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Hungary’s employers agree to implement 2010 wage rise

Hungarian employers said Thursday they will implement a nominal 4%-6% gross wage increase, agreed with the government last year, by April or July 1 this year, Zoltan Zs. Szőke, president of an alliance of employers, said. There has been pressure for a wage increase particularly among low earners since many suffered a drop in net income after the government reshuffled tax benefits Jan. 1 to favor families with several children. The government introduced a flat 16% personal income tax Jan. 1, which resulted in significantly higher net incomes for high-wage earners who used to pay a much higher level of personal income tax. However, many low-wage earners suffered a drop in net income despite the move because of the government’s tax-benefit reshuffle.