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Bulgaria has the lowest average hourly labor expenses in the EU, while Luxembourg has the highest rates


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.

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%).

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

Source: Eurostat
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