Turkey and Bulgaria report the lowest average annual net incomes of €8,968 and €9,355 respectively.
Differences in average annual net incomes across Europe are striking, with significant differences even when accounting for adjustments.
Average salaries in Europe vary widely, which has a significant impact on hiring and employment decisions. These differences may be due to country-specific regulations, labour laws, industry sectors and economic development. Northern and Western European countries have the highest average net wages, while Eastern and Southern European countries report much lower values.
How do average incomes in Europe compare?
The average annual net salary is calculated by deducting income tax and social security contributions from the gross annual salary and then adding family allowances. Different family situations, such as single or married and number of dependent children, affect net income.
Euronews Business looks at the net income of a single person without children.
According to Eurostat, the EU's official statistical office, Switzerland tops the list with an impressive average annual net salary of €85,582, significantly higher than any other country in the region.
Switzerland is followed by Iceland and Luxembourg, which report average incomes of €53,885 and €49,035 respectively. Norway and the Netherlands also report net incomes above €45,000.
The average net income in the EU is 28,217 euros, which serves as a basis for comparison. Countries such as France (€31,481) and Sweden (€33,926) are slightly above the EU average, while others, including Italy (€24,207) and Spain (€23,568), are below it.
Among the leading economies in Europe, Germany has the highest net income - 38,086 euros. The latest UK figure available 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 disparities that exist even among the richest European countries.
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 at the lower end of the income scale.
Salaries adjusted according to PPP
When wages are adjusted for purchasing power parity (PPP), the landscape changes slightly. PPP is an artificial monetary unit that adjusts for differences in price levels between countries.
Switzerland continues to be in first place with 47,403 PPPs, but the gap with other countries is narrowing. This figure underlines Switzerland's strong economic position and high standard of living, which far surpasses other countries in the region.
After Switzerland, the Netherlands and Norway also demonstrate stable net incomes, with 38,856 and 36,288 PPPs respectively. Luxembourg and Austria round out the top five, reporting over 35,000 PPPs.
These countries, located mostly in Northern and Western Europe, enjoy strong economies, developed infrastructure and favourable labour laws, which contribute to their high incomes.
Lower net incomes in Eastern and Southern Europe
In contrast, Eastern and Southern European countries generally report lower average net incomes by PPP.
In Slovakia, for example, the average annual net salary is the lowest - 14,758 PPS. Turkey (2022), Latvia and Bulgaria also fall at the bottom of the spectrum - each with fewer than 16,000 PPPs.
These figures highlight economic disparities within the continent, influenced by various factors such as economic development, labour market conditions and cost of living.
Among the leading European economies, Germany stands out with a net income of 34,914 PPPs. Although the latest figures for the UK are from 2019, it reports 29,757 PPPs, showing its competitive position within Europe.
Countries such as Belgium, Ireland and Sweden also perform well, with revenues exceeding 30,000 PPP. These statistics reflect the economic stability and higher standard of living in these regions.
All these differences in net income have significant implications for the quality of life, economic stability and social justice in Europe. Policymakers and stakeholders are taking these findings into account in their efforts to address income inequality and promote balanced economic growth across the continent.
Pay transparency in the EU
The EU is promoting pay transparency with new rules adopted on 24 April 2023. These rules require companies to share salary information and address any gender pay gap of more than 5%. Pay transparency helps workers enforce their right to equal pay and aims to close the gender pay gap. | BGNES
