Minimum Wage Rates Across the Globe

If you’re considering expanding into new territories, or taking advantage of opportunities within developing economies, then it’s vital to know all the country-specific legislation and rules around payroll. One of the most important elements to take into account is minimum wage.

Minimum wage rates and rules vary substantially from country to country, and can change on a regular basis. On top of that, they can even vary between different states within a country, and between different types of employee. This makes keeping track of all your requirements a tricky task, one that gets trickier as the number of countries you operate in increases.

In this blog, we’ll explore the current state of play with minimum wage in several key economies around the world, and the steps you can take to stay on the right side of compliance.

Minimum wage in Asia-Pacific

There is a vast disparity in minimum wage rates across the Asia-Pacific region, as some economies are substantially more developed and prosperous than others.

• Hourly Minimum wage in Japan: varies across different prefectures. National average is 930 yen per hour (approximately £6; $8.20; €7.20)
• Hourly Minimum wage in Australia: federal minimum wage of AU$20.33 per hour (approx. £11.00; $14.70; €13) or AU$772.60 per week (approx. £420; $560; €500)
• Hourly Minimum wage in China: huge variation between big cities and more rural provinces. The lowest rate is in the Huludao and Tieling areas of Liaoning province at 10.6 yuan per hour (approx. £1.20; $1.70; €1.50). The highest rate is in Beijing at 25.3 yuan per hour (approx. £2.90; $4; €3.50)
• Hourly Minimum wage in India: it’s estimated that there are around 1200 different minimum wage rates currently in operation in India. There is a national minimum rate of 176 rupees per day (approx. £1.80; $2.40; €2.10); although local and state governments frequently apply their own rates, variable according to the type of industry involved and the skill levels of different employees
  
  

Minimum wage in Europe

As a highly developed, prosperous and relatively stable part of the world, the difference in minimum wage rates across Europe is much smaller than in other regions. However, rates naturally tend to be relatively high, particularly in the west of the continent.

• Minimum wage in the UK: the rate for 2021/22 is £8.91 per hour (approx. $12, €10.60) and will rise to £9.50 in April 2022. Lower rates apply to employees under the age of 23 and apprentices. Rates are the same across England, Scotland, Wales and Northern Ireland
• Minimum wage in Germany: national rate of €9.60 per hour (approx. £8; $10.80) - as with the UK, lower rates apply to apprentices and younger employees
• Minimum wage in France: €10.48 per hour (approx. £9; $11.20), which works out as a monthly minimum of €1521 (approx. £1380; $1700)
  
  

Minimum wage in the Americas

Understandably, there is a vast difference between the strong economies of the United States and Canada, and their Latin American neighbours to the south. Even Mexico, one of the more successful Latin-American economies, lags behind significantly:

• Minimum wage in the USA: federal minimum rate of $7.25 per hour (approx. £5.90; €6.50), but 29 of the 50 states, and the District of Columbia, have applied their own higher rates which take precedence
• Minimum wage in Canada: a new federal minimum rate of $15 per hour (approx. £8.80; US$11.80; €10.50) takes effect on December 29, 2021. As with the USA, some states may apply their own higher rate, which takes priority
• Minimum wage in Mexico: as of 2021, the rate is 141.70 pesos per day (approximately £5; $6.80; €6), but companies should note that this rate is rising rapidly year-by-year

In summary

Minimum wage is only one part of the story when assessing employee pay requirements in new territories. For example, ‘13th month’ bonuses of an extra month’s salary are customary in a number of countries, particularly in Asia. Additionally, tax and social security deductions and contributions vary greatly, including the proportions due from the employer and the employee respectively.

It can be incredibly complex and time-consuming keeping track of all of this frequently-changing information, even though it’s a vital part of doing international business. This is where the help of a global payroll provider can truly prove its worth in keeping you up-to-date and compliant, and ensuring your workforce are always paid fairly, wherever they are in the world.

CloudPay has created a library of national payroll guides to help you understand the latest payroll-related information in dozens of territories all over the world. Take a look at our Country Payroll Guides and get insights on minimum wage, employment law, bonuses, severance, tax and social security, and much more.