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Workers pay not only income tax but also social security contributions. Together, these two components make up the personal average tax rate, expressed as a percentage of gross wage earning. This combined rate is often referred to as the \u201ctax burden\u201d.\u00a0<\/p>\n
Personal average tax rates vary significantly across Europe and tend to change annually in most countries, directly affecting net earnings. <\/p>\n
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So, which countries had the highest personal income tax and employee social security contributions in 2024? And where were the largest annual increases or decreases in personal average tax rates observed?<\/p>\n
According to the OECD\u2019s Taxing Wages 2025 report and Eurostat data, among EU countries, the UK, three EFTA members, and candidate country Turkey, personal income tax rate varied from 4.1% in Cyprus to 35.7% in Cyprus.\u00a0<\/p>\n
These figures reflect the average wage of a single worker without children, presented in national currency values.<\/p>\n
Employee social security contributions ranged from zero in Denmark to 29.9% in Romania, followed by Slovenia 23.6%.\u00a0These rates do not include what employers also pay for social security. They are often equal to or even more than the employee\u2019s share.<\/p>\n
Significant gap in personal average tax rates<\/p>\n
In 2024, personal average tax rates differed from 15.6% in Cyprus to 39.7% in Belgium. That means two out of every five euros in gross salary went to taxes in Belgium.\u00a0<\/p>\n
In seven EU countries, personal average tax rates exceeded one-third of gross earnings. Besides Belgium, this group included Lithuania (38.2%), Germany (37.4%), Romania (36.9%), Denmark (35.7%),\u00a0 Slovenia (35.6%) and Hungary (33.5%).<\/p>\n
In five additional EU countries, personal average tax rates exceeded 30%: Austria (32.7%), Luxembourg (32.1%), Croatia (30.9%), Italy (30.4%), and Finland (30.3%).\u00a0<\/p>\n
Overall, in 12 EU countries, at least three out of every ten euros of a worker\u2019s salary go directly to income tax and social security contributions.<\/p>\n
Apart from Cyprus, Switzerland is the only country where the personal average tax rate remains below 20%. It was also below 25% level in Estonia (20.5%), Czechia (21%), the UK (21.4%), Bulgaria (22.4%), Spain (22.5%), Sweden (23.1%), Poland (24%) and Slovakia (24.1%).<\/p>\n
UK lowest, Germany highest :<\/strong> 16 percentage point gap<\/p>\n Among Europe\u2019s top five economies, Germany has the highest personal average tax rate at 37.4%. Italy follows with 30.4%, which is 7 percentage points lower. France sits in the middle at 28%. The UK has the lowest rate at 21.4%, with Spain slightly above at 22.5%.\u00a0<\/p>\n There is a 16 percentage point difference between Germany and the UK, which is largely due to a significant gap in employee social security contributions: 20.7% vs 5.9%.<\/p>\n Changes in average tax rates in 2024<\/p>\n In more than half of the countries, annual changes in personal average tax rates were minimal, ranging between -2% and +2%, with no change at all in a few countries.\u00a0<\/p>\n However, some countries saw significant increases or decreases. Italy recorded the highest rise, with its personal average tax rate climbing from 28.3% to 30.4%\u2014an increase of 7.5%, or more than 2 percentage points.\u00a0<\/p>\n Cyprus followed with a 6.9% increase. The personal average tax rate also rose by more than 4% in Slovenia, Estonia, and Czechia.<\/p>\n The UK (-8.6%) and Portugal (-8%) were clear outliers in 2024, with major tax cuts resulting in personal average tax rate reductions of at least 8%.\u00a0 In both the UK and Portugal, the rates fell by more than 2 pp.<\/p>\n Two Nordic countries\u2014Sweden and Denmark\u2014also cut their rates, both by 3.7%.<\/p>\n In Southern Europe, tax rates mostly increased in 2024, particularly in Italy, Cyprus, and Spain. In Eastern Europe, the trend was mixed, with some countries seeing increases while others remained unchanged.<\/p>\n Family situation matters<\/p>\n All the figures above are based on a single average wage earner without children. Personal average tax rates can vary significantly depending on family situation\u2014especially due to changes in personal income tax.<\/p>\n Generally, single individuals without children pay the highest income tax, while households with children tend to pay less, which lowers their average tax rate.<\/p>\nADVERTISEMENT<\/p>\nADVERTISEMENT<\/p>\nADVERTISEMENT<\/p>\n