In 2025, companies in Germany’s manufacturing and service sectors paid an average of 45.00 euros for an hour of labor. According to data released by the Federal Statistical Office (Destatis), German employers paid nearly 29 percent more per hour in 2025 compared to the general European Union (EU) average of 34.90 euros. Looking at the year-on-year change, labor costs in Germany increased by 3.6 percent (up from 43.50 euros each hour in 2024). This rise was slightly less dramatic than the EU-wide average increase of 4.1 percent. Notably, the current EU average does not incorporate data for Belgium due to the absence of results for that country.
Labor costs vary significantly across the EU. Based on currently available results for 2025, the highest labor costs were recorded in Luxembourg (56.80 euros), followed by Denmark (51.70 euros) and the Netherlands (47.90 euros). However, last year, before the results for 2025 were known, Belgium had ranked third, displacing the Netherlands from that position. Conversely, the countries with the lowest labor costs across the EU in 2025 were Hungary (15.20 euros), Romania (13.60 euros), and Bulgaria (12.00 euros).
In terms of percentage growth, Bulgaria (+13.1 percent), Croatia (+11.6 percent), and Poland (+10.5 percent) saw the sharpest increases in labor costs in 2025. Meanwhile, France (+2.0 percent), Denmark (+3.0 percent), and Italy (+3.2 percent) registered the weakest increases. Malta saw a slight decrease in costs compared to the previous year, falling by 0.5 percent.
Looking back to 2020, labor costs in Germany have increased by at least 14 percent across all economic sectors. Specific areas, such as professional, scientific, and technical services, general economic services, and the hospitality industry, saw cost increases exceeding 30 percent. Overall, the total average increase over the five-year period was 22.3 percent. Despite these significant increases, the situation in 2025 remained relatively stable compared to 2020, especially when measured against the EU average: German labor costs stood at approximately 30 percent (in 2020) and 29 percent (in 2025), positioning them closely aligned with the EU average.
