On 24 November 2016, the Government and the employer and employee organizations signed an agreement in which they agreed on the following:
- The minimum wage will increase by 15% (up to HUF 127 500) in 2017 and
- the guaranteed wage minimum by 25% in 2017 (up to and HUF 161 000).
- The minimum wage and the guaranteed wage minimum are predicted to be increased in 2018 by an additional 8% and 12%, respectively.
Moreover, social contribution tax of the employer will decrease by 5% in 2017 and expectedly by an additional 2% in 2018.
Moreover, the parties have agreed that if in the first nine months of 2017 the gross wage increase exceeds 11%, the Government will initiate that as of 1 January, 2018 the social security payments of the employer be decreased by an additional 0.5%. Altogether, social security payment obligation of the employer may decrease by 2.5% in 2018.
The Government is expected to submit the draft proposal to the Parliament in order to pass a law on this already on 24 November, 2016.
Corporate Income Tax: 9 percent, flat rate for enterprises
The government announced that a new flat rate system would be introduced instead of the existing progressive rates of 10 percent and 19 percent. The current progressive rates will be lowered to a flat rate of 9 percent from 2017.