Labour costs in Europe 2026: how the minimum wage in Poland in euro compares with other EU countries

Labour costs in Europe in 2026 remain highly diverse. For companies planning to hire employees, expand operational structures or relocate selected business processes to another country, headline wage levels — including the minimum wage in Poland in euro — are only one part of the decision-making process. The actual cost for an employer also depends on employer-funded social security contributions, non-wage labour costs, working time models and local administrative obligations.

In 2025, the average hourly labour cost amounted to EUR 34.90 in the European Union and EUR 38.20 in the euro area. However, the differences between countries were substantial: from EUR 12.00 per hour in Bulgaria to EUR 56.80 in Luxembourg. This shows that Europe is not a uniform labour cost market, and choosing an employment location requires a broader analysis than simply comparing gross salaries.

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Hourly labour costs in Europe – highest and lowest rates

According to Eurostat data, the highest hourly labour costs in 2025 were recorded in:

• Luxembourg – EUR 56.80,
• Denmark – EUR 51.70,
• the Netherlands – EUR 47.90.

The lowest labour costs were recorded in:

• Bulgaria – EUR 12.00,
• Romania – EUR 13.60,
• Hungary – EUR 15.20.

For employers, this means that the cost of one hour of work in the most expensive EU countries may be more than four times higher than in countries with the lowest labour costs. However, this does not fully answer the question of where employment is most cost-effective. In practice, labour costs should be compared with productivity, employee availability, skills, legal stability and the cost of administrative support.

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Poland compared with the European Union

Poland still has lower labour costs than most Western European countries, but it is no longer among the cheapest labour markets in the European Union. Compared with Germany, the Netherlands, France, Ireland or Denmark, employment costs in Poland remain clearly lower. At the same time, lower hourly labour costs can still be found in some Central, Eastern and South-Eastern European countries.

From an investor’s perspective, Poland is often selected not solely because of low labour costs, but because of a combination of several factors: moderate wage levels, a large labour market, access to specialists, EU membership and a well-developed business services infrastructure.

This is particularly important for companies planning to develop finance, administration, HR and payroll, customer service or shared services centre functions in Poland.

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Non-wage labour costs – a key part of employer calculations

Eurostat divides labour costs into two main components: wages and salaries, and non-wage costs, such as employer-funded social security contributions.

In 2025, the share of non-wage costs in total labour costs amounted to:

• 24.80% in the European Union,
• 25.60% in the euro area.

The highest share of non-wage labour costs was recorded in France, where it reached 32.30% of total labour costs, and in Sweden, where it amounted to 31.70%.

For companies comparing employment locations, this is a significant factor. Two countries may have a similar gross salary level but a very different total employer cost. This is why the statutory minimum wage or average salary alone is not enough to assess the real cost of employment.

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Labour cost growth in Europe

Labour costs in Europe differ not only in level, but also in growth dynamics. Between 2024 and 2025, hourly labour costs increased by 4.10% in the European Union and by 3.80% in the euro area.

The highest increases expressed in euro were recorded in:

• Bulgaria – 13.10%,
• Croatia – 11.60%,
• Slovenia – 9.30%,
• Lithuania – 9.20%.

Among EU countries outside the euro area, analysed in national currencies, the highest increases were recorded in Romania, Hungary and Poland. In Poland, hourly labour costs increased by 8.80% year on year.

This is an important signal for entrepreneurs. Countries with lower labour cost levels often experience faster wage and cost growth. Their cost advantage may therefore gradually decrease, especially where wage pressure and competition for employees are increasing.

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Labour costs by sector

Differences are visible not only between countries, but also between sectors of the economy. In 2025, the highest hourly labour costs in the European Union were recorded in the mainly non-business economy, excluding public administration, where they amounted to EUR 35.50. The lowest were recorded in construction, at EUR 31.50.

In the euro area, the highest costs applied to industry, at EUR 40.30 per hour, while the lowest were recorded in construction, at EUR 34.40.

For businesses, this means that comparing a country as a whole may be too general. Cost analysis will look different for manufacturing, shared services centres, sales teams or administrative teams. Before choosing a location, companies should compare not only the average labour cost in a country, but also the real costs for a specific industry and job category.

