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A deal was reached on Monday to hike the minimum wage by 4 percent from Feb. 1.

The monthly minimum wage for unskilled workers before tax will rise from 161,000 forints (EUR 450) to 167,400 (EUR 466), while skilled workers will receive 219,000 forints (EUR 610), up from 210,600.

The agreement struck by unions, employers and government representatives contains a further hike from the middle of the year to 169,000 forints for unskilled worker and 221,100 forints for skilled employees. The deal hinges on cutting payroll tax by a further two percentage points to 13.5 percent, Sándor Bodó, the state secretary for employment policy, said.

All three large employer associations and the three largest union groups signed the deal, while the MASZSZ union refused, saying the hikes did not keep pace with food price inflation.

Featured photo illustration by Márton Mónus/MTI