INTERNATIONAL REWARD
Report on salary purchasing power
Senior managers in Switzerland have the highest purchasing power in Europe while those in Latvia are worst off, according to a new study by Mercer Human Resource Consulting.
Mercer examined the average salaries of senior managers in 24 European countries, and calculated their purchasing power based on tax and social security deductions and the local cost of living.
Switzerland top of the league
The research shows that senior managers in Switzerland score highest in terms of purchasing power.
"While senior managers in some European countries earn large salaries, their purchasing power can be significantly reduced by high tax and living costs," said Mark Sullivan, head of international consulting at Mercer.
Average salaries
On average, senior managers in Switzerland and Germany earn £94,000 and £76,000 respectively and have the highest purchasing power. Meanwhile, managers in Spain and France can buy more with their salaries (£56,000 and £57,000) than their higher paid counterparts in the UK and Belgium (£60,000 and £64,000) who pay higher taxes.
"Within the single European market we continue to see significant differences in pay, tax and social security levels," commented Sullivan. "As competition for talented employees intensifies, people with transferable skills may be more attracted to countries with good, affordable living standards than places where gross pay is higher.
A cross country-comparison of purchasing power
The table below shows each country’ s purchasing power as a multiple of Vietnam’ s, where senior managers’ purchasing power is the lowest.
| Country | Annual gross salary (£) | Annual gross salary (€ ) | Purchase power ratio |
| Europe | |||
| Switzerland | 94,175 | 133,009 | 5.3 |
| Germany | 76,279 | 107,734 | 4.8 |
| Austria | 71,598 | 101,123 | 4.1 |
| Ireland | 60,788 | 85,855 | 3.9 |
| Spain | 56,497 | 79,795 | 3.9 |
| France | 56,876 | 80,329 | 3.8 |
| Netherlands | 64,491 | 91,085 | 3.7 |
| United Kingdom | 60,264 | 85,115 | 3.6 |
| Turkey | 53,677 | 75,812 | 3.5 |
| Belgium | 64,349 | 90,884 | 3.4 |
| Italy | 58,917 | 83,212 | 3.2 |
| Norway | 60,156 | 84,962 | 3.2 |
| Portugal | 44,411 | 62,724 | 3.2 |
| Poland | 44,041 | 62,202 | 3.1 |
| Finland | 47,750 | 67,440 | 2.8 |
| Denmark | 69,187 | 97,717 | 2.8 |
| Sweden | 47,317 | 66,829 | 2.7 |
| Slovakia | 29,917 | 42,253 | 2.5 |
| Romania | 28,566 | 40,345 | 2.4 |
| Lithuania | 29,317 | 41,407 | 2.1 |
| Czech Republic | 33,051 | 46,679 | 2.1 |
| Hungary | 31,208 | 44,077 | 1.7 |
| Estonia | 21,894 | 30,922 | 1.7 |
| Latvia | 19,794 | 27,957 | 1.4 |
| Other | |||
| Hong Kong | 64,208 | 90,685 | 5.2 |
| Canada | 55,564 | 78,477 | 4.3 |
| Australia | 56,631 | 79,984 | 3.9 |
| Japan | 61,581 | 86,974 | 3.9 |
| USA | 45,598 | 64,400 | 3.4 |
| China | 27,162 | 38,362 | 2.1 |
| India | 16,869 | 23,825 | 1.6 |
| Vietnam | 15,047 | 21,252 | 1.0 |
Source: Mercer Human Resource Consulting.
Want to know more?
Title: International Geographic Salary Differentials, Mercer Human Resource Consulting.
Methodology: The report compares the pay of six position levels, from general labourers to senior managers. It also presents tax rates and includes a purchasing power ratio analysis that evaluates how many times an upper middle manager can purchase an identical basket of goods and services.
Mercer's report is designed to provide executives with a concise, descriptive report on pay levels around the world.
Availability: More details are available at www.imercer.com/intlgeo or by calling client services tel: +41 22 869 3000, or email: client.services.geneva@mercer.com
Mercer Human Resource Consulting is the "global leader for trusted HR and related financial advice, products, and services". It has more than 14,000 employees serving clients in 145 cities and 41 countries and territories worldwide. To find out more visit www.mercerhr.com
Posted 10 May 2005