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A minimum wage is the lowest amount a business can legally pay its covered employees as well as the lowest price point employees may sell their labor. To go beneath this price point, even to pay employees not covered by law, can be detrimental to a business. It would also more than likely lead to employees finding jobs elsewhere to meet their cost of living.
The minimum wage by country vary with an employee's location. Sometimes, an employee's minimum wage is based not only on the country in which they live but also on their state, canton, province, department, or city, and on payroll compliance laws, currency exchange, and more.
For example, in the United States, the federal minimum wage rate is 7.25 U.S. dollars (USD) per hour. However, the city of San Francisco in the state of California has a minimum wage of 16.99 USD per hour while New York City in the state of New York has a minimum wage rate of 14.20 USD per hour.
As you expand globally, knowing the local minimum wage rates where your employees reside will lead to efficient business decisions. This guide highlights everything you need to know about the minimum wage rates in different countries in the world.
Countries with the lowest minimum wage in the world
Countries with an officially set minimum wage of less than 500 U.S. dollars (USD) a month have the lowest minimum wage in the world. They include:
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Countries with the highest minimum wage in the world
Countries with an officially set minimum wage of more than 1000 USD a month have the highest minimum wages in the world. They include:
Depending on age, the minimum wage rate is approximately 7.20 pounds sterling (GBP) per hour at a high and 3.40 pounds sterling per hour at a low. That is around 691.67 to 1,465 USD a month. Check here to learn how to manage payroll in the United Kingdom.
The minimum wage is around 1,466.62 euros (EUR) per month or 1,533.50 USD.
Theapproximate minimum wage is 15.25 New Zealand dollars per hour for workers ages 18 years or older and 12.20 per hour for those aged 16 or 17 or in training. That is an estimated range of 1,293.33 to 1,616.67 USD a month.
The minimum wage is 9.15 euros (EUR) per hour. Depending on age, training, and experience, the minimum wage rate can be only 90% or less of the full 9.15 per hour (at most 8.24 per hour). By the third year of working with a company, the employee's minimum wage is increased to the full amount. This is around 1,445 to 1,621.67 USD a month.
The minimum wage for employees 18 and older in Luxembourg is 2,440 USD (2,300 EUR) per month.
Theminimum wage is estimated to be 812.50 Australian dollars (AUD) per week or 2208.04 USD a month.
Every worker in Belgium aged 18 and above is entitled to a monthly minimum wage of 1,943 USD (1,842 Euros).
Canada’s minimum wage varies according to the employee’s province. For instance, the minimum wage in Ontario is 11 USD/hour while the minimum wage in Manitoba is 10 USD.
There are 195 countries in the world, each with its own minimum wage policies and payroll laws. Social benefits, paid leave, overtime rates, and payroll taxes, along with minimum wage rates, all vary by country and even further regionally.
Finding the right location for the right candidate can be a challenge for your business and your global expansion. It is ultimately the employer's responsibility to make wise business decisions when it comes to the compensation of their employees.
A lower minimum wage rate does not imply a lack of talent within an area and vice versa. Figuring out where to source your global talent and how to pay them is vital for an expanding business looking to operate at a profit while also being compliant.
How can Skuad help?
Organizations planning to expand into new markets can make the process easier by partnering with Skuad’s global employment and payroll platform.
Skuad simplifies hiring international talent, managing payroll for employees and contractors, and ensuring compliance with country-specific employment laws in over 160 countries across the globe without setting up a subsidiary or an entity.
With Skuad, you will save time and money while enjoying the benefits of top-notch HR administration anywhere in the world.
Nathan Williams is a Global Payroll Specialist and Finance Consultant. With a background in banking and finance, he is passionate about modern tech practices in payroll management and using global payroll platforms for global payments.