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Business in Ireland 2016

Business Costs in Ireland

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This section outlines some of the key statistics from the structural business surveys around the business costs faced by enterprises in Ireland. Personnel costs have been analysed already in other chapters ¹, however, this chapter takes a closer look at the elements that make up personnel costs, which are wages & salaries and employers’ social security costs. The chapter also examines total purchases in the business economy and how purchases are broken down by sector and size class.

¹Small & Medium Enterprises and Business Costs in Ireland.

Personnel costs

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Personnel costs are defined as the total remuneration, in cash or in kind, payable by an employer to an employee. Personnel costs include taxes and employees' social security contributions retained by the unit, as well as the employer's compulsory and voluntary social contributions².

Personnel costs are made up of:

wages and salaries
employers' social security costs

Social security costs for the employer include employer's contributions to the PRSI scheme, superannuation funds, PRSAs and other pension schemes. Also included are insurance premiums, employer’s liability insurance and private health premiums paid on behalf of employees.

² See Appendix 2 for full definition

	Social security costs	Wages & salaries
SMEs (<250)	10.2	89.8
Large (250+)	13.3	86.7
Total Business Economy	11.3	88.7

Wages & salaries accounted for 88.7% of personnel costs for the total business economy in 2016
Large enterprises paid 13.3% of personnel costs in social security compared to 10.2% paid by SMEs
Social security contributions for the total business economy made up 11.3% of personnel costs

	SMEs (<250)	Large (250+)	All enterprises
Industry	7.5	16.1	12.4
Construction	11.5	15	12.3
Distribution	10.5	11.2	10.7
Services	10.4	12	10.9
Total Business Economy	10.2	13.3	11.3

For SMEs, social security costs as a percentage of personnel costs ranged from as low as 7.5% in the Industry sector to a high of 11.5% in the Construction sector in 2016
In general, Large enterprises experience higher social security costs as a percentage of personnel costs than SMEs, ranging from 11.2% for the Distribution sector to a high of 16.1% for Industry

	Social security costs as a percentage of personnel costs
Sweden	30.4
France	29.3
Italy	27.9
Belgium	26.9
Czech Republic	26.1
Estonia	25.2
Slovakia	24.9
Lithuania	22.8
Austria	22.8
Portugal	22.5
Spain	22.1
Hungary	20
Finland	19.9
Greece	19.5
Netherlands	19.2
Romania	18.6
Germany	18.1
Latvia	17.9
Poland	16.7
Bulgaria	15
Croatia	14.5
United Kingdom	13.2
Cyprus	13.1
Slovenia	13.1
Ireland	13
Luxembourg	12.8
Denmark	8.5
Malta	6.5

Ireland had the fourth lowest social security costs as a percentage of personnel costs in the EU28 for 2015 (13.0%)
Sweden reported the highest rate personnel costs being spent on social security (30.4%)
The United Kingdom had a slightly higher rate than Ireland of social security costs as a percentage of personnel costs (13.2%)

The Services sector accounted for 49.8% of total wages & salaries paid in Ireland's business economy in 2016
Ireland's Industry and Distribution sectors each accounted for approximately one fifth of total wages & salaries paid
The Construction sector's share of total wages & salaries paid in Ireland in 2016 was 7.6%

For long labels below use to display on multiple lines	Wages and salaries
Industry	20.7
Construction	7.6
Distribution	21.8
Services	49.8

	SMEs (<250)	Large (250+)	All enterprises
Industry	42687	52194	47418
Construction	32870	54511	36169
Distribution	32341	29009	30758
Services	35667	42892	39124
Total Business Economy	43542	40218	37225

Industrial employees enjoyed the highest sectoral wages in Ireland in 2016 (€47,418 per employee)
In contrast, employees in the Distribution sector had the lowest wages (€30,758 per employee)
In the total business economy in 2016, employees in SMEs had average wages of €43,542, while employees in Large enterprises had average wages of €40,218

The Distribution sector had the largest share of total purchases in the Business Economy in Ireland in 2016 (34.4%)
The Services and Industry sectors accounted for 32.5% and 30.3% of total Business Economy purchases respectively
The smallest sector was the Construction sector with just 2.8% of total purchases in the Irish Business Economy

For long labels below use to display on multiple lines	Total purchases
Industry	30.3
Construction	2.8
Distribution	34.4
Services	32.5

