In February of this year, average wages in Croatia and Slovenia once again showed an interesting trend.

Although Slovenians still earn more on average, the data reveal that Croatian wages are growing faster, which is why the gap between the two countries is gradually narrowing.

This does not mean that Croatia and Slovenia are already close to complete equalization, but it does mean that the disparity, at least when it comes to the average net wage, is noticeably smaller today than it was a year ago. This is precisely what can be read from the latest official statistics.

For the comparison that follows, official data from Slovenia's SURS and Croatia's DZS were used.

What do the latest figures show?

The average gross wage in Slovenia for February amounted to 2,606 euros, while the average net wage was 1,641 euros. On an annual basis, Slovenian net wages increased by 5.9 percent.

In Croatia, the average net wage for the same month amounted to 1,527 euros, while the gross wage reached 2,139 euros. According to official DZS data, Croatian net wages increased by 7.8 percent compared with February last year.

At first glance, the difference is still clear: Slovenians receive more on average. But when the growth dynamics are examined, it is evident that Croatia is catching up faster than before.

Croatia is reducing the net gap

Croatian net wages grew noticeably faster, and this can also be seen if specific amounts are compared. The difference in the average net wage between a Slovenian and a Croatian worker in February this year amounted to slightly less than 115 euros in Slovenia's favor. In February last year, that difference was around 134 euros.

In other words, the net differences have not disappeared, but they are smaller than they were a year ago.

Is net wage important for comparison?

In international wage comparisons, both gross and net amounts are often considered, but net wage is still the most tangible for citizens. It shows how much money a worker has left 'in the account' on average after deductions.

That is why the net difference between Croatia and Slovenia is a good indicator of what employees feel most directly. At the same time, it should be kept in mind that the wage level alone is not enough for a final conclusion about living standards, because the actual quality of life is strongly affected by housing, food, energy, and service costs.

The biggest differences are visible by sector

A deeper look into the statistics shows that behind the national averages there are very large differences among individual sectors.

In Slovenia, among the best paid are experts in information services, with an average of 2,186 euros net. Right behind them are employees in finance and insurance, where the average net wage amounts to 2,169 euros.

At the very bottom are workers in accommodation and hospitality, who have an average net wage of around 1,235 euros.

In Croatia, the absolute record holders are employees in the manufacture of basic pharmaceutical products and pharmaceutical preparations, with an average net wage of as much as 4,281 euros.

At the very bottom of the ranking is clothing manufacture, where the average net wage amounts to 988 euros.

When we look at the average amounts received by workers in the highest-paid sectors and compare them with those where earnings are the lowest, we clearly see that the national average can hide large internal differences. It is one thing to talk about a country's average wage, and quite another to look at how much is actually earned in different branches of the economy.

Bonuses and supplements are an important part of Slovenian wages

An interesting detail also comes from the structure of the Slovenian gross wage. Namely, an important part of the total amount consists of various supplements and bonuses.

In the structure of the average gross wage, bonuses account for 12.4 percent, the part of the wage linked to work performance 5.2 percent, while payments for business performance account for 0.3 percent. This means that additional elements, alongside the basic wage, play a significant role in the final amount of earnings.

It is particularly interesting that the largest share of supplements was recorded in energy and mining, which further shows how much the wage structure can vary from sector to sector.

What can we conclude from all this?

The latest data give Croatia reason for optimism, at least moderate optimism. Slovenia still has higher average wages, but Croatian earnings are growing at a faster pace and the country is reducing its gap, at least when it comes to the average net amount.

This does not mean that the differences will disappear overnight. However, it is obvious that the balance of power is changing. Given that Croatian net wages have been approaching Slovenian ones for quite some time, we can conclude that this is not just a temporary trend and, if this pace of growth is maintained, the gap will continue to narrow in the coming years as well.

For a final answer to the question of who really lives better, it will still be necessary to look at the bigger picture alongside wages. The other side of the equation is prices. Eurostat data show that in March this year Croatia had the highest inflation rate in the eurozone at 4.6 percent, while Slovenia, with inflation of 2.4 percent, was below the European Union average (2.8 percent). Higher wage growth on paper does not necessarily mean a higher standard of living, especially if everyday living costs are rising noticeably faster.

Data sources: SURS, DZS and Eurostat.