Labour cost structural statistics - levels
Data from 15 March 2019.
Next article update: December 2022.
This article is based on the latest vintage of the 4-yearly Labour cost survey (LCS), with reference year 2016. The changes between 2008 and 2016 are highlighted in another article available here: Labour cost structural statistics - changes.
In 2016, the mean hourly labour cost in the European Union (EU) was EUR 26.3 per hour worked and EUR 29.8 in the euro area (EA). In the economic sector "financial and insurance activities" (NACE Rev.2 Section K) it was 68.4 % higher than the EU average (EUR 44.3), while in the economic sector "accommodation and food service activities" (NACE Rev. 2 Section I) it was 41.1 % lower (EUR 15.5).
On average, full-time employees in the EU were paid for 37.9 hours per calendar week (i.e. all weeks of the year including e.g. holidays periods), while part-time employees were paid for 19.7 hours, slightly more than 50 % of full-timers.
Wages and salaries, including social contributions payable by employees, represent the largest share (76.3 %) of total labour costs, followed by social contributions paid by employers (22.3 %). The remainder (1.4 %) is absorbed by vocation training costs, other expenditure and taxes less subsidies on labour.
Weekly hours paid
In 2016, full-time employees were paid on average for 37.9 hours per calendar week in the EU, while part-time employees were paid for 19.7 hours (Figure 1). The highest average number of weekly hours paid for full-time employees were observed in Malta (40.3 hours), followed by Austria (39.9 hours) and Hungary (39.8 hours). The average weekly number of hours paid for full- time employees was below the EU average in 13 EU Member States, ranging between 35.1 hours paid in France and 37.6 hours in Portugal.
The highest numbers of average weekly hours paid to part-time employees in the EU were observed in Hungary (22.9 hours), followed by Croatia and France ( 22.7 both). The average weekly number of hours paid to part-time employees was below the EU average in 13 EU Member States, ranging between 12.9 weekly hours paid to part-time employees in Denmark and 19.5 hours in Poland.
The highest number of average weekly hours paid to all employees, be they working on a full-time or a part-time basis, in the EU was observed in Croatia (38.9 hours) followed by Slovenia (38.8 hours). The lowest numbers were recorded in the Netherlands (28.7 hours) and Belgium (28.9 hours). Those figures result from the combined effect of (1) the average number of hours paid to full-timers (2) to part-timers and (3) the proportion of part-time employees in the mentioned economies.
Hours worked by enterprise size class
In the EU as a whole, the highest share of hours worked was recorded in enterprises employing 1000 or more employees (36 %) followed by enterprises employing between 50 and 249 employees (24 %) and those employing between 10 and 49 employees (22 %). The lowest shares were recorded in enterprises with 500 to 999 employees (9 %) followed by those employing between 250 and 499 employees (10 %) (Table 1). It should be noted that the share of total number of 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.
The highest shares of hours worked in large enterprises (i.e. with more than 1000 employees) were observed in the United Kingdom (48 %) and Sweden (47 %). Denmark (43 %), Finland (42 %) and France (40 %) also showed high shares followed by Belgium (39 %) and the Netherlands (38 %). At the other extreme, the lowest shares of hours worked in large enterprises were recorded in Estonia (13 %), Cyprus (15 %), Lithuania (16 %) followed by Bulgaria, Luxembourg and Malta (all 17 %). It should be noted that size classes are measured at national level and do not take into account, for enterprise groups, the employees working in foreign affiliates.
Enterprises with 50 to 249 employees had a high share of hours worked in Slovenia and Lithuania (both 35 % against 24 % for the EU). Poland was characterised by a high share of hours worked in enterprises with 250 to 499 employees (21 % against 10 % for the EU) and enterprises with 500 to 999 employees (17 % against 9 % for the EU).
As regards small businesses, with 10 to 49 employees, the highest shares of hours worked were recorded in Cyprus (37 %) followed by Hungary and Malta (both 36 %) then Estonia and Greece (both 35 %). By contrast, they had a very low share in Poland (2 %).
Hours worked by economic sectors
In the EU, 76 % of the hours worked in 2016 were recorded in the business economy (NACE Rev. 2 sections B to N) of which: 48 % in services (NACE Rev. 2 sections G to N) ; 23 % in industry (NACE Rev. 2 sections B to E) and 5 % in construction (NACE Rev. 2 section F)(Table 2).
The highest shares for Industry were recorded in Czechia (37 %) followed by Poland (35 %), Romania (34 %) then Bulgaria, Slovenia and Slovakia (all 33 %).The lowest shares were observed in Luxembourg (12 %), Cyprus and United Kingdom (both 13 %) and Malta (14 %).
As regards the service sector, the highest shares were recorded in Cyprus (66 % against 48 % for the EU) followed by Luxembourg (63 %).
Luxembourg was characterised by a high share of hours worked in enterprises in the construction sector (13 % against 5 % for the EU) and a low share in the mainly non-business economy (12 % against 24 % for the EU).
As regards the latter sector, the mainly non-business economy, which mainly covers education and health, the highest proportions were recorded in Sweden (38 %) and Denmark (34 %) and the lowest, besides Luxembourg, in Cyprus and Austria (both 16 %).
