– social security tax is “only” 13.07% for the employee
– the 50% federal tax is only on a part of your salary
– municipal tax I’ve no idea where they get it
They added up the maximum marginal tax rates, your effective tax rate isn’t that – assuming you make €100 and it’s taxed at the top tax bracket, you pay 13.07% RSV, then 50% of that as income tax, and finally 9% on the remaining amount, leaving you with €39.55. So closer to 60%, the 79.5% figure is misleading.
Meanwhile
> Capital Gains Tax 0%
🤡
I think you can get there if you add what the employer needs to pay on top of your salary? In the end it’s still money someone needs to pay for you to be able to get paid, I don’t see why we see it so differently when discussing taxation.
Wikipedia is not a source.
I think it’s mistake. They count 20.5% + 50% + 9% = 79.5 %
First you can’t just add percentages like that, you need to muyilpu their 1-x between themselves so 1-(1-0.205)*(1-0.5)*(1-0.09) = ~63.8% avg tax rate (if the rates are valid to start with)
But that’s not how it works. The social security for freelancer is 20.5% but goes to 14% after 60k/y and to 0 % after 89k/y.
For employees the social security is 13 % for employees, the employer pays another 25% (sometimes more) in social contributions.
Then from what I remember the communal tax is a percentage of how much tax you pay, not of your income.
I know a family where the mother died, the daughter received money from the inheritance. Of course she had to pay taxes to receive the money in the first place. Now the daughter died and the father has to pay tax again on that same money. So the parents payed taxes on that money to receive it in the first place, it was taxes when it went to the daughter and now they payed taxes on it AGAIN to receive it back from the daughter who passed away. This is pure mafia imo.
That’s like an impossible tax rate. No one pays that much tax.
8 comments
Its literally explained in the same column… But numbers are a bit misleading.
20.5% (mandatory social security tax) + 50% (federal) + 30-89EUR (regional )+ 3-9%municipal)
However,
– social security tax is “only” 13.07% for the employee
– the 50% federal tax is only on a part of your salary
– municipal tax I’ve no idea where they get it
They added up the maximum marginal tax rates, your effective tax rate isn’t that – assuming you make €100 and it’s taxed at the top tax bracket, you pay 13.07% RSV, then 50% of that as income tax, and finally 9% on the remaining amount, leaving you with €39.55. So closer to 60%, the 79.5% figure is misleading.
Meanwhile
> Capital Gains Tax 0%
🤡
I think you can get there if you add what the employer needs to pay on top of your salary? In the end it’s still money someone needs to pay for you to be able to get paid, I don’t see why we see it so differently when discussing taxation.
Wikipedia is not a source.
I think it’s mistake. They count 20.5% + 50% + 9% = 79.5 %
First you can’t just add percentages like that, you need to muyilpu their 1-x between themselves so 1-(1-0.205)*(1-0.5)*(1-0.09) = ~63.8% avg tax rate (if the rates are valid to start with)
But that’s not how it works. The social security for freelancer is 20.5% but goes to 14% after 60k/y and to 0 % after 89k/y.
For employees the social security is 13 % for employees, the employer pays another 25% (sometimes more) in social contributions.
Then from what I remember the communal tax is a percentage of how much tax you pay, not of your income.
I know a family where the mother died, the daughter received money from the inheritance. Of course she had to pay taxes to receive the money in the first place. Now the daughter died and the father has to pay tax again on that same money. So the parents payed taxes on that money to receive it in the first place, it was taxes when it went to the daughter and now they payed taxes on it AGAIN to receive it back from the daughter who passed away. This is pure mafia imo.
That’s like an impossible tax rate. No one pays that much tax.