Tracking salary increases across the Eurozone

Based on collective agreements covering 49.9% of employees, negotiated wages—including smoothed one-off payments—are projected to increase by 3.2% in 2025, declining to 2.4% in 2026, with coverage falling to 33.1%. Compared with the December 2025 release, the 2026 estimate has been revised slightly upward by 0.1 percentage points. Excluding the smoothing of one-off payments, wage growth is projected at 3.0% in 2025 and 2.7% in 2026. When fully excluding one-off payments, wage growth moderates from 3.9% in 2025 to 2.7% in 2026, also reflecting a marginal upward revision.

The headline wage indicator, which smooths one-off payments over time, is considered the most appropriate for capturing short-term (monthly or quarterly) developments. By contrast, the unsmoothed indicator is better suited for annual comparisons, as it avoids double-smoothing when constructing annual figures.

For 2026, the headline indicator is projected to rise by 2.1% in the first half of the year and by 2.7% in the second half. The upward trajectory reflects the diminishing mechanical downward effect caused by substantial one-off payments in 2024, which were not repeated in 2025. As these comparison effects fade, divergences between the different methodological variants of the indicator are expected to narrow. Furthermore, wage pressures are anticipated to be more evenly distributed across euro area countries compared with previous years.

The unsmoothed indicator suggests relative stability in 2026, with growth of 2.9% in the first half and 2.6% in the second half. The indicator excluding one-off payments is projected at 2.7% for both halves of the year, confirming a moderation in underlying wage growth. Employee coverage is estimated at 37.1% in the first half and 29.2% in the second half.

The projection horizon currently extends to December 2026 and will be extended to the first quarter of 2027 in the July 2026 release. The ECB emphasizes that the wage indicator is subject to revisions and should not be interpreted as a forecast, as it is based exclusively on active collective agreements. For a more comprehensive assessment, Eurosystem macroeconomic projections (December 2025) suggest compensation per employee will increase by 4.0% in 2025 and 3.2% in 2026.