Gross and net wages both grew by 12.8 percent year-on-year in Hungary, thanks to the increase of the minimum wage (for unskilled workers) and guaranteed minimum wage (for skilled workers), tax reductions, rising labour demand in the private sector and various public sector career models, Minister for National Economy Mihály Varga said, commenting on the latest wage data for the month of October 2017.

The Government-initiated six-year wage deal may in coming year narrow or even close the wage gap with other countries in the region, while the reduction of payroll taxes and the rate of corporate income tax will ease the financial burden of enterprises, he added.

Thanks to family tax allowances, in comparison to 2010 the largest growth, more than 77 percent, was registered in the net wage of families with three or more children, the Minister said.  The impact of incentives was also visible on the income of families with two children, as the net wage in their case grew by 13.7 percent year-on-year, above the country’s average.

In the month of October, wages in real terms were up by 10.4 percent, while in the period January-October 2017 they increased by 10.2 percent year-on-year. Thus, the positive real wage growth trend has been unbroken for 58 months, and October was the seventh month in a row in 2017 when wages in real and year-on-year terms posted double-digit growth. In the region, Hungary comes after Poland as the country with the second largest wage growth. As Mihály Varga stressed, it was a positive development that the average wage in the healthcare sector was up by 16.9 percent in the observed period, and this was the largest increase among sectors.

Among counties, Szabolcs-Szatmár-Bereg, Békés and Nógrád saw the largest growth. The number of people employed in public work programmes has fallen as the number of private sector jobs has risen, and that trend has improved job as well as wage statistics, he noted.

As the minimum wage and the guaranteed minimum wage are to rise by another 8 percent and 12 percent, respectively, and the rate of social contribution is also set to be reduced by 2.5 percentage points as of 1 January 2018, gross wages are expected to gain some 8-9 percent next year, the Minister stated.

(Ministry for National Economy)