The average cost per employee is no longer just about salaries. For employers today, it reflects a complex mix of wages, benefits, taxes, healthcare, training, technology, and operational overhead.
Over the past decade, and especially since the pandemic, these costs have shifted dramatically across countries, industries, and company sizes.
This statistical post brings together the latest global data to show what employers actually spend per employee, how those costs have changed over time, and why the numbers vary so widely.
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The average cost per employee is no longer just about salaries. For employers today, it reflects a complex mix of wages, benefits, taxes, healthcare, training, technology, and operational overhead.
Over the past decade, and especially since the pandemic, these costs have shifted dramatically across countries, industries, and company sizes.
This statistical post brings together the latest global data to show what employers actually spend per employee, how those costs have changed over time, and why the numbers vary so widely.
Author
Co-author
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Leah Maglalang
Business Coordinator UAE
Real wages fell sharply in 2022 and then rebounded. According to the ILO, global real wages (inflation-adjusted) dropped −0.9% in 2022 but recovered +1.8% in 2023 (strongest since mid-2000s), with larger growth in emerging economies.
Year | Avg. Cost (USD PPP) |
2000 | 20,000 |
2001 | 20,700 |
2002 | 21,435 |
2003 | 22,200 |
2004 | 22,995 |
2005 | 23,824 |
2006 | 24,689 |
2007 | 25,591 |
2008 | 26,533 |
2009 | 27,516 |
2010 | 28,541 |
2011 | 29,611 |
2012 | 30,727 |
2013 | 31,891 |
2014 | 33,104 |
2015 | 34,368 |
2016 | 35,685 |
2017 | 37,058 |
2018 | 38,488 |
2019 | 39,978 |
2020 | 41,529 |
2021 | 43,145 |
2022 | 44,827 |
2023 | 46,578 |
2024 | 48,402 |
2025 | 50,301 |
Methodology Note:
There is no single official dataset reporting a global average cost per employee. The figures shown are estimated using OECD, ILO, World Bank labor-cost benchmarks, converted to USD using purchasing power parity (PPP), weighted by employment size, and projected using long-term global wage growth trends. These values are intended for analytical and comparative purposes.
Sources: ILO, IMF, Mercer, OECD
Pre-pandemic trend (2015–2019): In most advanced economies, labor costs rose modestly (~2–3% annually) during 2015–19.
Pandemic dip (2020): The COVID shock interrupted growth: many firms cut hours or froze hiring, moderating average labor costs.
Post-pandemic rebound (2021–22): As economies reopened, wage and labor-cost growth accelerated. U.S. data show notable wage acceleration: private-sector wage ECI rose ~4–5% in late 2021/2022.
Recent (2023–2025): Wage growth has remained robust in many regions. ILO data indicate global real-wage growth hit +1.8% in 2023.
OECD and national stats suggest 2024–25 saw continued moderate compensation growth. U.S. ECI indicates hourly wage and salary costs continuing ~5% gains by 2025.
Sources: ONS, EuroStat, StatisticsCanada
COVID impact (2020): Most economies saw a slowdown or contraction in labor costs per employee due to layoffs, furloughs, and wage freezes. For example, the U.S. Employment Cost Index showed a brief flattening in 2020. Globally, nominal wage growth decelerated as pandemic layoffs raised unemployment.
Pandemic recovery (2021–22): Recovering demand and labor shortages drove up wages. In the U.S., private wage inflation accelerated above 4%/yr.
Post-pandemic (2023+): As inflation eased (IMF: ~6.6% in 2023) and labor markets loosened slightly, wage growth remained solid. ILO reports that 2023 was the strongest year for real-wage gains (1.8% globally) since before the crisis, led by emerging markets.
Inflation effects: Nominal pay increases in 2022–23 generally fell short of inflation, so real costs per employee often shrank.
For example, U.S. average hourly compensation was ~$46 in mid-2025 (up from ~$44 in 2022), but CPI inflation of ~8% in 2022–23 meant negative real growth.
Real wage turn-around: As global inflation slowed to ~6–7% in 2023 and below 4% by 2024, real wage growth rebounded. ILO projects ~2.7% nominal growth in 2024 yields positive real growth.
Benchmarks: Across 2020–25, nominal employee cost growth outpaced inflation only when inflation was below 3–4%; otherwise real costs fell.
United States: Employers cost ~$48.05/hr (all civilians, Q2 2025). Annualized, a 40-hr wk yields ~$100k. Private-sector cost ~$45.65/hr; state/local ~$63.94/hr. Year-over-year U.S. wage growth has been ~4–5% recently.
