Ranking of European average salaries, which country leads?

Average salaries in Europe vary greatly, significantly influencing employment and work decisions. These differences may arise from country-specific regulations, labor laws, industry sectors and economic development. Northern and Western European countries have the highest average net incomes, while Eastern and Southern European countries report much lower figures.

How do average incomes compare across Europe?

Average annual net income is calculated by subtracting income taxes and social security contributions from gross annual income and then adding family allowances. Different family situations, such as being single or married and the number of dependent children, affect net earnings. Switzerland tops the list with an impressive average annual profit of €85,582, significantly higher than any other country in the region, according to Eurostat, the EU's official statistics office. After Switzerland, Iceland and Luxembourg reported average earnings of €53,885 and €49,035, respectively. Norway and the Netherlands also recorded net profits of over €45,000.

Average net earnings within the EU were €28,217, serving as a benchmark for comparison. Countries such as France (€31,481) and Sweden (€33,926) slightly exceed the EU average, while others, including Italy (€24,207) and Spain (€23,568), fall below it. Among Europe's major economies, Germany had the highest net profits at €38,086. The last available figure for the UK is from 2019, making direct comparison difficult, but it was €35,783, which shows where the UK stands. All these figures highlight the significant income differences that exist even among the wealthiest nations of Europe.

At the other end of the spectrum, countries such as Turkey and Bulgaria report the lowest average annual net incomes, 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 bottom of the earnings scale.

Salaries regulated by PPS

When you adjust 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 with 47,403 PPS, but the gap with other countries narrows. This figure underlines Switzerland's strong economic position and high standard of living, significantly surpassing other countries in the region.

After Switzerland, the Netherlands and Norway also show strong net gains with PPS 38,856 and PPS 36,288 respectively. Luxembourg and Austria round out the top five, reporting over 35,000 PPS. These countries, located mainly in Northern and Western Europe, benefit from strong economies, advanced infrastructure and favorable labor laws, contributing to their high profits.

Lower net profits in Eastern and Southern Europe

In contrast, countries in Eastern and Southern Europe generally report lower average net income in PPS terms. Slovakia, for example, has the lowest average annual net income at PPS 14,758. Turkey (2022), Latvia and Bulgaria also fall at the lower end of the spectrum, each with less than 16,000 PPS. These figures highlight economic disparities within the continent, influenced by various factors such as economic development, labor market conditions and the cost of living.

Among the main economies of Europe, Germany stands out with net profits of 34,914 PPS. Although the most recent data for the United Kingdom is from 2019, it reported 29,757 PPS, showing its competitive position within Europe. Countries such as Belgium, Ireland and Sweden also perform well, with earnings exceeding PPS 30,000. These statistics reflect the economic stability and higher living standards in these regions.

Number of dependent children and marital status significantly affect net earnings across Europe. While the ranking of certain countries varies under these different circumstances, the overall changes are generally not dramatic. All these inequalities in net earnings have important implications for the quality of life, economic stability and social equality within Europe. Policymakers and stakeholders consider these findings in their efforts to address income inequality and promote balanced economic growth across the continent.

Wage transparency in the EU

The EU is promoting pay transparency with new rules approved on April 24, 2023. These rules require companies to share pay information and address any gender pay gap above 5%. Pay transparency helps workers exercise their right to equal pay and aims to close the gender pay gap.