Analytics, EU – Baltic States, Financial Services, Markets and Companies, Taxation

According to Eurostat, last year, the average labour cost in companies with ten or more employees (with the exception of agriculture, forestry and fishing, public administration and defence), was in the European Union 29.2 euros and in the euro area 24.6 euros per hour.

In Estonia, the corresponding figure was 9.8 euros per hour, which is 2.5 times smaller than the EU average.

In comparison with the neighbouring countries, the employer's labour costs per hour were 1.5 times higher than in Latvia and Lithuania, but three times lower than in Finland.

In 2004-2008, the employer's labour costs in Estonia rose faster than the EU average. For example, in 2007, hourly labour costs rose year-on-year by nearly 20%, followed by a few years of recession, but since 2011, labour costs have once again shown rapid growth.

In 2014 compared to 2013, Estonia posted the fastest growth in labour costs per hour in the euro area, reaching 6.6%.

In Estonian labour costs, 73.3% are direct costs and indirect costs formed 26.7%.

In the business sector, employers paid on 100 euros of gross wages also an additional 36 euros of indirect costs in Estonia last year (EU average 32 euros).