(FINNBAY) – Helsinki, 18 June 2014. While the cost of labor per hour could be as low as €0.28 in Vietnam, it is about €31.4 in Finland, according to the latest data. The data includes social security, wage, salary and other costs.
According to the data from the Finnish government, labour costs were, on average, €31.4 per hour worked in 2012. Wage and salary costs formed 76.6 per cent, social security costs 21.1 per cent and other costs 2.3 per cent of total labour costs.
The cost of an hour worked was highest in the central government sector, €37.5 and in the private sector in manufacturing and construction, €34.1. Labour costs were lowest in the local government sector, €28.9.
The statistics department of the Finnish government said, “Labour costs are derived when the compensations for costs received by the employer (reimbursement of pay for periods of sickness, compensations from occupational health care and employment subsidy) have been deducted from the employer’s wage and salary costs, social security costs and other labour costs.”
That means that the costs are proportioned to hours worked by the labours. The hours worked have been calculated by deducting the absences, like annual leaves and sick leaves, from the sum of regular working time and overtime hours.
The largest portion of labour costs is formed by wage and salary costs that can be divided into direct earnings, remuneration for days off and one-off pay components. The share of direct earnings, that is the remuneration paid for hours worked, represented 60.8 per cent of labour costs. Remuneration for days off make up 10.8 per cent of total costs. The share of one-off pay components in the total costs is 5.0 per cent. One-off pay components include performance-based bonuses, holiday bonuses, seniority increments and other similar bonuses. Their share is higher in the private sector than in the public sector due to higher performance-based bonuses.
In addition to wages and salaries and social security costs, labour costs include other labour cost items such as costs of in-service training, costs for industrial and protective clothing and recruitment costs. These cost items form good one per cent of all labour costs.