Wage vs. Living Costs in the EU: Only one Country Offers a Livable Minimum Wage
Wage vs. Living Costs in the EU: Only one Country Offers a Livable Minimum Wage
Gisma University of Applied Sciences compares minimum and average wages with local living expenses across EU member states
A recent study by Gisma University of Applied Sciences (www.gisma.com) reveals that in nearly all EU countries, the statutory minimum wage falls short of covering basic living expenses for individuals—let alone families. Only in Belgium does the net minimum wage exceed the average monthly cost of living, including rent, for a single adult. The research compares net minimum and average incomes across the EU with average living costs and housing expenses for both single individuals and four-person households.
In this context, the minimum wage refers to the lowest legal compensation employers are required to pay full-time workers, usually defined on a national level. While the concept is widespread globally, the purchasing power such wages offer can differ significantly – especially when compared to local living standards.
Minimum wage leaves most full-time workers in deficit
In 25 out of 26 EU countries with a national minimum wage, full-time workers are unable to cover basic costs. The situation is most critical in Cyprus, where the net minimum wage is €886, compared to average monthly living costs of €1,801.90 – a gap of €915.90. Czechia follows closely behind (–€803.19), with similar deficits in Malta (–€796.59) and Germany (–€354.17).
Families earning minimum wage face even larger challenges
When calculating for a family of four (two working adults, two children), the affordability gap widens dramatically. Even in relatively strong economies like Belgium and the Netherlands, two full-time minimum wages leave families in deficit by €768.25 and €1,292.24, respectively. Spain ranks third worst at –€1,615.43. The largest gaps are found again in Cyprus (–€3,050.22), Malta (–€2,560.62) and Czechia (–€2,496.04). Social benefits like housing or child allowances were intentionally excluded from this comparison to reflect pure earning power.
When recalculated for families of four, the average income remains insufficient in 16 EU countries. The largest shortfalls are found in Malta (–€1,468.62), Greece (–€1,368.69) and Portugal (–€1,339.07). In contrast, countries like Denmark (+€2,200.63), Sweden (+€2,162.97) and the Netherlands (+€1,735.76) offer greater financial stability for families. Germany ranks fourth, with a family surplus of €1,391.70 – one of the most favorable results in the EU.
Prof. Dr. Ramon O´Challaghan, President at Gisma University of Applied Sciences, comments on the results: "This study highlights a reality that’s often overlooked: in much of Europe, earning the legal minimum wage is not enough to cover everyday living costs. That’s not just an economic issue – it’s a question of access and opportunity, especially for young people starting their careers. What’s striking, however, is how strongly countries like Germany perform when average salaries are compared to real living costs. For international students and professionals considering a future in Europe, this is a key message: if you aim for skilled, high-demand roles, Germany offers not just education, but economic upward mobility. With the right qualifications, individuals can rise far above the minimum wage and secure a financially stable life in Europe. That’s why investing in a high-quality, career-oriented education is more than a personal decision – it’s a strategic one."
About the study
The Gisma University of Applied Sciences has compared minimum and average incomes in the EU member states with the average cost of living and rents. In each case, the net income for a full-time job (40 hours a week) was assumed. Countries without a standardised statutory minimum wage (Denmark, Austria, Finland, Sweden and Italy) were not included in the minimum wage ranking. The data on net minimum and average income comes from publicly available overviews of European wage statistics. These overviews are based on information from sources such as Eurostat, the OECD and national statistical offices and were retrieved via the corresponding consolidated Wikipedia entries (as at June 2025). The cost of living and rental costs are based on data from Numbeo.com and reflect the average requirements for urban living near the city centre. A one-bedroom flat was assumed for individuals and a three-bedroom flat for families. For families, it was also assumed that two adults are in full-time employment. The difference between the net income and the combined monthly expenditure gives the monthly surplus or shortfall - an indicator of whether an income is sufficient to live on in real terms or not. This shows how large the financial gap still is in many countries despite working.