Romania, Second Lowest Level in the EU in Labour Costs Last Year
Romania remained at the second lowest level in the EU in terms of average hourly labour costs for 2025, according to data published by Eurostat. In a context marked by significant gaps between EU countries, the lowest hourly labour costs were recorded in Bulgaria (€12), Romania (€13.6, up from €12.5 in 2024), and Hungary (€15.2), while the highest were observed in Luxembourg (€56.8), Denmark (€51.7), and the Netherlands (€47.9).
Taking into account the time series, we can see that labour costs more than tripled in Romania between 2008 and 2025, rising from €4.2 to €13.6. While the first four euros were added by 2020, the last €5.4 were added in the past five years, and the gap relative to Central European countries has been visibly narrowing.
For example, the ratio to labour costs in Poland increased from 55% to 87%, and the gap with Hungary shrank from €3.6 to €1.6 per hour. This means that Romania’s relative advantage in attracting foreign investment is diminishing rapidly, and other incentives—such as the overall business environment—should be strengthened.
The two main components of labour costs are wages and salaries, and non-wage costs (e.g. employers’ social contributions). The share of non-wage costs in total labour costs for the whole economy was 24.8% in the EU and 25.6% in the euro area. The lowest shares of non-wage costs in the EU were recorded in Romania (4.8%), Lithuania (5.5%), and Malta (5.8%), while the highest were in France (32.3%), Sweden (31.7%), and Slovakia (28.6%).
In 2025, hourly labour costs at the whole economy level, expressed in euros, rose by 4.1% in the EU and by 3.8% in the euro area compared with 2024. Within the euro area, hourly labour costs increased in all countries except Malta (-0.5%). The largest increases were recorded in Bulgaria (+13.1%), Croatia (+11.6%), Slovenia (+9.3%), and Lithuania (+9.2%), whereas the smallest increases were observed in France (+2.0%) and Italy (+3.2%), followed by Spain, Cyprus, and Luxembourg (+3.5% each).
For EU countries outside the euro area, hourly labour costs expressed in national currency increased in all countries, with the largest rises recorded in Romania (+10.6%), Hungary (+8.9%), and Poland (+8.8%). The smallest increase was recorded in Denmark (+3.0%). As can be seen, exchange rate effects had a negative impact on euro-denominated values only in Romania and Hungary.
Average hourly labour costs in industry were €34.7 in the EU and €38.6 in the euro (20) area. In construction, they were €31.5 and €34.4, respectively. In services, hourly labour costs stood at €34.8 in the EU and €37.8 in the euro area. In the mainly non-business economy (excluding public administration), they were €35.5 and €38.7, respectively.
The values recorded for Romania correspond to 36% of the EU average in industry (only €12.6), 38% in construction (€11.9), 40% in the mainly non-business economy (excluding public administration), at €14.2, and 41% in services (€14.3). Therefore, there remains a considerable gap to be closed, which may also represent an important factor contributing to the public deficit, given the limited capacity for fiscal revenue generation.
Photo source: PxHere.com.
