A new survey by Deloitte shows a wide divergence in remuneration levels and social security costs in 19 of the 25 EU member states. In particular, the survey highlights a wide gap in the remuneration levels of the new member states and the old original 15 members prior to the expansion of the EU last May. 

According to the survey, the Slovak Republic has the lowest remuneration costs at just under €6,500.  Poland and Estonia are not far behind with remuneration levels of €7,125 and €7,423 respectively.  Ireland is ranked 11th out of the 19 countries surveyed with an average remuneration cost of €33,668. 

However, the relative positions of the countries changes when one compares the employee tax and insurance costs as a proportion of the total remuneration paid.  In this scenario Ireland has come in second behind Cyprus - which justifies listing Ireland as a low tax jurisdiction for employees.

Also, when one compares the employer social insurance costs as a percentage of remuneration, Ireland is in fifth position behind Denmark, Cyprus, Malta and the UK. 

When you compare the combined costs of tax and employee and employer social insurance costs with the total cost of employment, Ireland comes in a clear second behind Cyprus with Malta and Luxembourg being third and fourth respectively.

Commenting on the results of the survey, Padraig Cronin, tax partner with Deloitte, stated: “While the relative employee and employer costs associated with employment are of interest, it is the overall level of remuneration paid in Ireland relative to our eastern neighbours which is of more significance.” 

He added: “When you consider that Poland, for example, has remuneration levels of less than 20% of ours, jobs that were originally destined for Ireland prior to the enlargement of the EU might now go to Poland, which is centrally located in Europe.  It only goes to emphasise the importance of Ireland trying to control remuneration costs and seek to further enhance productivity levels so that we can give value to businesses for the higher levels of remuneration paid”.

Survey Results

* In completing the survey the remuneration levels for enterprises with 10 or more employees was taken as the benchmark. Employee tax is based on a married couple, one earner with two children.

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Notes to Editors

About Deloitte

Deloitte, one of Ireland’s leading professional services firms, provides audit, tax, consulting and financial advisory services through nearly 800 people in Dublin, Cork and Limerick. Known as an employer of choice for its innovative human resources programmes, the firm is dedicated to helping its clients and its people excel. “Deloitte” refers to Deloitte & Touche and any associated partnerships and companies established under the laws of Ireland.  Deloitte is the Irish member firm of Deloitte Touche Tohmatsu.