The HUF 1.5 million gross wage has arrived in Hungary

The average gross salary in Hungary was almost HUF 647,000 last year, but there are significant differences beneath the surface. There are sectors where the average gross salary exceeds HUF 1 million, while in others it is less than HUF 500,000.

The latest data show that women continue to earn less and that leaving school early is not really worthwhile. But this is not the only thing we have learnt: there are still significant differences between gross earnings quintiles, with the highest earners taking home five times as much as the lowest earners.

The increase in the minimum wage and the guaranteed wage minimum has had a direct impact on the earnings of low-paid workers, who make up a significant proportion of the workforce in this segment.

As a result, the average gross earnings of the first quintile increased by 9.4% to HUF 276,000, which is significant but lower than the growth of the middle income groups.

The surge in growth rates in the third and fourth quintiles was largely driven by public wage settlements, especially for teachers. In these two income quintiles, gross earnings grew by 13.8% and 13.7% respectively.

In the fourth quarter of last year, the wages of education employees increased by more than 26%, significantly raising the average wage growth rate for the third and fourth quintiles.

As shown in the graph above, the gross salary of the top 20% of earners exceeded HUF 1.5 million. Their wages increased by 11% compared to the previous year.

It should be noted, of course, that fourth quarter pay data always include significant one-off payments, bonuses and end-of-year special payments. As these typically fall in December, they also boost the average pay for the last three months.

A quintile is a statistical indicator that divides data into five equal parts. The first quintile includes the lowest income group, while the fifth quintile represents the highest income group. This classification gives a good indication of the development of social inequalities, in particular the differences between the lower and upper income groups.

Cover image (for illustration purposes only): Getty Images