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Objective: No consensus exists about the socioeconomic patterning of subjective well-being (SWB) in the European working population: some studies report a worse well-being in lower socioeconomic positions, while others report signs of reverse associations or insignificant results. One reasons for contradictory findings might be the lack of conceptual foundation of the socioeconomic measures. This study used relational social class indicators of E.O. Wright to examine social inequalities in SWB, because of their capacity to uncover a set of structural mechanisms that are associated with health inequalities. In addition, we investigate whether the psychosocial work environment, employment conditions and relations act as intermediary determinants of social inequalities in SWB. Methods: Data from the European Social Survey Round 2 and 5 is analysed. SWB is assessed by the WHO Well-being Index. Models were generated using three-level multilevel modelling. Results: We found social class inequalities in the SWB of the European population: For both men and women, compared to unskilled workers managers reported the best SWB, while supervisors held an intermediary position. An unfavourable psychosocial work environment and low quality employment conditions mediated the relation between social class and SWB. However, low quality of employment relations only mediated the relation between social class and SWB in the male sample. Conclusions: Relational indicators of social class are related to the SWB of European employees, and provide a complementary approach to stratification indicators in social epidemiology. From a policy perspective better employee SWB and less social inequality could be achieved by more horizontal social relations.