sponsored with funds of the European Union
Wages and Labour Costs
The wage differences within Europe are enormous. Wages range from about one Euro up to more than 14 Euros in Denmark. There are also major differences in the level of contributions to welfare insurance schemes. They depend on the financing system of the respective countries. In central European countries the deductions from the worker's wages are lower than 10 %, whereas the employer's contributions are well over 20 % or even higher than 30 %.
While the associations negotiate collective agreements in the "old" European countries (EU 15) collective agreements are still concluded at the company level in the new member states. Nation-wide collective agreements are only gaining ground in a number of countries, e. g. in Czechia and Slovenia. In the other countries such as Poland, the Baltic states, etc., most agreements are concluded at the company level.
Between 50 % and 100 % of the employees enjoy the negotiated agreements regardless of whether they or their employers are members of the associations. In certain countries the collective agreements are generally binding for the whole industry (Austria), in others they are even made the legal standard through decrees (Netherlands).
In the central European countries, where the focus of negotiations is at the company level, the agreed wage is usually only paid to the employees of the according company. All other cases are governed by the provisions of individual work contracts or by the statutory minimum standards.
The Situation in International Comparison:
International Comparison: Wages and Labour Costs
The Situation in Individual European Countries:
AT: Austria
In Austrian agriculture collective agreements are concluded at the national and federal state levels (forestry, horticulture and agriculture) between trade union and employers' organisations. Collective agreements at the company level are also possible. Usually the collective agreements are made for a term of one year.
Worker's wage: € 6.85 hour (17.2 % welfare insurance contributions payable by the employee, 20.6 % welfare insurance contributions payable by the employer)
Besides the welfare insurance contributions another 0.75 % are deducted from the worker's wage for the agricultural workers' chamber, and employers pay another 1.53 % to a scheme providing for their staff.
The income tax level is 24.18 % of the worker's gross wage.
The Agricultural Work Act is the law governing the principles. At the next level there are nine different Agricultural Work Ordinances governing the implementation and laying down a number of special provisions. The collective agreement legislation applies to all workers in an industry, thus the collective agreements actually cover all employees. The collective agreements are kept by 100 % of the companies. (There are national and state level agreements).
An additional monthly wage is paid as Christmas benefit and holiday benefit.
BE: Belgium
Collective agreements are negotiated by the trade unions and the employer associations. In agriculture there are 10 collective agreements at the national level. The collective agreement is confirmed by a royal decree. Agricultural employees in Belgium are organised in the trade unions ACV, ABVV and ACCVB.
The collective agreements apply to all employees and employers.
The hourly wage is € 9.93. Employees pay 15.3 % and employers 55.0 % of the wage as welfare insurance contributions.
The income tax rate is 22 %.
A year-end premium of 6 % of the gross wage is paid to the worker.
All employees and employers are bound by the collective agreement.
BG: Bulgaria
The gross wage of employees is € 0.69. Employees pay 35 % for welfare insurance, employers pay 65 % of the wage as welfare insurance contributions.
The minimum wage is € 90 per month, and 50 % of the employees earn the minimum wage.
In 125 companies there are collective agreements, 5,000 employees earn the collectively agreed wage.
CH: Switzerland
In Switzerland there is no uniform framework for agriculture because agriculture is not covered by the labour law. Every canton has its own rules, which may vary a lot. Wages also differ very much between cantons. There is an agreement on wage guidelines for non-family members as workers in Swiss agriculture which the Swiss Farmers' Association and the Swiss Association of Professional Bodies of Agricultural Workers have concluded. However, this guideline is not binding! Wages may be lower, and partly they are. According to the guideline employees working independently with less than 5 years of experience earn between CHF 3,400 and 4,150 (about € 2,056 - 2,510). The minimum wage for employees from the new EU member countries is CHF 3,020. For the comparison in the Table we have assumed CHF 3,400 for a 55-hour week. That is equivalent to an hourly wage of CHF 14.23 (€ 8.61).
