The average labor cost per worker per month, as reported by the National Institute of Statistics (INE), rose to 2,996.63 euros in the fourth quarter of 2022, marking an increase of 4.2 percent from the same period in 2021. This figure reflects the total expense of labor, including wages and social security contributions, and it indicates a steady growth in payroll expenses over the year.
Over eight consecutive quarters, the pace of growth exceeded prior levels, with a slight acceleration compared to the 4.0 percent rise recorded in the third quarter of 2022. The upward trend in labor costs is driven by several components that together form the overall monthly burden on employers.
The composition of labor costs includes wage payments, other payroll-related costs, and additional non-salary expenses. Between October and December, total fees, encompassing all forms of remuneration whether in cash or in kind, rose by 4.7 percent year over year to an average of 2,268 euros per worker per month. This marks the highest level observed since the series began in 2000, underscoring the sustained pressure on companies to fund compensation packages.
The accommodation and hospitality sector demonstrated the most significant wage growth in the fourth quarter, with average earnings increasing by 12.6 percent year on year to 1,351.64 euros per month. This notable rise contributed meaningfully to the overall uplift in labor costs for the period, reflecting sectoral dynamics and wage setting patterns in the economy.
Non-salary expenses, which cover miscellaneous costs excluding wages, totaled 728.63 euros per worker per month in the fourth quarter of the previous year. This component posted an interannual gain of 2.8 percent, illustrating how ancillary costs also contribute to the total labor burden faced by employers.
Looking at productivity and hours worked, the average weekly hours for all workers in the fourth quarter of 2022 stood at 34.8 hours, combining full-time and part-time arrangements. Of these hours, about 5.7 hours were not worked on average each week. Reasons for non-work time included holidays and vacations (2.8 hours), temporary disability due to illness (2.3 hours), maternity and paternity leave (0.3 hours), and other forms of leave or disruptions such as strikes and force majeure (0.3 hours).
The cost of labor per hour also rose, with an increase of 3.7 percent year over year in the fourth quarter of 2022, according to INE. This rise occurred alongside an uptick in productive working hours, reflecting how changes in hourly pay and actual hours worked combine to influence overall labor costs for businesses.