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Minimum wage in Europe in 2026

As of 1 January 2026, a national statutory minimum wage applied in 22 of the 27 EU Member States. Denmark, Italy, Austria, Finland and Sweden did not have one nationwide statutory minimum wage. In these countries, wages are largely regulated by collective agreements and sector-level arrangements.

In Poland, these include in particular:

• pension insurance contribution,
• disability pension insurance contribution,
• accident insurance contribution,
• Labour Fund contribution,
• Guaranteed Employee Benefits Fund contribution,
• in certain cases, costs related to Employee Capital Plans (PPK) and additional employee benefits.

In other countries, the structure of employer charges differs. In France, high non-wage labour costs play a major role. In Germany, social security contributions are shared between the employee and the employer. In the United Kingdom, employer National Insurance contributions and workplace pension obligations may also be relevant.

This is why a full labour cost analysis should include wages, contributions, administrative costs and local reporting obligations.

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When Poland can be a cost-effective location for employers

Poland may be a cost-effective location for companies that want to expand within the European Union at lower costs than in Western Europe, while still maintaining access to qualified employees.

This applies in particular to areas such as:

• accounting and finance,
• HR and payroll services,
• administration,
• shared services centres,
• customer support,
• sales support,
• back-office processes.

In such operating models, properly organised payroll, compliance with Polish labour and social security regulations, and efficient handling of employer obligations are particularly important. Companies developing teams in Poland may require support with payroll and HR services in Poland as well as accounting services in Poland.

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What to check before choosing an employment location

A company comparing labour costs in Europe should analyse not only minimum wage rates, but also several additional areas.

Total employer cost

The most important figure is the cost borne by the company, not only the employee’s gross salary. Total employment cost affects project profitability and the ability to scale a team.

Labour cost growth

Countries with lower base costs may experience rapid wage growth. This is particularly visible in Central and Eastern Europe, where labour cost dynamics are often higher than in mature Western European economies.

Structure of non-wage costs

A high share of social security contributions and other employer charges may significantly increase the cost of employment. This is especially important in countries where non-wage costs represent more than one quarter of total labour costs.

Industry and job type

National averages do not always reflect the real cost for a specific employer. Cost levels differ between manufacturing, services, finance, IT and administration.

Administrative obligations

Labour costs also include payroll preparation, reporting, employee documentation, updates to payroll parameters and compliance monitoring. In international structures, this may be as important as the salary level itself.

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Labour costs in Europe 2026 – key takeaways

A comparison of labour costs in Europe shows that differences between countries remain significant. The highest costs are recorded in Luxembourg, Denmark and the Netherlands, while the lowest are found in Bulgaria, Romania and Hungary. At the same time, lower-cost countries often experience faster wage growth, which may gradually reduce their cost advantage.

Poland remains competitive compared with Western Europe, especially for companies developing finance, administration, HR and payroll, and operational functions. However, its position is not based solely on a lower minimum wage. Employee availability, market size, experience in supporting international processes and a developed business services infrastructure are also important.

For employers, the key issue is the full calculation of employment costs. Only by combining wages, contributions, non-wage costs, administrative obligations and skills availability can a company assess which country is genuinely the best fit for its business model.

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FAQ

What is the average hourly labour cost in the European Union?

In 2025, the average hourly labour cost was EUR 34.90 in the European Union and EUR 38.20 in the euro area.

Which countries have the highest labour costs?

The highest hourly labour costs in 2025 were recorded in Luxembourg, Denmark and the Netherlands. Luxembourg also had the highest statutory minimum wage in the EU in 2026.

Which countries have the lowest labour costs?

The lowest hourly labour costs were recorded in Bulgaria, Romania and Hungary. Bulgaria also had the lowest minimum wage in the EU in 2026.

What is the minimum wage in Poland in euro in 2026?

In 2026, the minimum wage in Poland is PLN 4,806 gross per month. In comparative terms, the minimum wage in Poland in euro is approximately EUR 1,139.

Is Poland the cheapest country for employment in the EU?

No. Lower minimum wages and lower hourly labour costs can be found in some Central, Eastern and South-Eastern European countries. However, Poland remains competitive compared with Western Europe and offers a strong cost-to-skills ratio.

Why is comparing the minimum wage not enough?

The minimum wage shows only the gross salary. Employers should also consider social security contributions, non-wage costs, administrative obligations, wage growth dynamics and employee availability in each country.

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