Labour cost structural statistics - levels

Data from January 2015, most recent data: Further Eurostat information, Main tables and Database. Planne article update: November 2018.

This article is based on the latest vintage of the 4-yearly Labour cost survey (LCS), with reference year 2012. Another article, highlighting the changes between 2008 and 2012 is available here: Labour cost structural statistics - changes.

In 2012, the mean hourly labour cost in the European Union (EU) was EUR 24.1 per hour worked. In the economic sector "financial and insurance activities" (NACE Rev.2 Section K) it was 70 % more (EUR 41.0), while in the economic sector "accommodation and food service activities" (NACE Rev. 2 Section 1) it was 41 % less (EUR 14.3).

On average, full-time employees worked 33.2 hours per calendar week (i.e. all weeks of the year including e.g. holidays periods), while part-time employees worked 17.2 hours, slightly more than 50 % of full-timers.

For hours paid, which include holidays and paid sick leave but exclude unpaid overtime, the EU average for full time employees was 37.8 hours per calendar week.

Wages and salaries, including social contributions payable by employees, represent the largest share (75 %) of total labour costs, followed by social contributions paid by employers (23 %). The remainder (2 %) is absorbed by vocation training costs, other expenditure and taxes less subsidies on labour.

Figure 1: Average number of hours worked per week per part-time / full-time employee, by country - Source: Eurostat - LCS 2012 (lc_n12num2_r2)
Figure 2: Hours paid and hours worked per calendar week, per full-time employee, by country - Source: Eurostat - LCS 2012 (lc_n12num2_r2)
Table 1: Total number of hours worked by size classes in proportion of the national total, by country - Source: Eurostat - LCS 2012 (lc_n12num1_r2)
Table 2: Total number of hours worked by selection of NACE industries in proportion of the national total, by country - Source: Eurostat - 2012 (lc_n12num1_r2)
Figure 3: Hourly labour costs levels in EUR and PPS, by country - Source: Eurostat - LCS 2012 (lc_n12cost_r2)
Map 1: Hourly labour costs levels in EUR by NUTS I region - Source: Eurostat - LCS 2012 (lc_r12cost_r2)
Table 3: Hourly labour costs by selection of NACE industries compared to the national level - Source: Eurostat - LCS 2012 (lc_n12cost_r2)
Figure 4: Structure of the hourly labour cost: wage costs (regular and non-regular costs) and non-wage costs, by country - Source: Eurostat - LCS 2012 (lc_n12struc_r2)
Figure 5: Breakdown of non-wage costs (as a proportion of total labour cost), by country - Source: Eurostat - LCS 2012 (lc_n12struc_r2)

Main statistical findings

Hours worked and hours paid

In 2012, full-time employees worked an average of 33.2 hours per calendar week in the EU, while part-time employees worked 17.2 hours (Figure 1). The highest weekly working hours for full-time employees were observed in Malta (37.5 hours), followed by the United Kingdom (36.2 hours) and Romania (35.4 hours), while Italy (29.9), France (29.7) and Belgium (28.0) recorded less than 30 working hours.

The highest numbers of hours worked by part-time employees in the EU were observed in the Czech Republic (21.0 hours) and Hungary (20.7). At the opposite end of the scale, part-timers in Denmark (12.3), Germany (14.9), Lithuania (15.4), Romania (15.9), Poland (15.9), Belgium (16.1), Greece (16.2), the Netherlands (16.4) and Portugal (16.4) had the lowest number of hours worked.

Looking at hours paid, which also include holidays and paid sick leave but exclude unpaid overtime, the EU average for full time employees was 37.8 hours per calendar week (Figure 2). At country level, the average ranged from 29.5 hours per calendar week in Belgium (which may be underestimated; it was 34.2 hours in 2008), 35.6 in France and Norway, and 35.7 in Denmark to 42.5 hours in Malta, 44.8 in Iceland and 45.6 in Turkey.

Hours worked by enterprise size class

In the EU as a whole, the highest share of hours worked was observed in enterprises employing 1 000 employees or more (36 %), followed by enterprises with 50 to 249 employees (24 %) and those employing between 10 and 49 employees (21 %). The lowest shares were recorded for enterprises with 500 to 999 employees (9 %) and 250 to 499 (10 %) (Table 1). It should be noted that the share of total hours worked by size-class in each country is the result of the combination of the number of employees and the number of enterprises for a given size-class.

Different patterns emerge across countries: enterprises with 10 to 49 employees represented a particularly high share of hours worked in Turkey (42 %), Cyprus (40 %), Estonia (33 %), Bulgaria and the former Yugoslav Republic of Macedonia (both 32 %). In contrast, they had a very low share in Poland (2 %).

Enterprises with 50 to 249 employees had a high share of hours worked in the former Yugoslav Republic of Macedonia (40 %), Lithuania, Hungary and Slovenia (all 36 %) as well as Estonia (35 %). Poland was characterized by a high share of hours worked in enterprises with 250 to 499 employees (28 % against 10 % for the EU) and 500 to 999 employees (20 % against 9 %).

