Eurostat: Hourly Labour Costs Ranged from EUR 6.5 in Bulgaria to EUR 45.8 in Denmark in 2020

In 2020, average hourly labour costs across the economy (excluding agriculture and public administration) are estimated at EUR 28.5 for the European Union and EUR 32.3 within the Euro area. This represents an increase compared to EUR 27.7 for the EU and EUR 31.4 for the Euro area in 2019.

These estimates come from data on labour cost levels published on Wednesday by European official statistics Eurostat.

According to the presented data, the lowest labour costs are in Bulgaria and the highest in Denmark.

Average hourly labour costs in the EU mask significant differences between EU member states, with the lowest hourly labour costs recorded in Bulgaria (only EUR 6.5), followed by Romania (EUR 8.1) and Hungary (EUR 9.9), while the highest were in Denmark (EUR 45.8), Luxembourg (EUR 42.1) and Belgium (EUR 41.1).

Hourly labour costs in 2020 in industry across the EU were EUR 28.8 and  EUR 34.8 in the Euro area. In construction, they were EUR 25.6 and EUR 29.0 respectively. For services sector, hourly labour costs in the EU were EUR 28.2 and in the Euro area EUR 31.1. In the mainly non-profit economy (excluding public administration), they were EUR 29.7 and EUR 33.1 respectively.

Eurostat points out that the two main components of labour costs are wages and other expenditures (e.g. for social security contributions from employers). The share of non-wage spending in total labour costs for the EU was 24.5% and 25.0% in the Euro area in 2020.

Between 2019 and 2020, hourly labour costs, expressed in euro, increased 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 (down 4.7%), Cyprus and Ireland (down 2.7%). The largest increases were recorded in Portugal (growth by 8.6%), Lithuania (by 7.5%),Slovakia (by 7%), and the least in Luxembourg (by 0.5%), Finland (by 0.7%) and the Netherlands (by 0.8%).

For non-euro area Member States, hourly labour costs, expressed in national currency, increased in all EU countries in 2020, with the exception of Croatia (down 1%).

The largest increase was recorded in Hungary (jump by 7.9%), followed by Bulgaria (by 7.8%), Czech republic (+7.4%). The least they increased in Sweden (+1.1%) and Denmark (+2.0%).

In 2020, most EU Member States introduced a number of payroll support schemes to alleviate the negative impact of the coronavirus pandemic on businesses and employees. These support schemes were mainly targeted at the so-called reduced working hours and in support of the so-called temporary workforce cuts, wholly or partly offset by governments. These schemes are usually recorded as subsidies (or tax relief) recorded with a negative sign in the labour cost component, excluding wages.