THE "hidden" labour costs of social security and other mandatory benefits for employees are three times higher in the EU than the US, Japan and the newly industrialising countries of southeast Asia.
A new study by Sedgwick Noble Lowndes says that 30 per cent of the pay bill of the average EU employer is to fund compulsory benefits, compared with 9 per cent in the US, 13 per cent in Japan and 11 per cent in southeast Asia.
The lowest statutory contributory charges on EU employers for social security are in Denmark, at 4 per cent of gross pay. The second lowest is Britain, with 8 per cent and the highest is Italy with 51 per cent. Ireland, at 3 per cent of gross pay, has the third lowest level of social security levy.
However, when other mandatory and voluntary contributions are taken into account, the average employer pays 6 per cent in Denmark, 20 per cent in Britain and 24 per cent in Ireland. This pushes Ireland into seventh place behind Luxembourg at 15 per cent, Norway at 20 per cent and the Netherlands at 21 per cent.
By contrast, some of the lower wage economies within the EU and most countries in central and eastern Europe have much higher levels of employer contributions.
Within the EU, Italian employers with "hidden" costs amounting to 51 per cent of gross wages are followed by the French and Belgians at 46 per cent. The average German employer pays the equivalent of 27 per cent of the gross wage.
The global research manager of Sedgwick Noble Lowndes, Mr David Fraser, says the EU is characterised by a persistently higher level of unemployment and lower job creation levels than competing economies. Given the reduced workforce, choices are limited, although countries with a mix of mandatory and voluntary occupational plans are better placed to control costs.
