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12% of the EU's labour potential remains unexploited
Hourly labour costs ranged from €8 to €51 in the EU
In 2022, the average hourly labour costs in the whole economy (see methodological note) were estimated to be €30.5 in the EU and €34.3 in the euro area, up compared with €29.0 and €32.8, respectively, in 2021.
These estimates come from data on labour costs levels published by Eurostat today. This article presents only a handful of findings from the more detailed Statistics Explained article.
Lowest in Bulgaria, highest in Luxembourg
The average hourly labour costs mask significant gaps between EU countries, with the lowest hourly labour costs recorded in Bulgaria (€8.2) and Romania (€9.5), and the highest in Luxembourg (€50.7), Denmark (€46.8) and Belgium (€43.5).
Hourly labour costs in industry were €30.7 in the EU and €36.6 in the euro area. In construction, they were €27.3 and €30.8, respectively. In services, hourly labour costs were €30.2 in the EU and €33.3 in the euro area. In the mainly non-business economy (excluding public administration), they were €31.3 and €34.8 respectively.
The two main components of labour costs are wages & salaries and non-wage costs (e.g. employers' social contributions). The share of non-wage costs in total labour costs for the whole economy was 24.8% in the EU and 25.5% in the euro area. The lowest shares of non-wage costs were recorded in Lithuania (5.4%) and Romania (5.3%) and the highest in France (32.0%), Sweden (31.9%) and Italy (27.8%).
Source dataset: lc_lci_lev
Hourly labour costs increased most in Bulgaria
In 2022, compared with 2021, hourly labour costs at whole economy level expressed in € rose by 5.0% in the EU and by 4.7% in the euro area.
Within the euro area, hourly labour costs increased in all Member States. The largest increases were recorded in Lithuania (+13.3%), Ireland (+9.3%) and Estonia (+9.1%).
For EU countries outside the euro area, the hourly labour costs expressed in national currency increased in 2022 in all countries, with the largest increases recorded in Bulgaria (+15.3%), Hungary (+13.9%), Romania (+12.2%) and Poland (+11.7%). They increased the least in Denmark (+2.3%).
In 2022, most EU countries phased out the support schemes introduced in 2020 and extended in 2021 to alleviate the impact of the COVID-19 pandemic on enterprises and employees. They mainly consisted of short-term work arrangements and temporary layoffs fully or partly compensated by government. Those schemes were generally recorded as subsidies (or tax allowances) with a negative sign in the non-wage component of labour costs. Therefore, the phasing out of COVID-related support schemes make a positive contribution to the growth in hourly labour costs (please consult lc_lci_lev).
For more information
- Statistics Explained article on hourly labour costs
- Thematic section on labour costs
- Database on labour costs
- Statistics 4 beginners on the labour market
Methodological notes:
- Total Labour Costs refer to the total expenditure borne by employers in order to employ staff. They cover wage and non-wage costs minus subsidies. They do include vocational training costs or other expenditures such as recruitment costs, spending on working clothes, etc. Wage and salary costs include direct remunerations, bonuses, and allowances paid by an employer in cash or in kind to an employee in return for work done, payments to employees’ saving schemes, payments for days not worked and remunerations in kind such as food, drink, fuel, company cars, etc. Non-wage costs include the employers’ social contributions plus employment taxes regarded as labour costs minus subsidies, intended to refund part or all of the employer’s cost of direct remuneration.
- Labour costs data presented in this news item cover enterprises with 10 or more employees (including apprentices). Estimates are obtained by extrapolating the 2020 Labour Cost Survey (LCS) hourly labour cost data expressed in national currencies using the quarterly Labour Cost Index (LCI) transmitted by the Member States. In order to calculate monetary estimates in € and derive European aggregates, average annual exchange rates have been used. The LCI not adjusted for calendar effects is used, except for Denmark, Sweden, Iceland and Norway, where only calendar-adjusted data are available.
- Austria, Spain, Finland and Iceland: data are taken from national sources.
- Croatia: estimates are based on 2016 Labour Cost Survey.
- In this publication, the whole economy includes all economic activities except NACE Rev. 2 sections: ‘A - Agriculture, forestry and fishing’, ‘O - Public administration and defence; compulsory social security’, ‘ T - Activities of households as employers; undifferentiated goods - and services - producing activities of households for own use’ and ‘U - Activities of extraterritorial organisations and bodies’.
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