In 2023

Labour Cost Index (LCI) in the Autonomous Region of Madeira (ARM) increased by 5.3% compared to the previous year

In the fourth quarter of 2023, the LCI (adjusted for working days) in the Autonomous Region of Madeira (ARM) recorded an increase of 8.9% compared to the fourth quarter of 2022. This increase resulted from the combined effect of changes in its two main components:

• Wage costs (per hour worked), which increased by 8.5% compared to the same quarter of the previous year.

Wage costs encompass the base salary, regular bonuses and allowances, irregular bonuses, and allowances (holiday allowance, Christmas bonus, year-end bonuses/profit sharing, and other irregular bonuses and allowances), payment for overtime work, and payments in kind.

• Other costs (non-wage, also per hour worked), which saw a year-on-year increase of 10.4%.

Other costs include severance payments, legal obligations borne by the employer (employer contribution to Social Security, work accident and occupational disease insurance), conventional, contractual, and optional obligations (complementary pension/disability benefits, health insurance, life/personal accident insurance, social benefits paid directly to the worker in case of absence due to illness).

The year-on-year evolution of the Labour Cost Index in the Autonomous Region of Madeira resulted from the combined effect of the increase in average costs per worker as well as the increase in the number of hours worked per worker.

At the national level, the value of the index recorded a year-on-year increase of 5.7%: +5.5% in the wage costs component and +6.8% in other costs.

In annual terms, the Labour Cost Index (LCI) in the Region in 2023 recorded an increase of 5.3% compared to the previous year, due to the annual increase observed in wage costs (+5.0%) and other costs (+6.8%). In the whole country, the annual change of this index, this year, was also 5.3%, resulting from the increases observed in wage costs and other costs, of +5.0% and +6.4%, respectively.

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