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Expanding your business globally means hiring employees around the world. As workforce spendings are an important cost factor, local wage levels are a crucial aspect to consider when deciding where to set up shop. The problem is that, with so many countries in the world and the constant adjustments of minimum wage rates, it’s difficult to have all the necessary data at hand and to keep up with the changes.
Yet knowing the local minimum pay requirements is vital for taking well-informed business decisions when choosing a destination for international expansion. In this blog post, we’ll provide a detailed overview of minimum wage rates across the globe for 2022. Plus: We’ll tell you how to offer your global team an attractive compensation and benefits package.
Just a quick note before we get started: The minimum wages per country provided in this article were researched in March 2022. In order to make it easier to compare them, we’ve added the equivalent amount in Euros, using the foreign exchange rates which were valid at the time the blog post was composed.
Before we get right into our international comparison of minimum wages by country, let’s first shed some light on how minimum wages are defined. This actually differs from country to country.
While some countries have introduced what is called a “national” or “statutory” minimum wage, others have adopted a system of regional minimum wages, and yet others leave it entirely to workers unions and companies to set the minimum wage for their respective industry or sector in collective bargaining agreements (CBA). If the latter is the case, minimum wages by sector may either be valid for the entire country or for a particular region only.
Minimum wages can thus be set by a number of different actors, including federal and regional governments, special governmental boards (often known as minimum wage boards) and institutions whose prime function is controlling national wage levels, or the parties of a CBA.
Or maybe we had better rephrase this question to: “Which countries don’t have a national minimum wage?” As we’ve seen, minimum wages don’t necessarily have to be fixed by the central government, but can also be set for individual regions or industry sectors. Therefore, there’s almost no country that doesn’t have any form of minimum wage regulation.
However, the most cited (developed) countries that haven’t defined a national minimum wage are the Nordic countries Denmark, Sweden, Norway, Finland and Iceland, and Switzerland, where minimum wages are set by each canton individually. Other countries without statutory minimum wage include Singapore, Italy, Austria and Cyprus.
All the countries mentioned in this list do, however, have other mechanisms in place that determine minimum wages, notably collective bargaining agreements or regulations with regard to specific job categories. For instance, employees in Cyprus who are working as shop assistants, clerks or in similar roles must be paid a monthly minimum wage of at least EUR 870 per month (as of January 2022).
Drawing a comparison between different countries with regard to their minimum wage regulations is quite challenging for a number of reasons. First, minimum wages are usually published in the country’s local currency.
Second, while some countries define a monthly minimum wage, others only fix an hourly minimum wage. Hence, it’s necessary to first calculate either the hourly or monthly pay rate for all countries to draw final conclusions. Third, in some countries like the UK, Ireland or the Netherlands, minimum wage rates vary with employee age.
And last but not least: Regional minimum wage rates should also be taken into consideration in order to provide a complete picture. With these factors in mind, we’ve compiled a short list of the countries where employers are required to pay the highest minimum wages.
Australia: The current hourly minimum wage in Australia is AUD 20.33 (EUR 13.86).
France: The third highest minimum wage in the EU is found in France where employees must be paid at least EUR 10.57 per hour.
Ireland: Employees in Ireland are entitled to a minimum hourly pay rate of EUR 10.50.
Luxembourg: Luxembourg’s minimum wage rate is the highest in the European Union with an hourly rate of just above EUR 13.
Netherlands: The Netherlands rank second in the EU when it comes to minimum wage rates. In 2022, the monthly minimum wage rose to EUR 1,725 per month, which equals between EUR 9.96 and EUR 11.06 per hour (depending on the employee’s standard working hours)
New Zealand: New Zealand’s minimum wage currently stands at NZD 20.00 (EUR 12.64) per hour and is set to rise to NZD 21.20 (EUR 13.40) in April.
Switzerland: Although there is no national minimum wage, four cantons in Switzerland have set their own minimum pay rates, with the canton of Geneva leading the way with a whopping hourly minimum wage of CHF 23 (roughly EUR 22.52).
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Given that many global companies have outsourced their production to Asia, it’s not surprising that some of the world’s lowest minimum wages can be found in the region. However, minimum wages in some parts of Africa are even lower. Here are some of the countries that have the lowest minimum wages in the world.
Please note that we’ve only listed countries where an official minimum wage rate is in place. Wages in countries such as Cuba, Tanzania or Venezuela may be lower on average, but are either not regulated or are hard to estimate because of inflation or other economic factors.
Bangladesh: The minimum wage in Bangladesh is set at BDT 1,500 (EUR 15.77) per month, but may vary depending on the sector.
Gambia: Gambia’s minimum wage is fixed at GMD 50 (EUR 0.84) per day.
Kyrgyzstan: The minimum wage rate in Kyrgyzstan is set at KGS 1,970 per month (roughly EUR 18).
Pakistan: Pakistani employees must be paid at least PKR 17,500 per month (EUR 87.47).
