[Spain] Labour costs rise 18.5% more than gross salaries over five-year period

In Spain, increasing contributions have led to labour costs rising by 18.5 per cent more than gross salaries over a five-year period, The Corner reports.

For an average salary of €26,555 gross per year, the associated additional labour cost would be €9,340; totalling €35,900 by the end of 2023. In 2018 - before the labour costs surge - businesses paid €30,880 in labour charges for a gross payroll of €23,000. While the country’s gross salary has increased by just over €3,500, total charges have reportedly risen by €5,900. 

Labour costs include an employee’s gross payroll plus non-salary charges that the company must pay primarily in social security contributions. Even after accounting for deductions and subsidies, labour costs have reportedly increased by almost 20 per cent more than employees’ gross salaries over the last five years; with a particularly intense post-pandemic rise. The rise in contributions accounts for an increased burden on companies with an average salary now costing between €1,300 and €1,500 more per year in labour costs than it did in 2018.

Increases in contributions through bases and the creation of new fees that raise the amount payable to the pension fund further distort the cost per worker. Construction and industry reportedly saw the most contained percentage increase in costs (at around 15 per cent each) between 2018 and 2023, according to calculations based on data from the Annual Labour Cost Survey conducted by the National Institute of Statistics.

Source: The Corner

In Spain, increasing contributions have led to labour costs rising by 18.5 per cent more than gross salaries over a five-year period, The Corner reports.

For an average salary of €26,555 gross per year, the associated additional labour cost would be €9,340; totalling €35,900 by the end of 2023. In 2018 - before the labour costs surge - businesses paid €30,880 in labour charges for a gross payroll of €23,000. While the country’s gross salary has increased by just over €3,500, total charges have reportedly risen by €5,900. 

Labour costs include an employee’s gross payroll plus non-salary charges that the company must pay primarily in social security contributions. Even after accounting for deductions and subsidies, labour costs have reportedly increased by almost 20 per cent more than employees’ gross salaries over the last five years; with a particularly intense post-pandemic rise. The rise in contributions accounts for an increased burden on companies with an average salary now costing between €1,300 and €1,500 more per year in labour costs than it did in 2018.

Increases in contributions through bases and the creation of new fees that raise the amount payable to the pension fund further distort the cost per worker. Construction and industry reportedly saw the most contained percentage increase in costs (at around 15 per cent each) between 2018 and 2023, according to calculations based on data from the Annual Labour Cost Survey conducted by the National Institute of Statistics.

Source: The Corner