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Salary, Income

Salary is the amount of money paid to the employee for regular services.


Income is anything and everything we use to get by. Most of this comes from our salary, but any other of income such as family support, or rent you get for renting out your apartment too.


A salary, or wage, is a fixed compensation periodically paid to an employee for regular work or services. In Hungary most people get their salary monthly, but for example in the United States it often happens that people get their salaries every two weeks. Sometimes it can also happen that people get paid at the end of the day, based on their completed work, especially when doing odd jobs.

Commission, dividends

In different fields salaries have different types. One of these is the commission, which is given to someone when they sign a contract that leads to profit. For example, if somebody organizes a newspaper ad for a company, for which the company has to pay for, they get commission for signing the deal. This is usually agreed upon previously.

Dividends are similar, but a bit more complicated. In short, if a company has more than one owner the board of directors can decide to distribute the earnings (or at least a portion) among the owners of the company.


Pay: hourly wage, fixed salary, performance-related pay

As previously mentioned, salaries can be paid out monthly, weekly or daily, but even among these there are more types and ways of calculating how much money we actually get for our work. Most often it is based on time (hourly wage or fixed salary), but performance-related pay is starting to spread too.

Through student cooperatives student work is typically paid for in hourly wage, mostly for flexibility since often it varies when and how much the student can work. In this case a gross hourly wage is used, which is than multiplied by the hours worked. This leads to the gross salary at the end of the month. From the gross salary 15% personal income-tax is deducted and we get the net salary, as in, the amount that we actually get.

So, for instance if you work 80 hours in a month with a 1000 Forints/hour gross hourly wage you can calculate your salary the following way: you multiply 80 hours with 1000, which is 80.000, then deduct 15 per cent, which is 12.000 Forints, so in the end you earn 68.000 Forints a month.

Fixed wages are most often used for people who work full time, in this case the salary is calculated for a month, or possibly a week in the contract, and from this they deduct the taxes and contributions (more on this later). For this a time period is used too, most often 8 hours a day, or 40 hours a week, which amounts to full time employment.

For hourly wage work, no matter how much effort goes into your work, you always get the agreed upon wage. Many companies try to motivate their employees by paying performance-related wage, meaning the more productive you are for the company and the more profit you generate for it, the more, or in the opposite case the less, money you get. This is most typical in finance or sales, where the salary/bonus/commission is usually easier to calculate.

Rules of salary: minimum wage, guaranteed minimum wage

In order to avoid certain dishonest companies employing people for very little money, governmental intervention is required. The government is required to set a minimum wage, under which it is illegal to pay for any employee.

In 2017 the gross minimum wage (without anything deducted) for the entire month (full time) is 127.500 forints, which comes out to 29.310 forints a week, or 5870 forints a day, or 733 forints an hour. It is not (should not be) legally possible to pay an employee in Hungary under this amount. For student work this is a bit different, since it is essentially part time employment. But it is also true for students that they cannot get paid less for their work. (as in less than 733 forints an hour)

The Guaranteed Minimum Wage is for those, who work in a position that requires at least secondary education – in 2017 for the whole work month this is 161.000, which comes out to 37.020 forints a week, or 7410 forints a day, or 926 forints an hour. Guaranteed minimum wage is only required to be paid if the job requires it, so for instance if your job does not require it, you may not get it.


Most often payment is done via bank transfer, but it does happen that some people get paid in cash. In both cases a series of complicated contracts obligate the employer to ensure the money is transferred safely, and the cash flow is transparent.