Catalina Espinosa
Research expert covering society, economy, and politics for Europe and the EU
Earnings and wages in Europe - statistics & facts
The average net earnings for a full time employee in the European Union was 26,136 euros a year in 2022, representing a roughly 1,200 Euros increase on the previous year. Of Europe's largest economies, Germany was the country with the highest annual salaries at an average of almost 59,000 euros a year, followed by the United Kingdom and France, both with average salaries of over 50,000 euros, while Italy and Spain had considerably lower wage levels, at less than 45,000 euros. The country with the highest salaries of all in Europe, however, was the small island nation of Iceland, with annual salaries worth approximately 80,000 U.S. dollars a year. While nominal wages have tended to grow by around two percent per year in the Eurozone currency area, real wage growth has turned negative in recent years due to high inflation in the aftermath of the coronavirus pandemic - real wages declined by 5.2 percent in 2022. For some countries this trend was even more pronounced, with the purchasing power of workers in Czechia declining by 8.2 percent in real terms during 2022.
Net earnings for a single individual without children in the European was approximately 26,000 euros in 2022, marking a increase of over 5,000 euros a year since 2013. In spite of the economic crisis which broke out across Europe in 2020 due to the coronavirus pandemic, net earnings did not decline for any household type due to increased tax allowances and social transfers which governments provided to support income. Additionally, across Europe governments have put in place income supports for families with children, meaning that their net earnings are boosted through tax cuts and family allowances, amounting to around 5,000 euros a year for single-earner families and 3,000 euros a year for double-earner families.
Nevertheless, the share of total national income taken by the top 10 percent of earners in Europe has increased from 31 percent in the early 1980s to over 36 percent today. On the other hand, the pay gap between men and women has been consistently declining in recent years and women have claimed a growing share of total income earned from labor. Significant disparities still remain in many European countries, however, with the difference between the average monthly earnings of male and female employees being 2,500 U.S. dollars in Switzerland, 1,750 dollars in the Netherlands, and 1,700 dollars a month in Germany in 2022. Turkey, Bosnia, and Austria were the three European countries where women earned the smallest share of total labor income.
Wages and earnings across Europe
The countries in Europe with the highest wage levels tend to be in Northern and Western Europe, with Iceland, Luxembourg, Switzerland, Belgium, Denmark, Austria, and the Netherlands all having average annual salaries of greater than 60,000 U.S. dollars. On the other hand, countries in Eastern Europe tend to have the lowest wages in the continent, with countries outside of the EU such as Ukraine, Belarus, Russia, and Moldova having net minimum wages worth less than 300 euros a month. For countries within the European Union, Bulgaria had the lowest statutory minimum wage, at 477 Euros a month, less than their non-EU neighbors such as Montenegro, Serbia, and Turkey, while Luxembourg had the highest monthly minimum wage, at 2,600 euros a month.Net earnings for a single individual without children in the European was approximately 26,000 euros in 2022, marking a increase of over 5,000 euros a year since 2013. In spite of the economic crisis which broke out across Europe in 2020 due to the coronavirus pandemic, net earnings did not decline for any household type due to increased tax allowances and social transfers which governments provided to support income. Additionally, across Europe governments have put in place income supports for families with children, meaning that their net earnings are boosted through tax cuts and family allowances, amounting to around 5,000 euros a year for single-earner families and 3,000 euros a year for double-earner families.
Taxes, transfers and inequality
Due to the highly progressive system of taxes and social transfers in many European countries, net earnings are usually markedly less than gross wages, with the average rate of taxation for a single person in the European Union being equal to roughly 30 percent of their gross annual earnings. Belgium stands out in this regard, as while the country has the fourth highest average wages in Europe, the fact that it has the highest average taxation rates means that these wages translate into only the 11th highest annual net earnings. While this may be seen as a drawback for high earners, countries with strong systems of progressive taxes and social transfers reduce income disparities between the richest and poorest.Nevertheless, the share of total national income taken by the top 10 percent of earners in Europe has increased from 31 percent in the early 1980s to over 36 percent today. On the other hand, the pay gap between men and women has been consistently declining in recent years and women have claimed a growing share of total income earned from labor. Significant disparities still remain in many European countries, however, with the difference between the average monthly earnings of male and female employees being 2,500 U.S. dollars in Switzerland, 1,750 dollars in the Netherlands, and 1,700 dollars a month in Germany in 2022. Turkey, Bosnia, and Austria were the three European countries where women earned the smallest share of total labor income.
