Labour costs, their structure and labour cost index

Data on labour costs and their structure are used to obtain information on total labour costs and their components, as well as to provide the basis for calculating quarterly labour cost indices.

Labour cost index data are used to provide regular (short-term) and timely indicators of labour costs, which are essential for monitoring changes in labour costs and for understanding inflation processes and labour market dynamics.

State and local government institution, state and local government merchant, private commercial company, individual merchant, foundation, association and fund employing 1 and more persons.

Target population are all statistical units (state and local government budgetary institutions, state and local government merchants, private commercial companies, individual merchants, foundations, associations and funds employing 1 and more persons) economically active in 2025.Target population of the survey does not include:

• religious organisations;
• peasant and fishermen farms;
• rural handicraft enterprises;
• family businesses;
• individuals performing economic activity.

Target population does not include also statistical units having NACE Revision 2 classification economic activity code starting with 97, 98 or 99.

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Statistics database

The Statistical Office of the European Union (Eurostat) publishes information on the EU-27 and on a country-by-country basis on its website, in the section: Labour costs.

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Information is obtained by compiling data from quarterly CSB statistical reports on the activities of commercial enterprises, central and local government bodies, foundations, associations, and funds (questionnaires 2-darbs, 2-darbs-pašvaldības, and 2-darbs (īsā)), as well as from administrative data sources.

Questionnaire 2-darbs (īsā) is submitted by commercial enterprises, foundations, associations, and funds with 10 to 99 employees.
Questionnaire 2-darbs-pašvaldības is completed by municipalities and other municipal institutions.
All other statistical units included in the sample submit questionnaire 2-darbs.

Administrative data are obtained from employer reports submitted to the State Revenue Service:

• monthly report on compulsory state social insurance contributions from employee earnings, personal income tax, and the business risk state duty;
• report on income of seasonal agricultural workers, personal income tax, and social insurance contributions; and
• micro-enterprise tax declaration.

In 2025, about 5.3 thousand respondents are surveyed quarterly.

Central and local government bodies, commercial companies with central or local government capital participation of 50% or more, and all private sector businesses with 100 or more employees are surveyed fully. Other statistical units are surveyed using a simple random sampling method, with strata pre-defined by economic activity and enterprise size (based on the number of employees). In addition, all general government sector units – that is, every unit with an institutional sector classification code starting with S13 – are included in the sample, regardless of any other criteria.

The sampling frame was built using information from the CSB Statistical Business Register on economically active units. At the time the sample was drawn, the frame included all statistical units meeting the target population criteria ­– a total of 100 594 units.

*SVTK – CSB typological classification of statistical units.

The information is collected from reports submitted every quarter. The data acquired from the sampled respondents is summarized with the help of weights given to each sample unit. The indicators multiplied by weights at first are summed up at class (four-digit), group (three-digit), division (two-digit) and section (letter) level according to NACE Revision 2. Information is compiled based on the main kind of activity.

Labour cost indicators are given on employees having working time registration and wages and salaries whereof have been calculated.

As of the first quarter of 2025, data compilation is based fully on the enterprise definition.

The enterprise is the smallest combination of legal units that is an organisational unit producing goods or services, which benefits from a certain degree of autonomy in decision-making, especially for the allocation of its current resources. An enterprise carries out one or more activities at one or more locations. An enterprise may be a sole legal unit.

Each quarter, data summaries are analysed to assess the reliability of the results obtained through imputation and weighting of non-responding and indirectly surveyed statistical units. Summary indicators are compared with those from previous periods and with administrative data sources.

Compared to quarterly data, annual data for hourly and monthly labour costs include additional components such as the costs of training, recruitment, work clothing and uniforms, medical examinations and vaccinations required for work, as well as the costs of special meals and beverages.

The labour costs index LCI (in percent) in the period t is calculated as follows, with the average hourly labour costs in 2020 = 100 taken as the basis:

LCI_t = LC_t : LC _{average in 2020} x 100, where

LC_t – hourly labour costs in the period t;

LC _{average in 2020} – hourly labour costs on average in 2020.

Hourly labour costs LC in the period t are calculated in the following way:

LC_t = TLC_t : TH_t, where

TLC_t – total labour costs in the period t;

TH_t – total hours actually worked in the period t.

Hourly labour costs are calculated separately on each of the following three labour cost categories: total labour costs, gross wages and salaries and other labour costs.

The aggregate labour cost index for NACE Revision 2 B–S is calculating using Laspeyres chain index method, where the total labour costs of previous year by NACE sections are used as weights. The weights are changed annually.

Labour cost indices are calculated and published in two ways – seasonally adjusted and non-adjusted. Seasonally adjusted data are indicators that allow estimating changes in economic processes in time series analysis more objectively, eliminating influence of seasonality, varying number of work days, various holidays (e.g., Easter, Ligo, or Christmas) on labour costs.