Unemployment trap
Tax rate on low wage earners
Sources of data:
Eurostat
2,0
Unemployment trap
The unemployment trap indicates the percentage of gross earnings lost to taxes when a person becomes employed. This occurs through the loss of unemployment benefits combined with higher tax and social security contributions.
In Hungary in 2012 a person would loose of his gross earnings when becoming employed. This is well above the EU average of 74.74% and also of the average of new member states 77.78%. This highlights that the system is extremely rigid and does not recognize a transitory period not any atypical job situations that are more and more common experiences to workers.