Canada: Hourly compensation grew ~4.3% in 2024 (slowing from ~5.4% in 2023). 2024 unit labor costs +3.7%.
Mexico: Average formal wage ~MXN 10–12k/mo.
EU average: ~€33.5 per hour (EU27, 2024) (euro area ~€37.3/hr). Variation is large: €10.6 in Bulgaria to €55.2 in Luxembourg. Hourly labor costs rose ~5.0% in the EU (2024 vs 2023), led by Eastern countries (+14.2% in Croatia/Romania).
Euro Area: ~4.5% annual increase (2024). Differentials: e.g. Germany, France, etc., roughly on par with EU average.
China: Average urban wage ¥124,110 in 2024 (non-private sector), ~US$17.8k (nominal +2.8% from 2023). Manufacturing wages averaged ~¥78,561 (~US$11.3k) in 2024. Chinese real wage growth was relatively slow (+1–3% real).
Australia: Average full-time weekly earnings ~A$1,923 (May 2024) (~A$100k/yr). Annual increase ~4.6% (to May 2024), higher than inflation.
India/SE Asia: Wages have been rising ~5–10% annually in many emerging Asian economies (though from much lower bases).
GCC: Salaries in oil-rich Gulf states are high (often >$20–30k/yr median), though with high expat premiums. For example, UAE average monthly salary ~AED12,000 (≈$3,300) reported (~$40k/yr). Oil sector wages skew up averages.
North Africa/Sub-Saharan: Much lower levels. North Africa average wages often <US$10k/yr; sub-Saharan Africa often <$5k/yr. Formal sector labor costs per employee remain low by global standards.
Brazil: 2023 formal-sector average wage ~R$3,745/month (~US$730). This was +2.0% real from 2022. Manufacturing and higher-skill sectors pay more.
Mexico: 2022 average monthly wage in private sector ~MXN 10,143 (~US$540) (recent years had ~5% nominal wage growth).
Other LAC: Wages remain modest; e.g. Argentina ~USD$8k/yr median, Colombia ~$5k/yr, reflecting lower GDPs. Overall, labor costs per employee in Latin America are much lower than in North America/Europe.
As of mid-2025, the average employer cost ~$48.05/hr (all civilian workers), with wages ~$33.02 and benefits ~$15.03. Private-industry compensation ~$45.65/hr; state/local ~$63.94/hr.
This implies ~US$96k/yr private and $128k/yr public (40-hr wk). The U.S. Employment Cost Index shows ~4–5% annual wage growth recently.
Median full-time earnings ~£728/wk in April 2024, up 6.0% nominal (2.9% real) y/y. Average weekly earnings ~£706 (total) in Oct 2024.
Nominal earnings rose ~5.2% in late-2024 (real +2.2%). Public-sector pay growth (~4.3%) lags private (~5.4%). (Annualizing £706/wk ≈ £36.7k/yr.)
Average full-time gross earnings ~€62.2k/yr in 2024 (industry/service). Finance sector ~€90.6k, IT ~€83.6k. Economy-wide annual wage growth ~4–5% in recent years. (Note: collective bargaining often raises wages ~3–5% recently.)
Hourly compensation in the business sector rose 4.3% in 2024. Recent annual wage growth has been ~3–5%. Average hourly wage across industries ~C$35–38.
Average full-time adult earnings ~$A1,923/wk (May 2024) (~A$100k/yr). Annualized growth ~4.5–4.6% (to May 2024). Wage increases recently above inflation (~3.5%).
No official statutory minimum; average white-collar expat salary often $40–60k/yr, median household ~$30k. UAE salary surveys (2024) suggest ~AED12k/mth (~US$40k/yr) across all sectors. Oil/finance sectors pay much higher (~AED20k+/mth).
2024 average annual urban non-private wage 124,110 CNY (US$17.8k) (+2.8% nominal). Enterprises above designated size: ~¥102,452 (~US$14.7k). Tech & finance sectors are much higher (e.g. IT ~¥238k). Recent growth low-mid single digits in real terms.
High pay industry. In the U.S., median computer/IT occupations wage was ~$105,990 (2024). Software developers median ~$131,450, info security ~$124,910. These are ~2–3× the all-worker median ($49,500).
Moderate pay. U.S. manufacturing avg hourly earnings ~$34.5 (Dec 2024) (~$71k/yr). This is only slightly above overall private-sector avg (~$35.7).
In Germany, auto and electronics lead (~€66–83k/yr). Overall, manufacturing pays more than retail/food but less than IT/finance.
Varied by role. U.S. registered nurses median $93,600/yr (2024), above the general median. Physicians/GPs earn 2–3× nurses. Healthcare comp (~3–5% annual rise) often outpaces general inflation, but demand shortages also push up costs. (Example: NHS pay rises in the UK ~9% in 2023.)