Employees pay about 15 % of their wage as welfare insurance contributions (state pension scheme/disability insurance/unemployment/accident/health insurance/daily sickness allowance, etc.) as well as 1-10 %, depending on their age, for a private pension scheme (obligatory).
For accommodation they have to pay CHF 345 (€ 209) per month, for food CHF 645 (€ 390) per month.
Employers have to pay about 16 % + 1-10 %, depending on age, as welfare insurance contribution for the private pension scheme for their workers.
Income tax depends on the income level, on the marital status (married or single) and on the number of children (0 % - 15 %). The tax rates vary depending on the canton.
CY: Cyprus
The wage in agriculture in Cyprus is € 4.20. Employees pay 12.5 % thereof into the social security system, another 12.5 % are paid by the employer. For qualification of employees the employer pays 0.5 % to a training fund.
Employment of workers from non-EU countries is governed by intergovernmental regulations. Workers from non-EU countries earn lower wages.
CZ: Czech Republic
The trade union OSPZV-ASO concludes collective agreements in agriculture. There are two sector-related collective agreements, one with the association of former state farms, and one with the association of co-operatives. The agreements are identical because the employers' associations harmonise their approach. In addition there are 320 agreements at the company level.
In cases where several trade unions can be active in one company the unions have to agree between themselves how to reach collective agreements.
The industry collective agreements lay down 12 wage levels with hourly and monthly rates as minimum standards. Level 1 payment is the statutory minimum wage (49 CZK and 8,000 CZK, respectively). Level 12 payment is a little higher than the average income in the national economy (21,300 CZK). The average wage in agriculture is 17,109 CZK.
The collective agreements lay down the wage levels, bonuses for overtime, for holiday work (100 %), for work in difficult environments (10 %), for night time work (50 %), for work on Saturdays and Sundays (50 %) and for work in divided shifts.
In-company collective agreements can lay down extra payments and further welfare benefits (company meals, additional pension). Frequently a welfare fund is used to cover social needs of the workers. The industry collective agreement is the minimum standard.
Companies that are not members in associations have to conclude separate collective agreements. In small companies there is hardly any trade union representation.
All in all 50 % of the employees are covered by collective agreements. 40 % of the employees earn the minimum wage.
Deductions from the worker's wage include 8 % for contributions to the welfare insurance (thereof 6.5 % for pension insurance, 1.1 % health insurance and 0.4 % for state employment policy) and another 4.5 % for the health insurance.
The employer pays from the wage: 26 % welfare insurance (thereof 21.5 % pension insurance, 3.3 % health insurance and 1.2 % for employment policy) and 9 % for the health insurance.
The minimum income tax rate is 15 %.
50 % of the employees are covered by collective agreements.
DE: Germany
In Germany the two sides of industry negotiate collective agreements autonomously. In agriculture, horticulture, and in private forestry there are general collective agreements negotiated for individual regions. In agriculture collective negotiations at the national level before any regional negotiations set up a national recommendation which is then implemented in the regions. The collective agreement guideline in agriculture is the national recommendation. In horticulture the union, IG BAU, uses the result of negotiations in the state of North Rhine-Westphalia as a guideline. The chart shows the calculated average wage in agriculture.
The development in agriculture in recent years was characterised by business recession. The agreed annual wage increase was merely about 1.6 % (from May 1, 2002 through Dec. 31, 2007). A problem for IG BAU are the low wage groups, which also include the seasonal workers. There are regional differences, e. g. in agriculture: from € 4.46 per hour in Saxony to € 6.39 per hour in Mecklenburg-Western Pommerania.
Depending on a worker's marital status and number of children about 10 % of income tax have to paid from the wage.
Since 2005 the companies have been obliged to pay about 40 % of the wage as contributions to the Polish welfare insurance for seasonal workers from Poland. IG BAU assumes that 40-50 % of the companies abide by the collective agreements and that about 60,000 employees (in agriculture) are paid in line with collective agreements. Companies covered by the collective agreements (members of employers' associations) mainly abide by the collective agreements.
