Minimum wage increase directly impacts the minimum social contribution and social tax payable by entrepreneurs, as well as the revenue limits and tax-free thresholds applied under the flat-rate taxation scheme, which are also adjusted for 2026.
The purpose of this article is to provide a comprehensive overview of what entrepreneurs and business owners should pay attention to from 2026 in order to ensure lawful, predictable, and financially sustainable taxation.
Rules of Social tax are changing - and it is good news!
From 2026, the application of this increased 112.5% tax base is abolished. Insured entrepreneurs and business owners are now required to pay social tax at a minimum only on the actual amount of the minimum wage or, where applicable, the guaranteed minimum wage. This change reduces mandatory burdens and makes monthly tax obligations more predictable.
How should you pay tax as a business owner in 2026?
The detailed rules governing the insurance status of business owners and the related contribution obligations were previously presented in our earlier article, available here:
A corporate entrepreneur includes, among others, a company member who personally participates in the company’s activities without an employment or service contract. In such cases, insurance coverage arises from the membership relationship, and contributions must be paid even if no income is withdrawn from the company.
The minimum monthly taxes applicable in 2026 are as follows:
| Values in Ft | Minimum wage | Guaranteed minimum |
|---|---|---|
| Calculation base | 322 800 | 373 200 |
| Contribution (18,5%) | 59 718 | 69 042 |
| Social tax (13%) | 41 964 | 48 516 |
| Sum of minimum tax | 101 682 | 117 558 |
What are your minimum taxes as an entrepreneur in 2026?
For insured entrepreneurs and business owners, the minimum tax and contribution obligations are identical on a monthly basis; therefore, the figures presented above for business owners also apply to entrepreneurs.
From 2026, an important procedural change is that entrepreneurs applying the entrepreneurial personal income tax regime will switch to quarterly filing, aligning with the reporting frequency of flat-rate taxed entrepreneurs.
However, a key difference remains: for entrepreneurs applying the entrepreneurial personal income tax regime, the rolling method cannot be applied to the payment of social security contributions and social contribution tax. Consequently, even in the case of fluctuating income, the full minimum contribution obligations must be paid for each month of operation.
If an entrepreneur pauses their activity during a month, minimum social security contributions and social contribution tax remain payable for the entire month. For this reason, it is strongly recommended to plan pauses carefully and, where possible, align them with full calendar months in order to avoid unnecessary minimum tax burdens.
Are you a flat-rate tax payer? These changes are in your favour.
The minimum wage increase effective from 1 January 2026 directly affects the revenue limits and tax-exempt thresholds applicable to flat-rate taxed individual entrepreneurs, as these values are legally tied to the minimum wage.
In general, the annual revenue limit for flat-rate taxation is ten times the annual minimum wage, amounting to HUF 38,736,000 in 2026. If an entrepreneur carries out exclusively retail activities throughout the tax year, the revenue limit is fifty times the annual minimum wage, i.e. HUF 193,680,000. If the business does not operate for the entire tax year, the revenue limit must be prorated to the days of operation.
The tax-exempt income threshold under flat-rate taxation remains one of its main advantages. In 2026, the tax-exempt income amount equals half of the annual minimum wage, i.e. HUF 1,936,800. This tax-exempt income does not need to be prorated even if the business operates for only part of the tax year.
Depending on the applicable cost ratio, the corresponding tax-exempt sales amounts are:
- 45% cost ratio: HUF 3,521,455
- 80% cost ratio: HUF 9,684,000
- 90% cost ratio: HUF 19,368,000
Conclusion
Minimum wages are increasing which result in tax increase for entrepreneurs and business owners, so everyone must be prepared and aware of the future obligation soon to come. Proper planning ensures the company and entrepreneurship to survive continuously increasing statutory burdens.
How do we support entrepreneurs?
We support business owners by determining their correct insurance status, managing tax and contribution obligations, and preparing the necessary records and returns. Although the individual entrepreneur model is less commonly applied within the hospitality and retail sectors that form our core client base, our professional team has over five years of experience and up-to-date expertise in supporting individual entrepreneurs as well.
For more details please check our services and package offers.
What to read next?
This blog post is the third and final part of our minimum wage series. In the previous articles, we presented the effects of the minimum wage increase on employees working under employment contracts, as well as on simplified employment and service contracts.
👉 Part 1 - Minimum wage changes affecting employment
👉 Part 2 – Minimum wage changes affecting simplified employment and contractors
