European Labour Costs Are Rising Fast: The Q1 2026 Numbers

Hourly labour costs across Europe have been rising at a steady pace. According to Eurostat's Labour Cost Index, costs moved upward across both the EU and the euro area in Q1 2026 - with notable differences by sector and country.

For job seekers tracking salary trends across European markets, the numbers offer a useful reference point.

EU and Euro Area: The Headline Figures

In Q1 2026, hourly labour costs rose by 3.6% across the EU and by 3.2% in the euro area, compared with the same quarter of the previous year.

Labour costs are split into two main components: wages and salaries, and non-wage costs such as employer social contributions. In the EU, hourly wages and salaries increased by 3.7% and the non-wage component by 3.2%. In the euro area, hourly wages and salaries rose by 3.4% and non-wage costs by 2.9%.

Eurostat notes that data from Belgium were not available for Q1 2026 at the time of publication, which affects the EU and euro area aggregate figures.

Which Sectors Saw the Fastest Growth

Within the EU, construction recorded the highest hourly labour cost increase in Q1 2026 at 4.2%, followed by the mainly non-business economy - which covers public administration, education, health and related services - at 3.7%. Industry came in at 3.6% and services at 3.4%.

Looking at hourly wage costs specifically, Eurostat recorded the highest annual increases in:

• Mining and quarrying: +5.7%
• Real estate activities: +4.8%
• Construction: +4.4%
• Education: +4.4%

At the lower end, accommodation and food service activities saw hourly wage costs grow by 2.7%, and arts, entertainment and recreation by 2.8%.

For non-wage costs, information and communication recorded an increase of 4.5%, administrative and support service activities 4.4%, and construction 3.8%. Professional, scientific and technical activities and arts, entertainment and recreation both recorded non-wage cost growth of 1.6%.

Country Differences: From 1.3% to 16.4%

The variation across EU member states is wide. In Q1 2026, Hungary recorded the highest annual increase in hourly wage costs for the whole economy at 16.4%, followed by Bulgaria at 13.2% and Croatia at 9.2%.

The smallest increases were in Malta at 1.3%, France at 1.8%, and Denmark and Latvia both at 2.5%.

These figures are calendar adjusted, meaning differences arising from the number of working days in a quarter are corrected for.

How Eurostat Calculates These Figures

The Labour Cost Index measures the short-term development of the cost of employing labour on an hourly basis. It covers the whole economy, defined as NACE Rev. 2 sections B to S, which excludes agriculture, forestry and fishing, and activities of households as employers.

The business economy accounts for about 70% of the labour costs of the whole economy in EU and euro area aggregates. The mainly non-business economy - public administration, education, health, arts and other services - accounts for about 30%.

EU and euro area aggregate data are available from 2008 onwards. New data are released every quarter, about 75 days after the end of the reference quarter.

Find Professional Roles Across Europe

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Source: Eurostat, Labour Cost Index - recent trends, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Labour_cost_index_-_recent_trends