By Aoibhinn Mc Bride
There’s a long-held assumption that those working in the Land of the Free, particularly in big cities such as New York or San Francisco, earn more than their European counterparts, particularly in the tech sector.
Take prompt engineers as the perfect example. In the last year, those with the skills and ability to train AI models have average salaries of around $300,000.
Those in Europe are making significantly less, ranging from €40,000 in Germany and the Netherlands to €100,000 in Switzerland.
However, with the average US salary now standing at $59,228 (over €54,000), in more than a dozen European countries, including Switzerland, Iceland, Luxembourg, Norway, Belgium, Austria, Germany, the Netherlands, Denmark, Finland, Sweden, Ireland and France, are surpassing their American counterparts when it comes to take-home pay.
According to the most recent figures provided by Eurostat, wages across the EU and euro areas, increased by 4 per cent and 4 per cent respectively.
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Data compiled by Eurostat has found that in 2022, workers in Switzerland were the highest paid, with the average annual wage standing at €106,839.33.
Salaries in Switzerland are higher for several reasons. For starters, it has lower taxes than the rest of Europe, with workers paying 18.6 per cent income tax on average compared to the OECD average of 24.9 per cent, meaning take-home pay is higher.
In other words, Swiss taxpayers take home 81 per cent of their gross wage compared to the OECD average of 75 per cent. It gets even better for those with children—the average married worker with two children pays as little as 6 per cent thanks to child-related benefits and tax provisions compared to the OECD average of 14 per cent.
Switzerland also has a robust financial sector—total deposits in Swiss banks were reported at just over $2 billion (€1.8 billion) in March—and the demand for skilled finance professionals is high. As such, the average worker can make over €100,000.
Iceland
Despite the 2008 financial crisis, which saw three of the country’s major privately owned commercial banks collapse, unemployment soar and the currency value plummeting, workers in Iceland now command some of the highest salaries in Europe.
Iceland’s average salary is €81,942, according to Eurostat. This is largely thanks to Iceland’s 2019 labour agreements, which have contributed to adjusting salaries in line with inflation.
Luxembourg
The concept of paying people a living wage isn’t new. Luxembourg’s minimum social wage is reviewed every two years, resulting in wage standards being in a near-constant state of review in line with high living costs.
However, it’s not just wage reviews that have resulted in wages in Luxembourg averaging at €79,903 per year. Average salaries are also driven by the financial sector where employees are well remunerated for their skills and expertise.
Norway
The Nordics consistently rank high on the happiness scale, and those living in Norway in particular can be extra gleeful in the knowledge that they earn more money on average than their Scandinavian neighbour, as well as those in the US.
Norway has also implemented legislation and policies that are working to address gender equality within the workplace—it was the first country in the world to introduce a gender quota of 60/40 for company boards.
ADVERTISEMENTWhile taxation at 28 per cent is above the OECD average of almost 25 per cent, the average yearly salary comes in at €74,506.
It is largely down to high education standards alongside a culture that fosters financial equality among workers—those working in unskilled jobs earn only slightly less than those in professional industries.