For the largest enterprises i.e. with more than 1000 employees, the highest shares were recorded in the United Kingdom and Sweden (both 49 % against 36 % for the EU as a whole), and the lowest in the former Yugoslav Republic of Macedonia (8 %), Cyprus (10 %), Bulgaria, Estonia, Lithuania and Turkey (all 15 %), Luxembourg and Slovenia (both 18 %) followed by Greece (19 %), Latvia and Malta (both 20 %), Croatia (22 %) and the Czech Republic (25 %).

Hours worked by selection of industries

Turning to the breakdown by economic sectors (Table 2), more than one fifth of the total hours worked in the EU were registered in "Manufacturing industry" (NACE Rev.2 Section C); 15 % were worked in "Wholesale and retail trade" (NACE Rev. 2 Section G) and 13 % in "Human health and social work" sector (NACE Rev. 2 Section Q).

With the exception of Luxembourg (14 %) for "Financial and insurance activities" (NACE Rev.2 Section K) and Cyprus (16 %) for "Accommodation and food service activities" (NACE Rev.2 Section I), these two economic sectors recorded the lowest share of hours worked (4 % each) in the EU.

The highest shares in hours worked for manufacturing were observed in the Czech Republic (34 %), Slovakia (32 %) and Slovenia (30 %) and the lowest in Luxembourg and the United Kingdom (both 11 %). For "Human health and social work" (NACE Rev. 2 Section Q), the highest proportions were recorded in Denmark (21 %), Finland and Sweden (both 20 %) and Belgium (19 %).

Finally, the proportions of hours worked in the "Education sector" (section P) were particularly high in Iceland (17 % against 8 % for the EU), Sweden (15 %) and the Baltic countries: Latvia (15 %), Lithuania (14 %) and Estonia (13 %), and particularly low in Luxembourg (1 %), Cyprus (3 %), Austria, Turkey and Norway (all 4 %).

Hourly labour costs in euros and purchasing power

In 2012, the highest hourly labour costs in the EU were observed in Denmark (EUR 40.1), followed by Belgium (EUR 38.1) and Sweden (EUR 37.3), while the lowest were recorded in Bulgaria (EUR 3.4) and Romania (EUR 4.1) (Figure 3, blue bars).

Disparities narrow considerably when hourly labour costs are expressed in purchasing power standards (PPS), a measure which accounts for price differentials across countries, in particular for those with high labour costs (Figure 3, black dashes). For instance, the hourly labour costs recorded in Norway and Switzerland are similar to those of Belgium. Moreover, a large group of countries (Italy, Ireland, Austria, Germany, the Netherlands, Luxembourg, France, Sweden and Denmark) have similar hourly labour costs in PPS terms. Finland and more markedly Spain, the United Kingdom, Greece and Portugal have lower labour costs, together with those countries, mostly from Eastern Europe, that joined the EU in 2004 or later.

Hourly labour costs by European regions

Map 1 shows how the hourly labour costs vary across European (NUTS 1) regions: labour is less costly in the Eastern part of Europe. Beside this general trend, it can be observed that for several countries (e.g. Germany, Spain, France, Austria, Sweden and the United Kingdom) labour is more expensive in the region where the capital city is located than in the others.


Hourly labour costs by economic sector

"Financial and insurance activities" and "Professional, scientific and technical activities" are the NACE sectors which recorded the highest hourly labour costs in the EU (Table 3). The hourly labour costs were 70 % above the EU average for the former and 36 % for the latter. At the other extreme, the hourly labour cost was 41 % below the EU average in the "Accommodation and food service activities" sector.

Structure of labour costs

The costs borne by employees to employ labour, called ‘labour costs’, are made up of the following components: compensation of employees (D1), vocational training costs (D2), other expenditure (D3) such as recruitment costs and money spent on uniforms, taxes paid by the employer on behalf of employees (D4) less subsidies (D5) received as incentives to employ labour, as shown in the diagram below.

Diagram 1: Structure of labour cost

Wages and salaries, including social contributions payable by employees (75 %) and social contributions paid by employers (23 %) represent the highest share of total labour cost. The rest (2 %) is absorbed by vocational training costs, other expenditure and taxes less subsidies received on labour.

Figures 4 and 5 provide a breakdown of the total labour costs by the above mentioned elements. In contrast to the rest of this article, both charts below also include information on apprentices.

The main part of labour costs corresponds to ‘Compensation of employees’ including (gross) wages and salaries (D11) and employers' social contributions (D12). Wages and salaries are further split, distinguishing between direct remuneration, bonuses and allowances paid in each pay period (D11111), direct remuneration, bonuses and allowances not paid in each pay period (D11112), payments to employees’ savings schemes (D1112), payments for days not worked (D1113) and wages and salaries in kind (D1114). Similarly, employers' social contributions (D12) are split into employers’ actual social contributions (D121) and employers’ imputed social contributions (D122) both excluding apprentices, as well as employers’ social contributions for apprentices (D123).