DK: Denmark
In Denmark the employers' association and the trade union negotiate one collective agreement for each industry for the whole country (one collective agreement for agriculture, one collective agreement for horticulture). The hourly wage is higher than the EU average, but the state deducts a very high percentage depending on the income level. The contributions to the state are used for financing the social security systems. The income tax rate varies from 8 % (minimum rate) to 63 % (maximum).
One third of the companies (the larger ones) abide by the collective agreements. A total of 20,000 workers are covered by the collective agreement. One third of the companies have no employees, another third are small farmers, and one third have more than 10 employees. That is where the union is strong. In Denmark there is only one collective agreement for agriculture.
Seasonal workers have to be paid under the same rules that apply to their Danish colleagues!
The employer pays 6.75 % of the gross wage into the holiday fund and € 1 into the training fund. This fund is used for financing further training measures including any required continued wage payment.
EE: Estonia
A law from 1992 says that collective agreements can only be concluded in companies with approved/registered statutes.
Companies must accept collective agreements concluded between associations (trade union and entrepreneur association). Employers are well organised in Estonia, but they do not negotiate collective agreements.
The wage in agriculture is estimated at EEK 2,000, which is equivalent to € 1.59.
8.33 % are deducted from the employee's wage for welfare insurance contributions. The employer pays 33.5 % to the social fund (20 % pension insurance, 13 % health insurance, and 0.5 % unemployment insurance).
The income tax rate is 23 %.
ES: Spain
The monthly income is € 700, the annual income is € 8,400. Deductions from the worker's wage are 11 % paid into the welfare funds for financing unemployment insurance, education and training and an insolvency insurance.
Employers pay 15.5 % of the wage as welfare insurance contributions. The minimum income tax rate is 2 %. For agricultural workers the statutory minimum wage is the actual wage.
When collective agreements are concluded they are generally binding, so 100 % of the workers get these wages.
FI: Finland
Collective agreements for individual industries are concluded at the national level. There are five collective agreements applying to agriculture.
Wages are between € 1,200 and € 1,600 per month, the average in agriculture is € 1,260. Workers pay 6 %, and employers pay 35 % of the wage as welfare insurance contributions. Depending on the wage level the tax rate varies between 15 and 30 %.
A number of collective agreements include provisions for seasonal workers.
Companies mainly abide by the existing collective agreements (85 %). Any worker employed in the industry is entitled to the collectively agreed wage, so 100 % of the workers are covered by the collective agreements.
FR: France
In France there are 25 collective agreements at the national level, 76 at the regional level and another 161 at the local/company level.
The minimum wage in agriculture is € 8.27 per hour. Deductions for welfare insurance and additional pension schemes include 25.5 % of the wage payable by the worker and 43.15 % of the wage payable by the employer. The minimum income tax level is 15 %.
The majority of the agricultural workers earn the statutory minimum wage. Seasonal workers may get additional payments up to 1.5 times the minimum wage.
All employees are covered by the collective agreement (98 %), only 2 % (leading employees) have individual agreements.
GB: United Kingdom
In the United Kingdom the Agriculture Wages Board (AWB) negotiates and decides every year on the minimum wage and the working conditions. The AWB is made up of eight members of TGWU (trade union), eight employer representatives, and five independent members nominated by the government. There are three AWBs: one for England and Wales, one for Scotland and one for Northern Ireland.
The average wage in agriculture is € 8.60. Employees play 11.5 %, and employers pay 12.80 % of the wage as welfare insurance contributions.
The minimum tax rate is 10 %, the basic tax rate 22 %, and the maximum income tax rate is 44 %. The rate depends on the income level.
GR: Greece
The wage in agriculture is € 3.80 per hour. Employees pay 16.6 %, employers pay 10 % of the wage as welfare insurance contributions.
The income tax level depends on the income and on the family status.