In 2016, 26.0 % of all employees were working part-time in the EU and 28.1 % in the euro area (Table 3). In the EU, the highest share of part-time employees was recorded in the mainly non-business economy (36.4 %) and the lowest in industry and construction (both 8.7 %).
Part-time employees represented more than one third of all employees in four Member States in 2016: the Netherlands (55.1 %), Belgium (42.2 %), Germany (36.9 %) and the United Kingdom (33.0 %). Nine countries recorded a share below 10 %: Croatia (4.3 %), Romania (5.1 %), Slovenia (5.2 %), Bulgaria (5.6 %), Cyprus (6.8 %), Portugal (7.6 %), Poland (7.7 %), Slovakia (8.3 %) and Czechia (9.3 %).
Structure of labour costs
'Labour costs' are the costs borne by employees to employ labour. The components of the labour costs are: compensation of employees (D1), vocational training costs (D2), other expenditure (e.g. recruitment costs and money spent on uniforms) (D3), 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.
Wages and salaries, including social contributions payable by employees, represent the largest share (76.3 % for the EU as a whole) of total labour costs, followed by social contributions paid by employers (22.3 %). The remainder (1.4 %) is absorbed by vocation training costs, other expenditure and taxes less subsidies received on labour (Figure 2).
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 2016, the average share of direct remuneration, bonuses and allowances paid in each pay period (D11111) was 61.0 % in the EU and 58.4 % in the euro area. The highest share was observed in Malta (81.2 %), followed by Poland (72.5 %) and Denmark (71.3 %). The lowest shares were observed in Austria (50.1 %), Czechia (54.2 %), the Netherlands (54.7 %), Italy (55.3 %) and Sweden (55.4 %).
The average share of bonuses and allowances not paid in each pay period (D11112) was, in 2016, 5.7 % in the EU and 7.2 % in the euro area. The highest shares, all above 10%, were recorded in 6 EU Member States: Czechia (10.2 %), Greece (10.3 %), Spain (10.7 %), the Netherlands (11.2 %), Portugal (12.1 %) and Austria (13.3 %).
Within social contributions paid by employers (D12), Employers' actual social contributions (D121) was the main component (19.1 % of total labour costs, at EU level). In seven EU Member States, the latter accounted for more than one quarter of the total labour cost: (25.0 %) in Estonia ; (25.1 %) both in Slovakia and Italy ; (25.4 %) in Czechia, France and Belgium and (27.9 %) in Sweden. Employers' actual social contributions recorded the lowest shares of the total labour costs in Malta (5.4 %) and Denmark (7.8 %).
The highest share of vocational training costs (D2) was observed in Ireland (2.8 %) and the United Kingdom (2.5 %) followed by France (1.4 %) ; Hungary (1.4 %) and the Netherlands (1.1 %). In the remaining 23 EU Member States, the share of vocational training costs ranged between 0.1 % in Belgium and 0.7 % in Sweden.
The highest share of other expenditure paid by the employer (D3) was observed in the Netherlands (1.9 %) and Hungary (1.6 %), followed by Denmark (1.3 %), Sweden and Poland (both 1.1 %). In the remaining 23 EU Member States, the share of other expenditure paid by the employer ranged between 0.1 % in France and 0.8 % in Spain. Other expenditure paid by the employer include, in particular recruitment costs and costs for working clothes provided by the employer.
The highest share of taxes paid by the employer (D4) was recorded in France (2.5 %) and Austria (2.2 %) followed by Sweden and Denmark (both 1.5 %). In the remaining 24 EU Member States, the share of taxes paid by the employer ranged between 0.1 % in Belgium, Lithuania, Slovenia and Greece and 0.5 % in Hungary.
The share of subsidies received by the employer (D5) ranged from 0.1 % in seven EU Member States (namely: Italy, Czechia, Spain, Germany, Portugal, Slovenia and Ireland) to 3 % in Belgium, followed by France (2.1 %) and Malta (1.7 %).
Hourly labour costs in euro and purchasing power standards
In 2016, the highest hourly labour costs among EU Member States, expressed in euros, were recorded in Denmark (EUR 42.1), followed by Luxembourg (EUR 39.0), Belgium (EUR 38.6) and Sweden (EUR 37.7). The lowest levels were recorded in Bulgaria (EUR 4.5) and Romania (EUR 5.4) (Figure 3, blue bars). The highest levels, recorded for Denmark, are 9.5 times higher than the lowest, recorded for Bulgaria.
Disparities are considerably smaller when hourly labour costs are expressed in purchasing power standard (PPS), a measure which accounts for price differentials across countries (Figure 3, black dashes). In PPS, hourly labour costs range from 9.34 in Bulgaria to 35.36 in Belgium i.e. 3.8 times more.
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 voluntary.
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 paid per calendar week are calculated as the total number of hours paid 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.
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.
- Eurostat Yearbook 2012, Chapter 5: Labour market
- Regulation (EC) No 530/1999 of 9 March 1999 concerning structural statistics on earnings and on labour costs
- Regulation (EC) No 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 (EC) No 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 (EC) No 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)
- Summaries of EU Legislation: Comparable EU-wide statistics on economic activities
- Summaries of EU Legislation: Statistical classification of economic activities
- Regulation (EC) No 973/2007 of 20 August 2007 amending certain EC Regulations on specific statistical domains implementing the statistical classification of economic activities NACE Revision 2