Hourly gross wages and salaries rose from €21.5 in 2020 to €26.2 in 2025 in the EU, reflecting 21.9% growth. However, this does not account for inflation.
Consumer prices for goods and services increased by 25.6% over the same period. As a result, cumulative real wages declined by 3%, meaning households’ purchasing power fell.
So, how have wages and inflation evolved over the past five years across Europe? Which countries are the winners and losers in real terms since 2020?
Among 30 European countries, real wages and salaries declined in 12, while they increased in 18, according to Eurostat data, based on Euronews calculations. The figures are based on gross wages and salaries in national currencies.
Leading countries were outside the euro area
Bulgaria is the clear winner, with real wages rising by 37.4% between 2020 and 2025 in cumulative terms.
In Bulgaria, a law requiring the minimum wage to be at least 50% of the average gross wage came into effect in 2023.
Serbia (25.4%), Croatia (21.1%) and Lithuania (21.1%) also recorded increases of more than 20%.
The top three countries were not part of the euro area in 2020. As some countries joined between 2020 and 2025, the euro area grouping is based on its 2020 composition.
Another three non-euro countries — Romania (19.7%), Hungary (18.8%) and Poland (17.8%) — also recorded real growth of between 15% and 20%.
Within the euro area, Slovenia (14.4%), Latvia (10.6%) and Greece (8.6%) also saw significant increases over the period.
In half of European countries, real wages changed between -5% and 5%, indicating relatively small variations.
All ‘Big Four’ see real wage declines
Within the EU’s top four economies, real wages declined in all. Italy saw the largest drop at 9.2%, followed by Spain at 5.9%. Germany (-3.2%) and France (-3.3%) were slightly below the EU average.
Italy also recorded the highest decline across Europe.
As wages are gross, tax changes can affect the real outcome. Lower taxes may mean higher take-home gains, while higher taxes can reduce them over this period. Take-home ratios largely vary across Europe.
Understanding country differences: The “catch-up” effect
Nominal wage growth needs to exceed inflation to result in a positive real change. However, the level of wages also affects real growth figures. This is known as the “catch-up” effect.
Bulgaria had the lowest hourly wages in 2025, while Hungary and Romania were also among the five lowest.
Economically, it is easier for a country to increase wages from €5.7 in 2020 to €10.5 in 2025, as in Bulgaria, than for a country like Germany to grow from €28.6 to €34.5.
Inflation and nominal growth
Looking at consumer inflation and nominal wage growth in the same chart is another way to assess trends in real terms.
Cumulatively, several countries recorded strong nominal wage growth of over 60% since 2020.
The highest increases were in Bulgaria (84.2%), Hungary (82.7%) and Romania (73.1%). However, inflation was also very high in these countries — 34.1%, 53.7% and 44.6%, respectively.
In contrast, Italy saw the lowest nominal rise at 9.5%, followed by Malta (13.3%) and France (14.1%). Although inflation was below the EU average in these countries, wage growth still did not keep pace with it.
Which countries pay the most and least?
While real changes in wages are important, the level also matters, as hourly wages vary widely across these 30 countries.
As of 2025, Bulgaria has the lowest wage at €10.5 while Luxembourg has the highest at €49.7.
This means that although Bulgaria is closing the gap, a significant difference in wage levels remains between the two countries.
In general, wages are highest in Northern and Western Europe and lowest in Eastern Europe as the chart above shows.
Even among the EU’s largest economies, the wage gap is striking. As of 2025, Germany (€34.5) offers the highest gross hourly wages, while Spain (€19.5) has the lowest.