HR: Croatia
Wages are negotiated at the company level. The average wage in agriculture is € 2.82 per hour.
Employees pay a total of 19.5 % as welfare insurance contributions, thereof 14.5 % to the national pension fund and 5 % to a personal account in the pension fund for individual provision for old age.
Employers pay 17.5 % of the wage for worker welfare insurance: Contributions to the health insurance (15 %), unemployment insurance (1.7 %) and work accident insurance (0.5 %).
HU: Hungary
Compared with other industries in the country the wages in agriculture are amongst the lowest. In 2006 the gross wage was HUF 111,978 (= € 458) per month, i. e. 65 % of the national average, and the net wage was HUF 82,110 per month, or 74 % of the average. In addition there is a wage level gradient, i. e. a negative influence of regional unemployment and of the regional wage level.
Deductions from the wage (employee):
- - pension insurance: 8.5 %
- - welfare insurance: 7.0 %
- - employer contribution: 1.5 %
- - income tax up to HUF 1.700.000 per year: 18.00 %; above that: 36,0 %
Contributions of the employer:
- - pension insurance: 21.0 %
- - welfare insurance: 8.0 %
- - health insurance: HUF 1,950 per month per person
- - training contribution: 1.5 %
- - employer contribution: 3.0 %
There are collective agreements in about 20 % of the agricultural companies. They apply to about 50,000 persons, which is a reach of about 50 % of the total number of employees.
IE: Ireland
The hourly wage is € 8.50. Employees pay 12 %, and employers pay 0 % of the wage as welfare insurance contributions.
There are two tax rates depending on the personal situation. Married persons pay 20 %, unmarried persons pay 42 %.
IS: Iceland
There is a national collective agreement for the industry. The hourly wage is € 7.00. All collective agreements are generally binding.
Contributions to welfare insurance amount to 13.0 %. The work and safety fund receives 1.0 %, the pension fund 4.0 % from the employee's wage and 8.0 % from the employer.
The income tax level is 30-32 % of the gross wage.
IT: Italy
In Italian agriculture there has been a new structure of collective agreements since 1995. There are 8 national agreements for certain industries, (e. g. horticulture), 15 regional agreements and 100 agreements at the province level. The trade unions (FLAI-CGIL, FAI-CISL, UILA-UIL) jointly negotiate with the employers' associations. The basic content and minimum standards are established at the national level (national labour collective agreement - CCNL). At the province level better arrangements are possible. In a number of companies there are also company agreements. If several trade unions are represented in a company the unions have to agree on their demands and agreements.
The national collective agreement makes a distinction between three groups (normal, qualified, and specialised employees). Agreements at the province level may go into further detail about this.
The average wage is € 7.34 per hour.
Employee's contribution
- - pension insurance: 8.54 %
Employer's contribution
- - pension insurance: 26.2 %
- - health insurance: 0.683 %
- - accident insurance: 13.24 %
- - unemployment insurance: 2.41 %
- - integration fund 1.50 %
- - guarantee fund: 0.20 %
- Total: 43.23 %
In disadvantaged areas the employers can get wage subsidies. They get a refund of 32 % of the wage. Income tax: a percentage depending on the wage level, approx. 27 %.
The collective agreements are kept by 100 % of the companies.
LT: Lithuania
In Lithuania collective agreements may be concluded at all levels between trade unions, employers' associations and companies. The Labour Code defines who may enter into agreements with whom. The umbrella organisations of the sector trade unions conclude collective agreements with the employers. In agriculture there is an agreement at the national level. However, the employers do not ensure compliance with the agreement.
The average monthly wage in agriculture is LIT 800 (about € 230), i. e. 3.57 LIT / 1.03 €/h. The average monthly wage in the national economy is LIT 1,600 (€ 460).
The welfare insurance contribution of the employee is 3 % (thereof 80 % for pension insurance). The employer's welfare insurance contribution for the employee is 31 %. Part of the wage is tax-free, the rest is subject to 27 % of income tax. The tax-free share depends on the income level, number of children and marital status. Wage is only paid for the hours actually worked. Time without work, e. g. due to bad weather or public holidays, is not paid.