High pay. U.S. business/finance occupations median ~$80,920/yr (2024). Accountants ~$81.7k; financial analysts ~$101.9k. Investment bankers often have much higher (six-figure bonuses). Generally ~1.5–2× general wage levels.
Low pay. U.S. retail salesperson median ~$34,580/yr (2024). E-commerce and logistics are similar or slightly higher. Wages grew slowly (~2–4%) recently.
Mid-range pay. U.S. truck drivers median ~$53,560/yr (heavy, 2024); delivery/sales drivers ~$37,130. Warehouse jobs (e.g. forklift operators) around $40k.
Wages have risen ~4–5% due to driver shortages. (Note: these include many lower-end and higher-skill roles.)
Wages dominate compensation: In the US, private‐sector workers earned about $1,266 weekly in Dec 2025. BLS (June 2025) reported average private‐industry wages of ~$32.07/hr, roughly 70% of total employer cost.
Global context: OECD (2023) data show average annual wages ≈$58K (PPP) (e.g. US ~$80K, Australia ~$67K). U.S. state medians vary widely (e.g. Washington, DC ~$119K vs Mississippi ~$50K).
Trend: Wages/salary have roughly doubled since 2000. In 2000, U.S. private firms paid ~$14.49/hr in wages vs ~$32.07/hr in 2025. Wages typically account for ~70–73% of employer compensation.
U.S. payroll taxes: Legally required contributions (Social Security, Medicare, unemployment, workers’ comp) averaged ~$3.31/hr in 2025. U.S. employers pay relatively low payroll taxes (~7% of labor costs) compared to many OECD peers.
International comparison: OECD data show the U.S. employer SSC rate (~7%) well below the OECD average (≈12%); some countries (France 26.7%, Czechia 22.7%, etc.) exceed 20%.
Regulatory costs: Small U.S. firms (<20 employees) face heavy per-EE regulatory burdens (≈$5,704/EE in 2010 for federal compliance), which are additional to direct payroll taxes.
Health insurance: U.S. employer health plan costs are steep – Mercer reports a record $17,496 per employee in 2025, a 6% increase over 2024. It is projected to exceed $18,500 by 2026.
Total benefits: BLS (June 2025) finds average benefits cost ~$13.58/hr, about 29.8% of total comp. This includes paid leave, insurance, retirement, and legally required benefits. On average for private industry, employers spent ~$23,696/year per worker on benefits. Benefits routinely account for ~30% of U.S. compensation.
Trend: Since 2000, benefits per hour rose faster than wages. In 2000 private-industry benefits were $5.36/hr vs $13.58/hr in 2025 (benefit share ~27%→30%).
Recruiting/hiring: Average cost to recruit and hire a new employee is roughly $4,000–4,400 (Glassdoor/SHRM). External recruiter fees alone often run 15–25% of first-year salary.
Onboarding: Recent data: average onboarding cost ~$1,830 per employee (small businesses $600–$1,800; large firms >$3,000). Roughly 20% of salary may be spent if early turnover occurs.
Training: Industry surveys (Training Industry) estimate ~$1,286 in training/development per employee per year. Investment in training can vary by role; technical and management roles often get higher budgets.
Software (SaaS, tools): For 2025, Zylo reports SaaS spend ~$4,830/employee. Tech-heavy sectors (IT, healthcare) may spend ~$10,000/EE. Many organizations use dozens of SaaS apps per employee (mid-size ~130 apps, large firms ~410 apps; per-employee SaaS costs can exceed $8,000 in some companies).
Hardware/Devices: Typical business laptops cost roughly $600–$1,200 (mid-range models). Enterprise-grade laptops can exceed $3,000. Monitors range ~$100–$1,000; keyboards $20–$100. Servers and network gear vary widely: basic routers ~$50 vs. enterprise switches in the thousands. Overall IT spend (capex/Opex) has grown: global IT spend ~$5.26 trillion in 2024.
Infrastructure: Many companies allocate ~3–4% of revenue to IT infrastructure). Costs include data centers, cloud services, and IT support staff.
Sources: FRED, Voronoi, Stlouisfed, OECD, DP, LearnExperts
Higher per-EE overhead: Small firms lack scale, so per-employee administrative costs and insurance premiums are higher. A SBA study found firms <20 EE incur ~$5,704 per-EE in federal regulatory paperwork costs. State taxes and small-group insurance add more.
Compensation vs revenue: Small businesses often allocate a large fraction of revenue to labor (40–80%). Limited tech/automation means more manual/admin work per employee.
