Equivalent Net Income in Europe: Where Do Households Earn the Most? 0 12

In recent years, households in Europe have experienced a severe cost of living crisis, exacerbated by Russia's war in Ukraine and post-pandemic supply shocks. Many families have been forced to tighten their budgets, and households continue to count their pennies—even as inflation approaches the ECB's target level of 2%.

One useful indicator of household income is the "median equivalent net income." This is the typical income per person, adjusted for family size and after taxes.

As of 2024, the median equivalent income in 34 European countries ranges from €3,075 in Albania to €50,799 in Luxembourg.

In the EU, the lowest median equivalent income is in Bulgaria at €7,811, while the EU average is €21,582.

At the top of the ranking, Luxembourg is joined by Switzerland and Norway, followed by Denmark, Austria, Ireland, the Netherlands, and Belgium—all in the €30,000–€35,000 range. Finland, Germany, Sweden, and France also fall above the EU average.

Income levels below €10,000, in addition to Bulgaria, are also seen in Hungary and Romania within the EU.

The Divide Between East and West

Data indicates a clear geographical divide: Western and Northern European countries have the highest median incomes, while Southern and Eastern regions lag behind. For instance, the gap between Luxembourg and Bulgaria exceeds €40,000.

Dr. Stefano Filauro, an associate professor at Sapienza University of Rome, told Euronews Business: "The level of average wealth observed in 2024 reflects long-term structural factors such as historical growth paths, industrialization, and wealth development."

Productivity and Economic Structure Matter

According to Giulia De Lazzari, an economist at the International Labour Organization (ILO), differences in productivity and industrial structure help explain this gap.

"Higher labor productivity allows countries to sustain higher wages," she said in an interview with Euronews Business.

"This means that in countries with large high-profit sectors, such as finance, information technology, or advanced manufacturing, wages tend to be higher, while in countries reliant on agriculture or basic services, they are lower," De Lazzari stated.

Adjusted for Purchasing Power

When adjusted for purchasing power standards (PPS)—an artificial currency that equalizes what can be bought with money in different countries—the gap narrows but remains significant.

The median equivalent net income ranges from 5,098 PPS in Albania to 37,781 PPS in Luxembourg. The EU average is 21,245 PPS, with Hungary (11,199 PPS) having the lowest figure among EU members.

The gap between the lowest and highest figures in the EU is about 26,500 PPS, while in nominal terms, it is nearly €43,000.

Countries like Poland, Romania, and Bulgaria show significantly better outcomes when incomes are measured in PPS rather than nominal terms.

Among the "big four" EU countries, Germany and France remain above average, while Italy and Spain are slightly below.