To reduce the gender pay gap in the EU, a new payment transparency directive is on its way, which should be implemented in all member states by June 2026. In turn, employers will need to implement various measures to increase transparency, while the new rules will improve employees’ position in bargaining for better salaries.
New regulations from June 2026
The EU directive on payment transparency should be implemented in member states by 7 June 2026. Individual laws introduced by the members will probably vary, but since the directive is public, employers can already start to prepare for the changes coming.
- Stricter gender pay gap reporting: the pay gap should not be more than 5%
- Transparency on salaries and progression pathways within the organization
- Transparency on salary ranges in recruitment
Payment transparency in Hungary today
In Hungary, there is much to improve. Salary ranges and career pathways are already public in the public sector. However, salaries in the private sector are far from transparent. The only requirement is that they should be above the minimum wage, which is increased every year.
The gender pay gap in Hungary is 18%, which is pretty high compared to the EU average (11%). However, this figure is unadjusted, meaning it does not consider that women often work in roles with lower salaries, and the number of women in managing roles is also relatively low.
The Hungarian Labor Code already requires equal pay, but this requirement is difficult to enforce while salaries are typically considered a trade secret and thus confidential. Currently, only companies listed on the stock exchange are required to disclose the salaries of executives, board members, and other high-ranking officials, but not of other, regular employees. Moreover, discussing salaries in Hungary is often considered inappropriate or taboo, and employees are often wary of discussing it among ourselves or with their supervisory in fear of hurting their careers.
In recent years, some international companies have introduced policies that improve transparency, but these are more like unique initiatives and less like national trends.
Changes to prepare for from 2026
The new regulations that should be introduced in line with the EU payment transparency directive will concern all areas of HR, from recruitment to reporting. It is important to note, however, that the new regulations will apply only to employees, but not to freelancers or other providers.
Recruitment
In the future, job advertisements should include the intended salary or salary range, providing candidates with a more stable basis for negotiations. At the same time, job advertisements will be required to use gender neutral wording and criteria.
Reporting
Companies with more than 100 employees will need to create regular gender pay gap reports. Small and medium-sized businesses might be exempt, but that will depend on the Hungarian legislation. It is not clear how they should verify that the gender pay gap is below 5% at their organizations.
Companies with 250+ employees will be required to create a gender pay gap report every year, while companies with 100-249 employees every three years. If it is found that the gender pay gap is above 5%, new measures should be taken to improve the situation.
Improved employee rights
The introduction of the new regulations will hopefully induce a culture shift towards payment transparency. While salaries will need to be advertised alongside new positions, employees will also have the explicit right to ask about salary ranges, job levels, career progression pathways and pay progression at any time. Employees may also ask about the salaries of colleagues who perform the same work (while observing the protection of personal information under GDPR), and it will be illegal to try and stop employees from discussing salaries among each other when trying to identify issues. At the same time, labor contracts will not be allowed to include clauses about the confidentiality of salaries, meaning that all contracts currently including such sections should be updated to remove them.
The burden of proof shifts
Currently, it is usually the employee’s task to provide proof if they think there is an unreasonable wage gap at their workplace. From now on, in such cases the employer will be required to provide proof to the contrary. This is intended to put pressure on employers to comply with regulations at all times.
Expected benefits
The measures implemented to improve payment transparency are expected to decrease the gender pay gap while improving the rights of every employee in general. Even though introducing measures at your business and improving salaries might seem costly in the short run, transparency can significantly promote your employer brand and increase retention, which will in turn reduce your costs in the long run.
Things to do before 2026
Although new regulations will probably not be introduced for another year, preparations take time, and it makes sense to start working on improving payment transparency at your Hungarian company already. As a first step, you can do a quick audit focusing on payment gaps among your current employees. Then you can take a look at the transparency of salaries and progress pathways, and how they are communicated during recruitment. Then you can start creating benchmarks for equalizing work and pay. If you find that there is a serious gender pay gap, you will also need to allocate funds to reduce it.
Helpers Finance at your service
Our team at Helpers Finance offers not only accounting and payroll services, but also a wide range of services connected to HR support and compliance. If you need assistance to improve payment transparency at your Hungarian company, feel free to reach out and ask for a consultation. We would be happy to support you with the full range of your payroll and HR needs.
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