Average annual wages

Average annual wages measure the average yearly wage paid per dependent employee in the total economy, adjusted to a full-time equivalent basis.

Average annual wages are calculated using the total wage bill from national accounts, divided by the average number of employees in the total economy.

The result is adjusted to a full-time equivalent basis using the ration between usual weekly hours worked by full-time employees and usual weekly hours worked by all employees.

This makes wage levels more comparable across countries, especially where usual working hours differ across the workforce.

The indicator is shown in constant US dollars to support comparisons across countries and over time.

Purchasing power parities for private consumption are used to account for differences in price levels between countries. Values are also adjusted for changes in prices over time using the price deflator for private final consumption expenditure.

Results are shown in 2024 prices.

Average annual wages can be used to compare average wage levels across countries and track changes over time. 

Key limitation

Because this indicator is an average, it does not show how wages are distributed across workers. Increases in average wages may not reflect the experience of all workers, particularly if wage growth is concentrated among higher earners.

Not included

This indicator should not be interpreted as median wages, household income or disposable income.

This indicator is commonly used to:

• Compare average wage levels across countries
• Track changes in average wages over time
• Analyse wage developments as part of broader labour market analysis
• Support economic and social policy analysis

It is often used alongside:

• Median wages
• Labour productivity
• Income inequality indicators (e.g. Gini coefficient)
• Cost of living and price level indicators
• Tax and benefit indicators

Average wages are calculated by dividing total wages by the number of employees. Median wages represent the wage level of the middle worker, where half of workers earn more and half earn less.

Because average wages can be influenced by very high or very low wages, they may increase even when wages for many workers change little. Average wages are useful for comparing overall wage levels, while median wages are useful for understanding the earnings of the middle worker. Used together, they provide a fuller picture of wage levels and wage distribution.

This indicator is based on wages before personal income taxes and employee social contributions are deducted. It should not be interpreted as disposable income or take-home pay.

The amount workers keep after taxes and transfers depends on each country’s tax-benefit system and on household characteristics in each country.

Purchasing power parities adjust for differences in price levels across countries. This helps compare wages in terms of what they can buy, rather than simply converting them at market exchange rates.

Using PPPs makes international wage comparisons more meaningful, because the same amount of money can have different purchasing power in different countries.

Yes. The indicator includes both full-time and part-time employees in the total economy.

The result is adjusted to a full-time equivalent basis using usual weekly hours worked by full-time employees and by all employees. This improves comparability across countries where working-time patterns differ.

Only partly. Average annual wages are an important measure of labour earnings, but they do not show how much income workers or households have after taxes and transfers, or how far that income goes in each country.

Living standards also depend on prices, household composition, income distribution, public services and other sources of income.