Average wage amount after taxes in Latvia – EUR 812

In Q1 2020 the average gross wages and salaries for full-time work increased by 6.6 % or EUR 68 and comprised EUR 1 100.

In January 2020, compared to the corresponding period of 2019, the average monthly gross wages and salaries grew by 7.0 % or EUR 1 101, in February – by 7.8 % (EUR 1 085), but in March its growth rate was the slowest – 5.0 % (EUR 1 113), according to data compiled by the Central Statistical Bureau of Latvia.

Compared to Q4 2019, gross wages and salaries have dropped by 1.2 % in Q1 2020.

Average net wages and salaries (calculated based on labour taxes applicable on workplace) comprised EUR 812. Over the year, it rose by 6.3 %, but, as compared to Q4 2019, fell by 0.8 %.

Considering the consumer price growth, the real increase of the wages and salaries comprised 4.3 %.

In Q1 2020, median gross wages and salaries amounted to EUR 858 (in Q1 2019 – EUR 784). Compared to Q1 2019, it rose by 9.5 % – more rapidly than the average wages and salaries. In Q1 this year, net median wages (after taxes) constituted EUR 641 and rose by 8.9 % over the year.

Median is an average indicator located in the middle of employee earnings sorted in an ascending or descending order. 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.

Median is calculated based on the information available in statistical surveys and data of the State Revenue Service.

In Q1 2020, the average gross wages and salaries in public sector exceeded indicator of private sector only by EUR 4 – EUR 1 104 (in private – EUR 1 100), however, annual growth rate in public sector was slightly sharper – 6.7 % (in private – 6.5 %). General government sector, which includes central and local government institutions, as well as enterprises controlled and financed by the central and local government, average wages and salaries increased to EUR 1 061 or 7.8 %.

As compared to Q4 2019, in private sector average wages and salaries rose slightly (by 0.4 %), but in public sector reduced by 4.5 % due to the fall of irregular bonuses and premiums.

Changes in the average wages and salaries are influenced not only by the rise in employee remuneration, but also structural changes of the labour market – enterprises that had started and stopped their business during the year, changes in the number of employees and workloads. The effects caused by the mentioned factors in general may be seen in the changes in the wage and salary fund and number of full-time employees, which are used in the average wage calculations.

Compared to Q1 2019, gross wage and salary fund has increased by 7.5 % or EUR 172.3 million in Q1 2020. Whereas the number of salaried workers, recalculated into full-time units, grew by 0.9 % or 6.3 thousand.

Affected by COVID-19 crisis, in Q1 2020, compared to Q1 the previous year, average wages and salaries in accommodation and food service activities fell by 3.0 %. But in March, both compared to March 2019 and to February of this year, it reduced by 21 %. As compared to February, average wages and salaries in March also decreased in arts, entertainment and recreation sector (-1.1 %) and education (-0.9 %), which was not observed in the previous three years.

Over the year, average wages and salaries increased the most in other service activities (that includes activities of public and other organisations, repair of computers and personal and household goods, washing and (dry-)cleaning, hairdressing and other beauty treatment, funeral and related activities) – by 12.8 % and human health and social work activities – by 11.5 %. In other service activities sharper increase in salary fund of public and other organisations sector and reduction of full-time workers in other sub-sectors had the largest impact on changes of average wages and salaries.

Without the mentioned sectors, average wages and salaries in Q1 2020, compared to Q1 2019, also had the sharpest rise in construction sector – growth of 8.9 %, manufacturing and professional, scientific and technical activities – by 8.0 % in each, administrative and support service activities – by 7.9 %, as well as mining and quarrying – by 7.7 %.

In Q1 2020, average gross wages and salaries for full-time work in financial and insurance activities, information and communication, energy, public administration, professional, scientific and technical activities, mining and quarrying, as well as human health and social work activities were larger than that of national average indicator (EUR 1 100).

The smallest average wages and salaries were registered in accommodation and food service activities, education, arts, entertainment and recreation, real estate activities and other service activities.

Compared to Q1 2019, out of all regions in Latvia average gross monthly wages and salaries grew faster in Pierīga – by 10.2 % in Q1 2020. In other regions, except of Latgale, annual increase was within 5.6-5.9 %. In Latgale, where average wages and salaries were the lowest – EUR 747, annual growth rate was also the smallest – 4.9 %. In the 1st quarter the average monthly gross wages and salaries in Riga were the largest – EUR 1 227 for full-time work.

Rapid growth in average wages and salaries in Pierīga region were affected by drop of full-time workers in trade sector due to the change of office address of an enterprise and salary fund growth in real estate activities, information and communication, energy and administrative and support service activities.

The CSB compiles information on average wages and salaries by regions according to the address of office or main activity of an enterprise or institution.