Data

Taxation of Labour in Hungary is Near 50% in 2016

When you take home 516 euros a month, but your employer paid 998 – and the difference went to the state – that’s a nearly 50% tax wedge. The income tax is only 15% of it, so be informed before you use Hungary as a poster child of income taxation. 

And that’s the average salary. The minimum wage is just 235 euros in take-home pay. (And no, that’s not enough to pay the rent.)

Flat tax is fine – it is the least distorting to incentives. High taxes are wrong – and not well spent.

Taxes on labour in 2016

AVERAGE WAGE

Gross average wage  777 EUR
Average wage labour costs – to employer 998 EUR
Employee pays (33.5%)
Net average wage – TAKE HOME PAY 516 EUR
Personal income tax (15%) 116 EUR
Pension contribution (10%) 78 EUR
Social security contribution (7%) 54 EUR
Labour market contribution (1.5%) 11.6 EUR
Employer pays on top of your wage (28.5%)
Employer “social contribution tax” (27%) 210 EUR
Labour training contribution (1.5%) 11.6 EUR

MINIMUM WAGE

Gross minimum wage  353 EUR
Net minimum wage – TAKE HOME PAY 235 EUR
Non-taxable income N/A (flat tax)
Minimum wage labour costs – to employer 454 EUR
Employee pays (33.5%)
Personal income tax (15%) 53 EUR
Pension contribution (10%) 35 EUR
Social security contribution (7%) 24 EUR
Labour market contribution (1.5%) 5 EUR
Employer pays on top of your wage (28.5%)
Employer “social contribution tax” (27%) 95 EUR
Labour training contribution (1.5%) 5 EUR

Follow us on Facebook , Twitter @_MwBp , or subscribe to newsletter

Advertisements

13 thoughts on “Taxation of Labour in Hungary is Near 50% in 2016

  1. Pingback: This Is How Fidesz Media Looks Like | Meanwhile in Budapest

  2. Pingback: Marrying for Love as a Road to Working Poverty | Meanwhile in Budapest

  3. Pingback: 8 Ways Countries Pimp Out Their Citizens | Meanwhile in Budapest

  4. Pingback: Living in Hungary as an Expat: Wages and Doing Business | Meanwhile in Budapest

  5. Pingback: New Trend: Hungarians Buying Austrian Ski Resorts | Meanwhile in Budapest

  6. Pingback: When Factories Move Back From China | Meanwhile in Budapest

  7. Pingback: Young Hungarians Are Still Too Liberal For The Government | Meanwhile in Budapest

  8. Pingback: How To Be A Useful Idiot – Part 2. | Meanwhile in Budapest

  9. Pingback: Delightful Civil Disobedience | Meanwhile in Budapest

  10. Pingback: Cutting Taxes Before Elections | Meanwhile in Budapest

  11. Pingback: The Logical Endgame Of Free Healthcare | Meanwhile in Budapest

  12. Pingback: Take Care of Your Own Pensions Because Your Government Sure Won’t | Meanwhile in Budapest

  13. Pingback: 7 Reasons I Am Leaving Hungary | Meanwhile in Budapest

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s