In 2020, average hourly labour costs in the whole economy (excluding agriculture and public administration) were estimated to be €28.5 in the EU and €32.3 in the euro area, up compared to €27.7 and €31.4 respectively in 2019. These estimates come from data on labour costs levels published by Eurostat today.
Lowest in Bulgaria, highest in Denmark
The average hourly labour costs mask significant gaps between EU Member States, with the lowest hourly labour costs recorded in Bulgaria (€6.5), Romania (€8.1) and Hungary (€9.9), and the highest in Denmark (€45.8), Luxembourg (€42.1) and Belgium (€41.1).
Hourly labour costs in industry were €28.8 in the EU and €34.8 in the euro area. In construction, they were €25.6 and €29.0 respectively. In services, hourly labour costs were €28.2 in the EU and €31.1 in the euro area. In the mainly non-business economy (excluding public administration), they were €29.7 and €33.1 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 24.5% in the EU and 25.0% in the euro area.
Source dataset: lc_lci_lev
Hourly labour costs increased most in Portugal
Between 2019 and 2020, hourly labour costs at whole economy level expressed in € rose by 3.1% in the EU and by 2.9% in the euro area.
Within the euro area, hourly labour costs increased in all Member States except Malta (-4.7%), Cyprus and Ireland (-2.7% each). The largest increases were recorded in Portugal (+8.6%), Lithuania (+7.5%) and Slovakia (+7.0%), the smallest in Luxembourg (+0.5%), Finland (+0.7%) and the Netherlands (+0.8%).
For Member States outside the euro area, the hourly labour costs expressed in national currency increased in all Member States in 2020 except in Croatia (-1.0%), with the largest increases recorded in Hungary (+7.9%), Bulgaria (+7.8%), Czechia (+7.4%) and Romania (+7.2%). They increased least in Sweden (+1.1%) and Denmark (+2.0%).
In 2020, most Member States introduced a number of support schemes to alleviate the impact of the COVID-19 pandemics on enterprises and employees. They mainly consisted of short-term work arrangements and temporary lay-offs fully or partly compensated by government. Those schemes were generally recorded as subsidies (or tax allowances) recorded with a negative sign in the non-wage component of labour costs.
In general, the number of hours actually worked decreased more than wages while taxes less subsidies fell, thus limiting the impact on the hourly labour costs.
For more information:
- Total 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. 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 less subsidies intended to refund part or all of 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 2016 Labour Cost Survey 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 and Norway where only calendar-adjusted data are available.
- Data for Austria, Denmark, Spain and Iceland are taken from national sources.
- The whole economy (except agriculture and public administration) includes NACE Rev. 2 sections B to N and P to S
- Eurostat Statistics Explained article on hourly labour costs
- Eurostat website section dedicated to labour cost statistics
- Eurostat database on labour costs
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