17 % of the workers are covered by collective agreements.
LU: Luxembourg
The employees covered by the collective agreement earn an average hourly wage of € 2.40. The breakdown of the welfare insurance payments for the workers is as follows:
Blue-collar workers pay 14.45 %, and white-collar workers pay 12.25 % of their wage, and
employers pay 14.45 % of the wage for blue-collar workers and 12.25 % for white-collar workers for welfare insurance.
The percentage of contributions to the accident insurance to be paid by the employer varies. It depends on the number of accidents.
There is no general percentage for the income tax rate. Income tax is calculated on the basis of the marital status and the income level. Example: A single worker with a relatively high income pays about 12 % of tax. A married worker with two children pays almost no tax at all.
In Luxembourg there is an index according to which all wages are increased regularly (in general by 2.5 %).
Seasonal workers as well as migrant workers are covered by Luxembourg's labour law and by existing collective agreements in the companies.
There is no company known not to observe the collective agreement. 1,980 out of the total number of 3,641 worker in this sector are covered by collective agreements.
LV: Latvia
In Latvia company trade unions conclude collective agreements with agricultural entrepreneurs. Although there is no legal basis for it there are only very few agreements. Every year a summary of the agreements that were concluded is made. Agreements at the national or regional level may also be concluded. At the national level 60 % of the companies have to be prepared to do so, but they refuse.
More than two thirds of the employees work for the statutory minimum wage, which is € 170. 9 % are deducted from the employee's wage, and the employer has to pay 24.09 % of the employee's wage as welfare insurance contribution for the employee. The income tax level is 25 %. A minimum of € 70 is tax exempt.
MT: Malta
The hourly wage in agriculture is € 3.47. Employees pay 10 %, employers pay 10 % as welfare insurance contributions.
The income tax rate varies between 15 and 35 % depending on the income level.
NL: Netherlands
There are national collective agreements. Mainly for agriculture/livestock management, horticulture in greenhouses, outdoor horticulture, agricultural contracting, plus about 30 smaller collective agreements.
Seasonal workers are paid € 9.23/h in their first year and € 9.60/h in the second year. Temporary workers get the statutory minimum wage of € 1,300 in the first year and 1.017 % more in the second year. Youths, pupils and students get the statutory minimum wage when they are 22 years old. When they are younger, e. g. 15 years old: 40 % of the minimum wage, and at 21 years 90 % of the minimum wage (annual increments).
80 % of the companies comply with collective agreements, 50 % of the workers are covered by collective agreements.
NO: Norway
The minimum wage in agriculture is € 13.00 per hour, but it is not always paid. Breakdown of welfare insurance contributions: employee 0.0 %, employer 16.0 %, income tax 13.0 % (plus 1.0 % for the Green Sector).
PL: Poland
In agriculture no collective agreements for the whole country have been concluded so far. In 47 % of rural companies there are company collective agreements, in 33 % there are wage regulations (for companies with more that 20 workers). In other companies wages are negotiated between employers and employees in an employment contract.
Wages in agriculture range from € 243.65 to € 643,87 per month.
The statutory minimum wage is € 243.65 (936.00 PLN).
About 30 % of the workers, mainly in small agricultural companies, earn the statutory minimum wage.
Welfare insurance
Employers are obliged to insure their employees in the national welfare insurance (ZUS), which is a body of the Ministry of Labour and Social Policy. The employer is obliged to deduct an amount from the monthly wage of the employees and to additionally pay the contributions for every employee as follows:
Contribution from employee wage
- - old age insurance: 9,76 %
- - pension insurance: 6,50 %
- - medical insurance: 2,45 %
- - health insurance: 9,0 %
- total: 27,71 %
Employer's contribution for every employee
- - labour fund: 1,18 %
- - old age insurance: 9,76 %
- - pension insurance: 6,50 %
- - accident insurance: 2,45 %
- total: 19,89 %
The minimum income tax rate is 19 %, for higher wages it is 30 - 40 %.
