There are various indicators for comparing salaries and incomes, but a new Eurostat calculation, the average annual full-time adjusted salary per employee, stands out as particularly useful, according to The Euronews.
The indicator is calculated based on average annual full-time wages and takes into account the purchasing power standard (PPS). According to it, differences in average annual full-time salaries in the EU are smaller than in nominal terms.
According to Eurostat, in 2023, the annual full-time wage ranged from €13,503 in Bulgaria to €81,064 in Luxembourg. However, the EU average stood at €37,863.
Nine EU member states have wages above the bloc’s average, whereas 17 countries offer lower wages, according to the report. In addition to Luxembourg, adjusted average salaries exceeded €50,000 in five other countries: Denmark (€67,604), Ireland (€58,679), Belgium (€57,989), Austria (€54,508) and Germany (€50,988). The Netherlands is not included in the data due to differences in methodology.
At the bottom of the list, Bulgaria is followed by Hungary (€16,895), Greece (€17,013), Romania (€17,739), Poland (€18,054) and Slovakia (€19,001).
The average PPS salary provides a fairer comparison, as the cost of living, especially housing costs, varies considerably across European countries. PPS is “an artificial currency unit” where a single unit can theoretically buy the same amount of goods and services in each country.
However, significant differences between EU countries still exist. For instance, in nominal terms, the highest average salary was six times higher than the lowest, but adjusted for PPS, the ratio drops to 2.5 times.
The average annual full-time adjusted annual salary per employee, measured in PPS, ranged from 20,525 in Greece to 53,745 in Luxembourg. In nominal terms, Greece ranked third but had the lowest PPS. Only seven countries exceeded the EU average PPS: Luxembourg, Belgium, Denmark, Germany, France, Austria and Ireland.
Eurostat started calculating “average full-time adjusted salaries per employee” after the adoption of the Blue Card Directive in 2021. The indicator serves as a threshold for granting work permits to highly skilled workers at the national level.