Technology spend: Smaller firms use fewer SaaS tools (e.g. ~80 apps/EE for firms 200–749 workers vs 410 apps for 10k+ firms). This can mean lower direct IT spend but also fewer productivity tools.
Economies of scale: Midsize firms amortize administrative and compliance costs over more employees, reducing per-EE overhead. They can often negotiate better rates for insurance, benefits, and equipment.
Tech investment: Tend to invest heavily in software and productivity tools: e.g. ~130 SaaS apps/EE, and ~$8,000/EE on SaaS. This raises per-EE IT cost but boosts productivity.
Compensation mix: Wage and benefit percentages are similar (~70/30 split) to larger firms, but absolute compensation per employee may be higher than in small firms due to more experienced staff.
Lower overhead share: Large companies enjoy major scale benefits. Per-employee HR, payroll, and compliance costs are lower. Group insurance and retirement plans reduce per-EE benefit costs.
Total cost levels: They typically hire more highly skilled/managerial staff, raising average salary. For example, compensation often exceeds $100K for many roles in large firms.
Technology & benefits: Large firms spend heavily on benefits and tech. They may offer more extensive benefit packages (health, 401k matching) raising total comp.
Compensation-to-revenue: Firms typically spend a large fraction of revenue on labor. Industry sources say 40–80% of gross revenue goes to employee compensation.
Revenue per EE context: Many firms benchmark revenue per employee (RPE). For example, S&P 500 average RPE is ~$500–600K. At a 50% comp ratio, that suggests ~$250–300K spent per employee per year in a large firm.
Benchmarks: Service sectors often have higher comp% (consulting ~70% of revenue on salaries) vs. manufacturing (~40–50%). High-margin industries tolerate higher comp levels (e.g. software firms), while low-margin retailers must push comp% down.
Productivity link: If labor productivity (output per hour) grows faster than wages, labor cost/unit falls. Recent data (Q1 2025) show U.S. manufacturing productivity rose 4.4% while wages/costs rose ~6.4%, meaning costs are rising faster than output.
Overhead savings: Remote work can significantly cut per-employee overhead. Business.com estimates companies save ~$11,000 per employee per year by remote work (reduced office space, utilities, cleaning, etc.).
Productivity and turnover: Studies show remote/hybrid employees often work more hours, take fewer sick days, and are ~33% less likely to quit. Lower turnover reduces hiring/training costs.
Costs: Remote setups may add home-office stipends/IT support, but these are usually much smaller than avoided office costs. Overall, fully remote or hybrid models typically reduce cost per employee (real estate, facilities, FTE headcount in-office).
Salaries: High. Software developers’ median is ~$96,790 (May 2022); senior engineers and architects often $120K–$200K+. In high-cost areas (Silicon Valley), mean salaries reach $141K–$182K.
Total cost: Including benefits (~30%), equipment (high-end laptops, tools), and ongoing training, fully loaded cost per engineering EE often exceeds 1.3× base pay. Example: a $100K engineer costs ~$130K total.
Sales compensation: Includes base+commission. Sales engineers (technical sales) have median ~$121,520 (2024, BLS). Sales managers and directors often make $100–150K base, plus bonuses.
Marketing: Advertising/marketing managers median ~$127K–$161K (2024). Brand/product managers ~$90–120K median.
Creative salaries: Graphic designers median ~$61,300 (2024); video/UX designers may earn ~$70–90K. Content/brand marketers ~$50–100K.
Managerial: Marketing managers $161K median; digital/SEO managers ~$80–120K.
Logistics/ops: Logisticians median ~$80,880 (2024). Transportation/storage managers ~$102,010 (2024). Plant/production managers ~$90–130K.
Procurement/Supply: Supply chain analysts ~$70–90K. Warehouse supervisors ~$50–60K.
Costs: These roles may require supply-chain software licenses (ERP, TMS) and travel. Benefits (~30%) and equipment (e.g. tablets, scanners in logistics) add to fully loaded costs.
Clerical wages: Secretaries/assistants median ~$47,460 (2024). Office clerks ~$40–45K, HR/payroll clerks ~$45–55K.
Load: Including benefits, each such employee typically costs ~$60K total. While pay is lower, these staff often comprise 10–20% of headcount, so aggregate cost is significant.
Productivity tools: Admins use standard software (Office 365, etc., ~$72–$240/yr per user) and office space, which contributes to their cost.
The data makes one thing clear: the average cost per employee has risen sharply, but not evenly. While nominal wages have increased across most regions since the pandemic, inflation has often outpaced the pay.
Cost per employee now depends as much on where and how people work as on what they earn. For businesses, understanding these trends isn’t optional.
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