In 2012, the average share of direct remuneration, bonuses and allowances paid in each pay period (D11111) was 61 % in the EU, the highest being observed in Malta (81 %), followed by Bulgaria, Denmark, Poland and the United Kingdom (all above 70 %). The former Yugoslav Republic of Macedonia recorded the overall highest share (82 %). whereas the lowest shares were observed in Austria (51 %), the Czech Republic (54 %), the Netherlands (56 %) and Spain (56 %). The same 4 countries however recorded the highest shares for bonuses and allowances not paid in each pay period (D11112), all above 10% together with Portugal and Greece, while the EU average stood at 6 %. At EU level, the share of wages and salaries (D112) for apprentices represented 0.5 % of total labour costs. This proportion was higher than 1% in the case of Denmark, Germany and Finland (Figure 4).

For social contributions paid by employers (D12) at EU level, the biggest share (16.5 %) of total labour cost was for statutory social contributions (D1211). In Estonia, they accounted for more than one quarter of the total labour cost (25.2 %). Denmark (0.9 %) recorded the lowest cost for statutory social security contributions, but the second highest (7.1 %) ratio for collectively agreed, contractual and voluntary social contributions (D1212), after the Netherlands (8.2 %). France (5.2 %), Lithuania (5.1 %) and Germany (4.8 %) recorded the highest shares of employers’ imputed contributions (D122). For vocational training costs (D2), enterprises in the United Kingdom (2.3 %), France (1.6 %) and Hungary (1.1 %) seem to spend more money on investing in the skills of their employees. The rest of the EU Member States recorded much lower shares, the lowest being observed in Latvia (0.1 %). While the Netherlands (2.0 %) recorded the highest share for other expenditure (D3), Lithuania (0.04 %) recorded the lowest proportion in the EU for this category. France (2.3 %) and Austria (2.2 %) had the highest shares of taxes on labour paid by employers (D4) in the EU, while in Norway this share reached 10.8 %.

Finally, among all countries in which subsidies for employing labour are applicable, employers in Belgium (3.3 %), Norway (2.0 %), Malta (1.9 %) and Serbia (1.2 %) recorded the highest rates of subsidies received (D5) in connection with employing labour, against an EU average of 0.3 % (Figure 5).


Data sources and availability

The Labour cost survey (LCS) provides details on the level and structure of labour cost data, hours worked and hours paid for employees in the European Union (EU).

Employees include all persons employed at the observation unit and with an employment contract (permanent or not), except family workers; home workers; occasional workers; persons wholly remunerated by way of fees or commission; board of Director Members; directors/managers paid by way of profit share or by fee; self-employed persons. Data do not cover apprentices except in the case of Bulgaria, Latvia, Croatia, Slovenia and Serbia where they represent a low share of the total labour force (less than 1 %).

If not otherwise stated, data refer to full-time and part-time employees working in enterprises employing 10 employees or more, in all economic sectors except: agriculture, forestry and fishing (NACE Rev. 2 Section A) and public administration and defence; compulsory social security (NACE Rev. 2 Section O). The transmission of LCS data for NACE section O is not mandatory and the corresponding data are available for 23 Member States only. Hence, EU/EA aggregated data for NACE Rev. 2 section O is only an approximation for the EU/EA based on data of 23 Member States.

Hours worked are defined as the periods of time employees spent on direct and ancillary activities to produce goods and services, including normal periods of work, paid and unpaid overtime and time spent on preparation, maintaining, repairing, cleaning and writing reports associated to main work. They exclude periods of vacation and other public holidays, sick leave and other type of absence which employees are paid for. The average hours worked per calendar week are calculated as the total number of hours worked by a full time employee during the year divided by the decimal number of all weeks in that year (i.e. 52.29) including vacation/holidays and other periods (e.g. sick leave) where the employee is not available for producing goods and services. This number should not be confused with the standard number of hours worked during a working week which is generally higher.

Context

Labour costs refer to the total expenditure borne by employers in order to employ staff. They cover wage and non-wage costs less subsidies. They do include vocational training costs or other expenditures such as recruitment costs, spending on working clothes, etc.

In 2012, the average labour cost across EU businesses with 10 employees or more in the whole economy except public administration and defence; compulsory social security (i.e. NACE Rev.2 Sections B to S excluding O) amounted to EUR 24.2 per hour worked.

See also

Further Eurostat information

Publications

Main tables

Database

Dedicated section

Methodology / Metadata

Other information

  • Regulation 530/1999 of 9 March 1999 concerning structural statistics on earnings and on labour costs
  • Regulation 1737/2005 of 21 October 2005 amending Regulation (EC) No 1726/1999 as regards the definition and transmission of information on labour costs (Text with EEA relevance)
  • Regulation Regulation 698/2006 of 5 May 2006 implementing Council Regulation (EC) No 530/1999 as regards quality evaluation of structural statistics on labour costs and earnings (Text with EEA relevance)
  • Regulation 1893/2006 of 20 December 2006 establishing the statistical classification of economic activities NACE Revision 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC Regulations on specific statistical domains (Text with EEA relevance)
  • Regulation 973/2007 of 20 August 2007 amending certain EC Regulations on specific statistical domains implementing the statistical classification of economic activities NACE Revision 2