Compared to the 1st quarter of 2020, average monthly gross wages and salaries grew by EUR 105 or 9.5 %, but gross hourly payment – by 7.1 % (from EUR 7.39 to EUR 7.92).
Compared to the 4th quarter of 2020, in the 1st quarter of 2021 average monthly gross wages and salaries increased by 1.6 %, but hourly payments reduced by 4.1 %.
Average net wages and salaries (calculated based on labor taxes applicable in the workplace) comprised EUR 891 or 73.9 % of gross wages and salaries. During the year this increased by 9.6 %. Considering consumer price growth, the real increase of the wages and salaries comprised 9.7 %.
As of 1 January 2021 the national minimum wage rose from EUR 430 to EUR 500 (or by 16.3 %), the income threshold was increased above which basic allowance is not applied, general tax rate of state social insurance mandatory contributions and rate of solidarity tax, as well as personal income tax rate on large income slightly reduced.
Median monthly wages: EUR 939
In the 1st quarter of 2021 median monthly gross wages and salaries for full-time work comprised EUR 939. Compared to the 1st quarter of 2020 (EUR 860) it rose by 9.3 %. In the 1st quarter of this year, net median wages (after taxes) constituted EUR 702 and rose by 10.1 % over the year.
Median is calculated based on the information available in statistical surveys and the State Revenue Service.
The median is the average in the middle of the ascending or descending order of wages of the employees, i.e., half of the wages are higher than the median and the other half are lower. As median, compared to the mean arithmetic earnings, is not influenced by extremely high or low wages and salaries, it reflects typical earnings more precisely, according to the CSB.
Public sector rise was slightly higher
In the 1st quarter of 2021, average monthly gross wages and salaries in the private sector comprised EUR 1 208 and during a year rose by 9.5 %. In the public sector average wages and salaries were EUR 3 more (EUR 1 211) than in private sector, and its annual growth rate was slightly faster (9.7 %).
There remain wide regional variations in pay rates. Compared to the 1st quarter of 2020, in the 1st quarter of 2021 average gross monthly wages and salaries grew faster in Latgale – by 12.5 %. The slowest growth was observed in Pierīga, the area immediately surrounding the capital – by 6.6 %. The largest average gross wages and salaries for full-time work were in Riga – EUR 1 358, but the lowest – in Latgale (EUR 842), which is 38 % less than in the capital.
Salary for one hour worked – EUR 7.92
Gross wages and salaries per hour worked in the 1st quarter of 2021 were EUR 7.92 and over the year it increased by 7.1 % (in the 1st quarter of 2020 – EUR 7.39).
Total hourly labour costs, which include both wages and salaries and other labour-related costs of the employer, increased from EUR 9.34 to 9.90 or by 6.0 % during the year, which was affected by the reduction in the number of hours worked by 5.7 %, while total sum of labour costs almost did not change (rise of 0.02 %).
Compared to the other Baltic states, in the 1st quarter of 2021 the largest average gross wages and salaries were registered in Lithuania – EUR 1,517 for full-time work, in Estonia – EUR 1,473, but in Latvia they were the lowest – EUR 1,207.
As compared to the 1st quarter of 2020, in Lithuania there was the most rapid increase in average wages and salaries – of 9.9 %, in Latvia – 9.5 %, but in Estonia – 4.9 %.