What European country has the highest hourly labour costs?

Luxembourg had the highest hourly labour costs in the European Union in 2023, at €53.9, ahead of Denmark (€48.1) and Belgium (€47.1), new data from Eurostat has found.

The two main components of labour costs are wages and salaries and non-wage costs (such as employers’ social contributions), and for Europe as a whole, hourly labour costs came in at €31.8 in the EU and €35.6 in the euro area last year, compared to €30.2 and €34.0, respectively, in 2022.

The countries with the lowest hourly labour costs in Europe included Bulgaria (€9.3), Romania (€11.0) and Hungary (€12.8), the data showed.

Hourly labour costs by sector

In the industrial sector, hourly labour costs stood at €32.2 across the EU, while in construction, they stood at €28.5 and in services at €31.8. In the mainly non-business economy, excluding public administration, they stood at €32.4.

In 2023, hourly labor costs across the entire economy, expressed in euros, increased by 5.3% in the EU compared to 2022, and by 4.8% in the euro area.

Among the euro area countries, hourly labour costs rose in all nations. The most significant increases were observed in Croatia (14.2%), Lithuania (12.4%), and Estonia (11.7%).

Outside the euro area, the largest increases were recorded in Hungary (17.0%), Romania (16.5%), Bulgaria (14.0%), and Poland (12.4%), expressed in the national currency of each, according to Eurostat.

Hourly Labour Costs in European Countries (2023)