The differences in average annual net income across Europe are striking and show large fluctuations even when adjustments are taken into account.
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Average salaries in Europe vary widely, which has a major impact on employment and job decisions. These differences can arise due to 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 have much lower average net incomes.
How do average incomes across Europe compare?
Average annual net income is calculated by subtracting income tax and social security contributions from annual gross income and adding family benefits. Different family situations, such as whether you are single or married and how many dependent children you have, affect your net income.
Euronews Business looks at the net income of single people without children, but also provides options for different scenarios in the chart below.
Switzerland tops the list with an average annual net income of 85,582 euros, significantly higher than any other country in the region, according to Eurostat, the European Union's official statistics agency.
Following Switzerland, Iceland and Luxembourg had average incomes of €53,885 and €49,035 respectively. Norway and the Netherlands also recorded net incomes of over €45,000.
The average net income within the EU is €28,217, which serves as a benchmark for comparison: countries such as France (€31,481) and Sweden (€33,926) are slightly above the EU average, while countries such as Italy (€24,207) and Spain (€23,568) are below.
Among Europe's major economies, Germany had the highest net profit at €38,086. The latest figures for the UK are from 2019 and so a direct comparison is difficult, but they are indicative of the UK's position, at €35,783.
All these figures highlight the existence of considerable income inequality even among Europe's wealthiest countries.
Meanwhile, countries such as Turkey and Bulgaria have the lowest average annual net incomes at €8,968 and €9,355 respectively.
Eastern European countries such as Romania (11,105 euros), Croatia (12,330 euros) and Hungary (12,456 euros) are also at the lower end of the income scale.
PPS adjusted salary
The situation changes slightly when we adjust for purchasing power standards (PPS), which are artificial monetary units that adjust for differences in price levels between countries.
Switzerland remains the highest with 47,403 PPS, but the gap with other countries is narrowing. This figure underlines Switzerland's strong economic position and high standard of living, which is significantly higher than other countries in the region.
Following Switzerland, the Netherlands and Norway also showed strong net gains with 38,856 PPS and 36,288 PPS respectively. Luxembourg and Austria rounded out the top five with over 35,000 PPS.
These countries, primarily located in Northern and Western Europe, benefit from strong economies, advanced infrastructure and favorable labor laws, contributing to high profits.
Net profits fall in Eastern and Southern Europe
In contrast, Eastern and Southern European countries generally have lower average net profits on a PPS basis.
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For example, Slovakia has the lowest average annual net income at 14,758 PPS. Turkey (2022), Latvia and Bulgaria are also at the lower end of the range, each at less than 16,000 PPS.
These figures highlight economic disparities within the continent, which are influenced by a range of factors including economic development, labour market conditions and the cost of living.
Among Europe's top economies, Germany stands out with a net profit of 34,914 PPS. The UK's latest data is from 2019, but it reported 29,757 PPS, showing its competitiveness within Europe.
Countries such as Belgium, Ireland and Sweden also perform well, with incomes over 30,000 PPS. These statistics reflect the economic stability and high standard of living in these regions.
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The graph above shows that the number of dependent children and marital status significantly affect net income across Europe. Under these different circumstances, the ranking of a particular country will fluctuate, but the overall changes are generally not dramatic.
These disparities in net income have significant implications for quality of life, economic stability and social equality 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 April 24, 2023. These rules require companies to share salary information and address gender pay gaps of more than 5%. Pay transparency helps workers exercise their right to equal pay and aims to close the gender pay gap.