5.1 Breakdown of personnel costs in the total business economy by sector and size class, 2016

5.2 Breakdown of personnel costs in the total business economy, EU28 countries, 2015

5.3 Purchases in the total business economy by sector and size class, 2016

Go to next chapter >>> Detailed Business Sectors

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Table 5.1 Breakdown of personnel costs in the total business economy¹ by sector and size class, 2016
	Personnel costs	Wages & salaries	Social security costs	Social security costs as a % of personnel costs²	Wages & salaries per employee³
	€m	€m	€m	%	€uro
Industry	12,338	10,808	1,530	12.4	47,418
SMEs (<250)	5,285	4,888	397	7.5	42,687
Large (250+)	7,053	5,920	1,133	16.1	52,194
Construction	4,516	3,973	543	12.3	36,169
SMEs (<250)	4,158	3,665	493	11.5	32,870
Large (250+)	358	308	50	15.0	54,511
Distribution	12,750	11,388	1,362	10.7	30,758
SMEs (<250)	9,437	8,445	992	10.5	32,341
Large (250+)	3,313	2,943	370	11.2	29,009
Services	29,172	25,987	3,185	10.9	39,124
SMEs (<250)	19,547	17,514	2,033	10.4	35,667
Large (250+)	9,625	8,473	1,152	12.0	42,892
Total Business Economy	58,776	52,156	6,620	11.3	37,225
SMEs (<250)	38,427	34,513	3,915	10.2	43,542
Large (250+)	20,348	17,644	2,705	13.3	40,218
Source: CSO structural business surveys
¹The total business economy includes NACE Rev. 2 Sections B to N (excluding K) and R92, R93, S95 and S96.
² Social security costs as a percentage of personnel costs for Construction were calculated using survey returns.
³Average wages per employee for Construction, Distribution and Services were calculated using survey returns.

Table 5.2 Breakdown of personnel costs in the total business economy¹, EU28 countries, 2015
	Personnel costs	Wages & salaries	Social security costs	Social security costs as a % of personnel costs
	€m	€m	€m	%
European Union (28 countries)	4,107,373	3,244,064	863,006	21.0
Belgium	111,892	81,763	30,129	26.9
Bulgaria	10,892	9,254	1,638	15.0
Czech Republic	43,912	32,443	11,469	26.1
Denmark	79,122	72,361	6,761	8.5
Germany	1,003,883	822,415	181,468	18.1
Estonia	6,108	4,570	1,538	25.2
Ireland	52,284	45,170	6,813	13.0
Greece	26,613	21,422	5,191	19.5
Spain	280,301	218,340	61,961	22.1
France	673,259	475,720	197,539	29.3
Croatia	11,465	9,806	1,659	14.5
Italy	369,089	265,957	103,132	27.9
Cyprus	4,164	3,617	547	13.1
Latvia	5,631	4,621	1,011	17.9
Lithuania	8,328	6,428	1,901	22.8
Luxembourg	12,981	11,321	1,660	12.8
Hungary	27,450	21,951	5,498	20.0
Malta	2,124	1,986	138	6.5
Netherlands	183,555	148,261	35,293	19.2
Austria	110,373	85,192	25,180	22.8
Poland	87,640	73,020	14,621	16.7
Portugal	42,790	33,152	9,638	22.5
Romania	28,618	23,286	5,332	18.6
Slovenia	11,379	9,889	1,490	13.1
Slovakia	17,387	13,057	4,329	24.9
Finland	58,868	47,172	11,696	19.9
Sweden	146,216	101,775	44,441	30.4
United Kingdom	691,051	600,118	90,933	13.2
Source: Eurostat
¹ The total business economy covers NACE Rev. 2 Sections B to N (excluding K) and S95. Note that R92, R93 and S96 are excluded from the sectoral definition of the business economy here as these sectors are not available from Eurostat.

Table 5.3 Purchases in the total business economy¹ by sector and size class, 2016
	Total purchases	Purchases for resale	Purchases for resale as a % of total purchases
	€m	€m	%
Industry	141,916	31,628	22.3
SMEs (<250)	28,036	3,472	12.4
Large (250+)	113,880	28,156	24.7
Construction	13,188	17	0.1
SMEs (<250)	11,783	17	0.1
Large (250+)	1,405	0	0.0
Distribution	160,936	140,652	87.4
SMEs (<250)	136,721	120,124	87.9
Large (250+)	24,214	20,528	84.8
Services	152,169	59,113	38.8
SMEs (<250)	71,600	41,821	58.4
Large (250+)	80,570	17,292	21.5
Total Business Economy	468,209	231,410	49.4
SMEs (<250)	248,140	165,434	66.7
Large (250+)	220,069	65,976	30.0
Source: CSO structural business surveys
¹The total business economy includes NACE Rev. 2 Sections B to N (excluding K) and R92, R93, S95 and S96.
Note: 0 for Purchases for resale has a value of less than €500k.

Business in Ireland 2016

Business Costs in Ireland

Business Costs in Ireland

Personnel costs

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