Romania’s minimum wage rises, surpasses Hungary in EU rankings

Due to the rapid increase in the Romanian minimum wage, Hungarian wages have fallen in the ranking of EU member states and in comparison to other countries in the region.

The minimal wage in Romania has risen by nearly 23% within a year, thanks to the second increase in the last six months, which took effect on July 1. The country’s minimum wage was raised by 12% in February and by 10% at the beginning of the year, as reported by 444.

Due to the rapid increase in the Romanian minimum wage, Hungarian wages have fallen in the ranking of EU member states and in comparison to other countries in the region. In the 2010s, Hungarian wages were on par with the minimum wages in the V4 countries. However, the forint has depreciated significantly since then, and other countries have also begun a notable catch-up process, yielding visible results.

According to data from the second half of the year, the Hungarian gross minimum wage was EUR 675.27, while the Romanian minimum wage was 10% higher at EUR 743.37. The Hungarian minimum wage was only 8% higher than the previous year, due to the weakening of the forint against the euro each year.

While gross pay is essential information, what truly matters for workers is their take-home pay, and the picture is not much better in this regard. Although the Romanian gross minimum wage is already 10% higher than the Hungarian one, the net difference is only 6%.

The difference between the gross and net wages is due to varying tax rates, as gross wages are taxed slightly more heavily in Romania (38%) than in Hungary (33.5%).

Only Bulgaria has a lower minimum wage in the EU ranking

Photo: Pixabay

There has been a significant change in the EU ranking in the second half of the year, with Romania now ahead of Latvia, where minimal wage earners work for EUR 700, following the latest increase. Hungary remains in second-to-last place, just ahead of Bulgaria.

It is worth noting that Bulgaria is also on the path to catching up, with a nearly 20% minimal wage increase this year following a 9% rise last year. At this rate, they will match the current Hungarian minimum wage in two years.

The highest minimum wage remains in Luxembourg at EUR 2,570 per month. In Ireland, minimum wage earners receive EUR 2,146, and in the Netherlands, EUR 2,134.

However, in Hungary, there have been relatively significant increases in recent years. In 2022, the minimum wage increased by nearly 20% to HUF 200,000 (EUR 502) gross, followed by a 16% increase at the beginning of last year and another 15% increase in December. However, these increases only managed to cover the inflation during this period.

The level of minimum wage increases in Hungary has not been sufficient to improve its position in the EU ranking or the region, nor to compete with the country’s eastern neighbours.

Read also:

• Hungarian workers earn less than 1/3rd of Austrian counterparts – Read here
• The lowest-paid jobs in Hungary: staggering differences in net wages across the country – Read here

Featured image: depositphotos.com