Minimum Wage 2025: What Taxes and Payments Might Be Affected by the Change?

The decree on the minimum wage and guaranteed minimum wage effective from January 1, 2025, was announced in mid-December. Beyond the increased public charges for employers paying minimum wage or guaranteed wage minimum, the change impacts the tax system in several ways, as many public benefits or thresholds are tied to the minimum wage. This article summarizes these cases.

From January 2025, the monthly minimum wage for full-time employees will be HUF 290,800, and the guaranteed wage minimum for positions requiring at least a secondary education or vocational qualification will increase to HUF 348,800.

It is worth noting that in the social transfers system, regarding benefits (e.g., childcare allowance, sick pay) and in the tax system, the reference to the minimum wage is not uniform. This means that it is necessary to consider which minimum wage to take into account and whether the guaranteed wage minimum is included in the concept. Typically, the minimum wage in effect on the first day of the month or the year is used, but sometimes the current minimum wage or the minimum wage in effect on the day of eligibility or payment is applied. In previous years, special attention had to be paid when the applicable minimum wage/guaranteed minimum wage was not effective from 1st of January. However, this year, the decree was announced in 2024, and the obligation to apply the increased minimum wage/guaranteed wage minimum was not brought forward.

Below, we have reviewed (sometimes by income category or depending on the taxation method used) the significant threshold changes implied by the minimum wage/guaranteed wage minimum increase.

In this section we collected the most significant changes affecting many people:

  • Benefits for sports events, cultural services, and (from next year) zoo tickets and passes (separately by category) can be provided tax-free up to the amount of the minimum wage, i.e., HUF 290,800 in 2025.
  • The threshold for small-value gifts that can be provided up to three times a year has also changed. If the individual value of the gift (product / service) does not exceed 10% of the minimum wage, i.e., HUF 29,080 in 2025, it can be taxable as a specific benefit.
  • If gifts are provided during an event of mainly hospitality and leisure programs, organized for multiple employees or business partners, and the value of the gifts does not exceed 25% of the minimum wage, i.e., HUF 72,700 in 2025, this benefit can also be considered a specific benefit.
  • Personal allowance (based on a certificate or decision regarding disability) can be claimed for one-third of the minimum wage per month, rounded to the nearest hundred forints. This means a tax base allowance of HUF 96,900 per month next year, resulting in a personal income tax saving of HUF 14,535.

The change in the minimum wage/guaranteed minimum wage significantly impacts the tax and social security contribution (hereinafter: “SSC”) burdens of employees or individuals engaged by a mandate agreement, detailed below:

Many are affected by the fact that those in other remuneration-based legal relationships (e.g., mandate relationships) are only insured (i.e., required to pay SSC) if their income exceeds 30% of the minimum wage or its thirtieth part on a daily basis. Thus, in the case of such activities, this monthly amount increases to HUF 87,240.

The maximum amount of wage advances that can be disbursed without applying the rules on income from interest benefits has also changed. If the wage advance is repaid within six months and does not exceed five times the minimum wage on the day of disbursement, i.e., HUF 1,454,000 in 2025, no income from interest benefits needs to be established.

The maximum amount of social contribution tax (hereinafter: SST) allowances that can be claimed is also often tied to the minimum wage or twice the minimum wage. Below is a list of the maximum monthly allowances that can be claimed in 2025 for employment:

  • The maximum tax allowance for employees in positions not requiring qualifications and in agricultural jobs: HUF 18,902;
  • The maximum tax allowance for new entrants to the labor market, depending on the duration of employment: HUF 37,804, then HUF 18,902;
  • The maximum tax allowance for women with three or more children entering the labor market, depending on the duration of employment: HUF 37,804, then HUF 18,902;
  • The maximum tax allowance for persons with reduced work capacity: HUF 75,608;
  • The maximum tax allowance for employing researchers: HUF 75,608.

Several government announcements and articles have recently been published regarding the requirement for employers to pay SST in 2025 based on the 2024 minimum wage for employees earning up to HUF 290,800 (i.e., the maximum 2025 minimum wage) during a specified period. However, this has not yet been reflected in the legal regulations.

Individuals opting for simplified contribution to public charges (EKHO) taxation will also be impacted of the minimum wage increase. The maximum limit of income taxable under EKHO, HUF 60 million, is tied to whether personal income tax and SSC are paid according to the general rules on at least the annual minimum wage (HUF 3,489,600 in 2025) during the tax year. If a smaller amount is paid, the EKHO limit is proportionally reduced. Furthermore, in the case of choosing this tax type, the employer is obliged to deduct personal income tax and SSC according to the general rules up to the amount of the minimum wage, i.e., HUF 290,800, unless this condition is already met for income from other source.

Certain capital incomes (e.g., income withdrawn from a business, dividends, non-qualified capital gains, income from securities lending) are subject to SST up to a specified amount. Since the upper limit of this obligation is tied to twenty-four times the minimum wage, this amount also changes. Thus, in 2025, the maximum SST payable on the above listed capital incomes will be HUF 907,296.

The exempted amount for simplified employment and the payable tax are also tied to the minimum wage. In 2025, the daily flat-rate tax will be HUF 1,500 for agricultural and tourism seasonal work, HUF 2,900 for occasional work, and HUF 8,700 for film industry extras. The exempted amount, below which no personal income tax is payable, also changes. This will be HUF 20,852 per day for employees subject to the guaranteed wage minimum and HUF 17,394 per day for employees subject to the minimum wage.

The increase in the minimum wage/guaranteed wage minimum brings significant changes year by year for individual entrepreneurs opting for flat-rate taxation:

  • The absolute threshold for choosing flat-rate taxation will also increase. For retail and (from 2025) postal intermediary and other activities based on the mandate of the universal postal service provider, the revenue threshold will be fifty times the minimum wage, i.e., HUF 174,400,000 in 2025. For all other activities, the threshold will be ten times the minimum wage, i.e., HUF 34,888,000 in 2025.
  • Income up to half of the annual minimum wage is exempt from personal income tax, i.e., HUF 1,744,800 next year. This means tax-exempt income of HUF 2,908,000 for entrepreneurs applying a 40% cost allowance, HUF 8,724,000 for those applying 80%, and HUF 17,448,000 for those entitled to apply a 90% cost ratio.
  • Individual entrepreneurs are required to pay the minimum SSC and SST monthly, tied to the minimum wage /guaranteed wage minimum. The SSC obligation base is at least 100% of the minimum wage / guaranteed wage minimum in effect at the beginning of the month, and the SST obligation base is 112.5% (one-thirtieth for daily proportionality). Thus, for activities not requiring qualifications (without applying allowances), the minimum monthly SSC payable is HUF 53,798, and the SST is HUF 42,530. For guaranteed wage minimum application, the minimum monthly SSC obligation is HUF 64,528, and the SST obligation is HUF 51,012. Although the obligation must be calculated monthly, the payment obligation is due on a quarterly basis.

The contribution base for insured corporate entrepreneurs (e.g., those who are not employed but are managing directors and members of a company, or personally contributing members without a legal relationship) is at least the minimum wage per month, i.e., HUF 290,800 next year, or HUF 348,800 if the guaranteed wage minimum is mandatory. The minimum amount of the SST base is also tied to the monthly minimum wage, 112.5% of it, i.e., at least HUF 327,150, or HUF 392,400 if the guaranteed wage minimum is mandatory.

Among the SST allowances, the maximum tax allowance for the disabled member will increase to HUF 75,608, which may also affect owners.

Authors: Csikós Veronika (senior manager) & Bíborka Nagy (tax advisor)