Sierra Leone: The minimum wage in Sierra Leone is currently fixed at SLL 500,000 per month (EUR 38.31).
Below you’ll find the national minimum wages for major countries in Europe, Asia and the Americas that don’t fall into the category of highest or lowest minimum wage.
Argentina: In February, the Argentinian minimum wage rose to ARS 32,616 (EUR 267.60) per month.
Brazil: Employees in Brazil are entitled to a minimum remuneration of BRL 1,212 (EUR 227.98) per month.
Canada: The provinces are allowed to set their own minimum wages, but the federal minimum wage in Canada is currently set at CAD 15.00 (EUR 10.87) per hour.
Mexico: Employees in Mexico must be paid at least MXN 172.87 (EUR 7.83) per day.
United States: The federal hourly minimum wage in the US is currently fixed at USD 7.25 (EUR 6.58). However, state minimum wages are often higher.
China: Each province in China sets its own minimum wage, but the lowest one is set by the province Hunan, where employees must be paid at least RMB 1,220 (EUR 174.02) per month. The highest minimum wage must be paid in Shanghai, where the monthly minimum remuneration stands at RMB 2,590 (EUR 369.44).
Hong Kong: Hong Kong’s minimum hourly wage rate is currently set at HKD 37.50 (EUR 4.35).
India: Minimum wage rates in India depend on a number of factors, including provincial regulations, qualification and industry sector. This leads to a total of around 1,200 minimum wage rates which apply to different employees throughout the country. The national minimum pay level lies at around INR 176 (EUR 2.10) per day.
Malaysia: The minimum wage in Malaysia stands at MYR 1,500 (EUR 323.35) per month.
Philippines: The national minimum wage in the Philippines is fixed at PHP 537 (EUR 9.35) per day.
Russia: The federal minimum wage in Russia is set at RUB 12,792 (EUR 88.36 - low rate in Euro due to inflation following the Ukraine crisis) per month. Depending on the region, different minimum wage rates may apply.
Vietnam: Minimum wages in Vietnam are set by region and vary between 4.42 and 3.07 million, which equals between EUR 175 and EUR 122.
Europe is the continent which counts the most high-paying countries in the world. However, there are huge differences in applicable minimum wage regulations.
Belgium: Although minimum wages in Belgium are determined by collective agreements, the law mandates that employees mustn’t be paid less than EUR 1,658.23 per month.
Croatia: The Croatian national minimum wage currently stands at HRK 3,750 (EUR 495.10) per month.
Czech Republic: The national minimum wage is currently set at CZK 16,200 (EUR 658.04) per month.
Estonia: In the beginning of 2022, the national minimum wage of Estonia rose to EUR 654 per month.
Germany: In January 2022, the national minimum wage in Germany rose to EUR 9.82 per hour. In July, it will reach EUR 10.45 per hour.
Greece: The national minimum wage stands at EUR 663 per month, counting 14 payments within one year. When calculated with 12 payments per year, the Greek minimum wage is currently set at EUR 773.50 per month.
Hungary: The new minimum monthly remuneration is HUF 200,000 (EUR 533.76).
Latvia: Latvia’s national minimum wage is fixed at EUR 500 per month.
Lithuania: The national minimum wage in Lithuania is set at EUR 730 per month
Poland: In 2022, the Polish minimum wage stands at PLN 3,010 (EUR 633.86) per month (up 7.5% compared to 2021).
Portugal: The minimum wage in Portugal is fixed at EUR 705 per month
Romania: On 1 January 2022, the national minimum wage increased to RON 2,550 (EUR 515.29) per month.
Slovakia: The national minimum wage in Slovakia stands at EUR 646 per month.
Slovenia: Slovakia’s national minimum wage is now fixed at EUR 1,074.43 per month (was EUR 1,025.20 in 2021).
Spain: The minimum wage in Spain is currently fixed at EUR 965 per month
United Kingdom: Minimum wage rates depend on employee age. In April 2022, the minimum hourly pay for employees aged 23 and older will reach GBP 9.50 (EUR 11.38).
Sure, wages and salaries are one of the major cost factors when calculating employment costs, but there are other aspects that need to be considered as well. Taking a decision on where to hire the next member of your global team purely based on wage levels won’t get you very far. Instead, you’ll have to consider what other employee benefits (e.g. 13th salary or annual leave) employees are entitled to in that particular country and how much you’ll have to pay in social security.
One of the main challenges of hiring and managing a globally distributed team is offering team members a competitive benefits package which complies with local standards. Providing only the minimum statutory requirements is certainly the most attractive option for your hiring budget, but won’t help you attract top talent.
That’s where hiring remote employees with an Employer of Record comes into play. An Employer of Record (EOR) not only takes the administrative burden off your shoulders, but can also advise you which benefits and salary to offer in a particular country.
Using an Employer of Record solution like Lano guarantees that your remote employees benefit from all the advantages of a local employment contract and receive an attractive benefits package. Get in touch with us today to see how Lano can help you hire top talent anywhere in the world.
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