Theoretical background: The concept of efficiency is widely used in many scientific disciplines and is defined depending on the context in which it is used. This concept is used in economics as a criterion for the assessment of business unit operations. The issue of efficiency in agriculture is extensively studied due to its crucial role in evaluating sector performance and policy implementation. The European Union prioritises measuring production factor use to address competitiveness, sustainability, climate change, and market challenges within the Common Agricultural Policy framework. A production factor utilisation efficiency assessment is usually performed with the Total Factor Productivity. However, among all inputs, the efficiency of labour utilisation is particularly important. Purpose of the article: This study aimed to determine the efficiency of labour input utilisation and its changes with respect to performance and effectiveness on farms in the EU member states in 2012–2021. Research methods: The performance assessment was based on an analysis of a mean labour output measured by gross farm income per full time employee. Effectiveness was also examined, and labour profitability was calculated as the income generated by a farm per full-time employee. Main findings: The mean labour output and effectiveness on farms in EU member countries as determined for the years 2012–2021 varied. The mean labour output in the EU during the decade under study amounted to EUR 35,060. Denmark proved to be a significant leader in terms of labour output. Considerable differences were observed in labour utilisation performance between the old and new EU countries. The labour output index measured in most old member countries is above average. On the other hand, none of the countries that joined the EU in 2004 or later have achieved the EU average level of the indicator. A labour output increase was observed in all EU member countries during the 2012–2021 period, and its growth was the fastest among the newly admitted members. The mean labour profitability in an EU farm amounted to 14,270 EUR/AWU. Luxembourg, Belgium and the Netherlands were the countries with the highest profitability. A deterministic analysis of changes in both labour output and labour profitability shows that capital-intensive factors play a major role in their increases. The obtained results may be used in shaping EU agricultural policy, particularly in directing support towards investments that increase the technical equipment of labour and in continuing modernisation processes and structural transformations in farms, especially in the new EU member countries, as a condition for a sustained improvement in labour efficiency.