For any taxation rate the tax is reduced by 7.75 % for the contributions paid to the health insurance scheme.
PT: Portugal
There is a collective agreement for agriculture which is published by the Ministry in the Boletin do Trabalho e Emprego, so it can be called generally binding for the regions. A tractor driver earns, e. g. € 455.00 per month, which can increase in the first year by € 110.60 up to € 565.60 (€ 7.90 x 14 = € 110.60). That is equivalent to an hourly wage of € 2.59 or € 3.21, respectively. In the second year the wage can increase by another € 110.60 (2 x 7.90 x 14 = € 221.20). The minimum wage is € 390.00, i. e. € 2.22 per hour. If contributions to the welfare insurance are paid the worker pays 11.0 %, and the entrepreneur pays 23.0 % from the wage. The income tax level is about 7 %.
RO: Romania
The average wage in agriculture is LEI 28,000 per month, which is equivalent to € 2.15 per hour.
Employees pay 9.5 % of their wage for welfare insurance. Employers pay 19.75 % of the wage for their workers' welfare insurance plus 17.75 % for other contributions.
The income tax rate is 16 %.
75 % of the companies pay in accordance with agreements, 75,000 employees earn the agreed wage.
SE: Sweden
The wage in Swedish agriculture is € 1,300 - 2,300 per month. 2-3 % are deducted from the worker's wage for welfare insurance contributions. Employers have to pay 35 % for the employees. The income tax rate is 35 %.
8 % of the employees are paid the collectively agreed minimum wage (€ 1,300 / Skr 14,600).
All companies are members of the Swedish employers' association. Trade union members are paid the collectively agreed wage, 60 % of the companies are covered by a collective agreement. A company covered by a collective agreements also pays the agreed wage. 90 % of all employees are covered by the collective agreement. The main problems in implementing collective agreements are in horse farms.
SI: Slovenia
Collective agreements are concluded for industry sectors, so there is one for agriculture. The hourly wage is € 4.84. An employee pays 22.1 % of the wage for welfare insurance contributions, an employer pays 16.1 %.
There are several special bonus payments, e. g. € 460.00 after 10 years of work, € 689.00 after 20 years of work, € 919.00 after 30 years of work, and € 2,754.00 on retirement.
Further special payments include € 605.00 as additional holiday benefit and a 13th monthly wage as a profit-sharing bonus. The latter is re-negotiated at the company level every year.
The income tax level is 0 % up to € 688.00; 2.3 % up to € 1,669.00; 4.7 % up to € 3,129.00, and 8.9 % from € 3,129.00 on.
The collective agreement applies to all agricultural companies, and 30-40 % of the companies have additional corporate collective agreements with better conditions (mainly regarding wages). Out of 3,708 employees only 151 are not covered by the collective agreement, and they earn the statutory minimum wage. Management staff negotiate their own separate contracts.
SK: Slovakia
Payment is governed by a collective agreement or an employment contract. There is a nation-wide collective agreement for agriculture. The trade union concludes collective agreements in 165 companies. The nation-wide collective agreement may include a provision on the minimum wage level.
The average wage in agriculture is € 2.46. Employees pay 13.4 % of their wage as welfare insurance contributions and 0.6 - 1 % as additional contributions. Employers pay 35.2 % of welfare insurance contributions for their employees. The income tax rate is 19.0 %.
67 % of the companies comply with the collective agreements, 63 % of the workers are covered by collective agreements.
TR: Turkey
The overwhelming number of the employees earn the minimum wage. Employees with higher qualification are paid under individual contracts. Employees pay 14 % of their wage as contributions to the welfare insurance, employers pay 20 % of the wage as welfare insurance contributions.
Another 1 % + 2 % are paid for unemployment insurance.
35,000 employees earn wages acc. to collective agreement.