The disparity in average annual net earnings across Europe is striking, with significant variations even when adjustments are taken into account. Average salaries in Europe vary widely, significantly impacting hiring and job decisions. These differences can arise from country-specific regulations, labour laws, industry sectors, and economic development. Northern and western European countries have the highest average net earnings, while eastern and southern European countries report much lower figures.
How Do Average Earnings Across Europe Compare?
Average annual net earnings are calculated by subtracting income taxes and social security contributions from gross annual earnings and then adding family allowances. Different family situations, such as being single or married and the number of dependent children, impact net earnings. Euronews Business examines the net earnings of a single person without children, but the chart below also provides options for different scenarios.
Switzerland tops the list with an impressive average annual net earning of €85,582, significantly higher than any other country in the region, according to Eurostat, the EU's official statistical office. Following Switzerland, Iceland and Luxembourg reported average earnings of €53,885 and €49,035, respectively. Norway and the Netherlands also recorded net earnings over €45,000.
The average net earnings within the EU was €28,217, serving as a benchmark for comparison. Countries such as France (€31,481) and Sweden (€33,926) slightly surpass the EU average, while others, including Italy (€24,207) and Spain (€23,568), fall below it.
Among Europe's top economies, Germany had the highest net earnings at €38,086. The latest available figure for the UK is from 2019, making direct comparison difficult, but it was €35,783, indicating the UK's position. All these figures highlight the substantial income differences that exist even among Europe's wealthiest nations.
On the other end of the spectrum, countries like Turkey and Bulgaria report the lowest average annual net earnings, at €8,968 and €9,355, respectively. Eastern European countries such as Romania (€11,105), Croatia (€12,330), and Hungary (€12,456) also fall towards the lower end of the earnings scale.
Related: Goodbye, secret salaries! Companies will be forced to display the salaries offered when hiring.
PPS-Adjusted Salaries
When adjusting for purchasing power standards (PPS), the landscape changes slightly. PPS is an artificial currency unit that adjusts for price level differences between countries.
Switzerland remains the highest at 47,403 PPS, but the gap with other countries narrows. This figure underscores Switzerland's strong economic position and high standard of living, substantially surpassing other nations in the region. Following Switzerland, the Netherlands and Norway also showcase robust net earnings with 38,856 PPS and 36,288 PPS, respectively. Luxembourg and Austria round out the top five, reporting over 35,000 PPS.
These countries, predominantly located in Northern and Western Europe, benefit from strong economies, advanced infrastructure, and favourable labour laws, contributing to their high earnings.
Net Earnings Lower in Eastern and Southern Europe
In contrast, countries in Eastern and Southern Europe generally report lower average net earnings in PPS terms. Slovakia, for instance, has the lowest average annual net earnings at 14,758 PPS. Turkey (2022), Latvia, and Bulgaria also fall at the lower end of the spectrum, each with less than 16,000 PPS. These figures highlight the economic disparities within the continent, influenced by various factors such as economic development, labour market conditions, and cost of living.
Among Europe's top economies, Germany stands out with net earnings of 34,914 PPS. Although the latest data for the UK is from 2019, it reported 29,757 PPS, indicating its competitive position within Europe. Countries such as Belgium, Ireland, and Sweden also perform well, with earnings exceeding 30,000 PPS. These statistics reflect the economic stability and higher living standards in these regions.
The chart above illustrates how the number of dependent children and marital status significantly impact net earnings across Europe. While the rankings of certain countries shift under these varying circumstances, the overall changes are generally not dramatic.
Implications for Quality of Life and Economic Stability
All these disparities in net earnings have significant implications for the quality of life, economic stability, and social equity within Europe. Policymakers and stakeholders consider these findings in their efforts to address income inequality and promote balanced economic growth across the continent.
Pay Transparency in the EU
The EU promotes pay transparency with new rules adopted on 24 April 2023. These rules require companies to share salary information and address any gender pay gap over 5%. Pay transparency helps workers enforce their right to equal pay and aims to close the gender pay gap.
As Europe continues to navigate these economic disparities, understanding and addressing the root causes of salary differences will be crucial for fostering a more equitable and prosperous continent.
Source: Euronews
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