what two-thirds of firms would accept (VOSZ)

max. 6%

the floor set by the Workers’ Councils

min. 10%

The three-year wage agreement concluded in 2024 set a 14% minimum wage increase for 2027, which would have meant HUF 374,600 gross. But it was built on the higher minimum wage planned for 2026, and economic growth has also fallen well short of plan, so according to the government the agreement must be renegotiated.

• Employers: according to a VOSZ survey of 600 companies, 20% of businesses would not raise the minimum wage at all, 22% would accept at most 3%, and two-thirds in total would accept no more than 6%.
• Trade unions: the National Federation of Workers’ Councils is ready to give ground on the 14% if the government introduces the tax relief promised to lower earners, but even then considers a gross increase of at least 10% necessary.
• Negotiations: the Permanent Consultation Forum of the Business Sector and the Government (VKF) met on 20 October for the first round in which concrete figures are on the table. No decision had been reached by the time of publication.

Why might employees accept a smaller rise?

Thanks to the 9% income tax, minimum wage earners’ net pay can rise noticeably even with a moderate gross increase. By our simplified calculation, a 6% gross rise with the 9% tax gives a bigger net increase than the originally planned 14% would with today’s 15% tax.

The calculation assumes 18.5% employee contributions and no allowances, applying the 9% rate to the whole minimum wage; the exact rules of the tiered income tax are not yet known.

For the employer, however, it is the gross that counts. With the 13% social contribution tax, the monthly cost of a minimum wage employee is about HUF 386,700 with a 6% rise and about HUF 415,800 with 14% — roughly HUF 29,000 less per head per month. That is why a smaller gross rise can become a realistic compromise: the employee’s net pay grows, while the employer’s payroll cost grows less.

What does this mean for cafeteria limits?

Cafeteria feels the minimum wage directly where the statutory limit is tied to it. The most important ones:

• Tickets for cultural services, sporting events and zoos: each tax-free separately, up to the amount of the minimum wage per year.
• Low-value gifts: up to 10% of the minimum wage per occasion, at most three times a year, as a certain specified benefit.

A smaller minimum wage rise therefore means smaller limits for these items than the 14% path would have given:

With a 6% rise, the annual tax-free limit for each ticket type would be about HUF 25,800 and the annual gift limit about HUF 7,700 below the 14% path. The HUF 450,000 SZÉP Card allowance is a fixed amount, independent of the minimum wage.