Labour costs are defined as total employer expenditure on employees and generally represent a large proportion of the costs of the production of goods and services. They include gross wages (79,7% of total costs in 2020), social contributions paid by the employer (17.4%), as well as other expenses including professional education, training and recruitment (2.9%) and in 2020 amounted to CHF 63.62 per hour worked for all secondary and tertiary sector enterprises.
Costs differed not only by economic sector but also often depending on the size of enterprises.
For businesses, the cost of labour is one of the main indicators for the attractiveness of a country's different economic locations and can vary greatly from one country to another. According to the results of the 2016 structural survey – the most recent published by Eurostat – average labour costs rose in Switzerland in 2016 to €55.60 per hour worked in businesses with 10 employees or more. The EU15 countries showed lower costs in the same year, ranging from €13.60 (Portugal) to €41.35 (Denmark). In France, Germany, Austria and Italy, countries bordering Switzerland, hourly costs were €34.65, €32.75, €32.55 and €27.65 respectively. The differences were even greater when looking at new EU member countries: in 2016 only in Cyprus (€15.70) and Slovenia (€16.75) were labour costs higher than €15 per hour. A member country like Switzerland of the European Free Trade Association (EFTA), Norway posted an average hourly labour cost of €49.25.