Tax rates vary hugely between countries. When it comes to personal income tax, some countries have flat rates regardless of income size, while others have progressive rates. But while some progressive rates start from 0%, others start much higher (like in Belgium, from 25%). Some countries have very gradual rates that increase by fractions of percent (like in Germany), while others have just two or three tax rate brackets (like Czechia, Poland or Sweden). That makes it extremely complicated to compare where tax rates are the most interesting as the answer differs depending on how much one earns. To sidestep this problem, I have analysed effective tax rates for:
For example, Malta and Cyprus are the most interesting countries for someone earning the minimum wage, as the tax rate is 0%. On the other hand, for someone earning a salary in the national average or a higher salary, Bulgaria and Romania are the most advantageous thanks to their flat rate of 10%.
Belgium is the worst country for taxation. Its tax rate is consistently the highest for low, medium and high salaries. Only Sweden has a slightly higher rate (52% instead of 50%) for high incomes, but has a much lower fixed rate of 32% for other income brackets.
The United States has average tax rates. Its 12% tax on minimum wages is favourable, although the minimum wage in the U.S. is half of that of the UK or Germany.
Remarks
The table below is sorted by tax rate for the average national salary.
Sources
- the minimum wage in the country (which of course varies a lot between countries)
- the gross average annual salary in each country
- an annual income of €100,000
- an annual income of €200,000
For example, Malta and Cyprus are the most interesting countries for someone earning the minimum wage, as the tax rate is 0%. On the other hand, for someone earning a salary in the national average or a higher salary, Bulgaria and Romania are the most advantageous thanks to their flat rate of 10%.
Belgium is the worst country for taxation. Its tax rate is consistently the highest for low, medium and high salaries. Only Sweden has a slightly higher rate (52% instead of 50%) for high incomes, but has a much lower fixed rate of 32% for other income brackets.
The United States has average tax rates. Its 12% tax on minimum wages is favourable, although the minimum wage in the U.S. is half of that of the UK or Germany.
Remarks
- Nordic countries and Italy have no minimum wages, so I indicated the lowest tax rate available.
- Some countries apply different tax rates depending on marital status and/or number of children. In such cases I chose an intermediary situation (married without children).
- Switzerland has different tax rates for each of its 26 cantons as well as by municipality. The example is for Zurich. Denmark has applies different tax rates by municipality, so Copenhagen was chosen here.
The table below is sorted by tax rate for the average national salary.
| Country | Minimum wages (in US$) | Tax rate for min. wages | Average wages (in US$) | Tax rate for average wages | Tax rate on income of €100,000 | Tax rate on income of €200,000 |
| Bulgaria | 5,950 | 10% | 9,696 | 10% | 10% | 10% |
| Romania | 8,654 | 10% | 13,472 | 10% | 10% | 10% |
| Poland | 11,192 | 12% | 16,114 | 12% | 32% | 32% |
| Switzerland (Zurich) | 29,016 | 5% | 92,552 | 13% | 13% | 23% |
| Hungary | 9,184 | 15% | 13,667 | 15% | 15% | 15% |
| Czechia | 8,683 | 15% | 18,869 | 15% | 23% | 23% |
| Malta | 11,245 | 0% | 18,000 | 15% | 35% | 35% |
| Greece | 11,070 | 8.71% | 19,486 | 15.15% | 40.38% | 46.69% |
| Israel | 19,690 | 5.30% | 40,220 | 17.20% | 34.40% | 41.60% |
| Slovakia | 9,914 | 19% | 17,407 | 19% | 25% | 25% |
| Estonia | 10,578 | 20% | 19,802 | 20% | 20% | 20% |
| Croatia | 7,075 | 20% | 16,715 | 20% | 30% | 30% |
| Latvia | 8,799 | 20% | 15,631 | 20% | 31% | 31% |
| Lithuania | 13,899 | 20% | 19,538 | 20% | 20% | 32% |
| Cyprus | - | 0% | 27,433 | 20% | 35% | 35% |
| Japan | 16,166 | 10% | 41,360 | 20% | 40% | 40% |
| Ireland | 28,302 | 20% | 56,179 | 20.23% | 33.67% | 42.83% |
| Norway | - | 22% | 62,970 | 22% | 22% | 23.90% |
| United States | 15,080 | 12% | 69,391 | 22% | 24% | 32% |
| Luxembourg | 32,103 | 19.80% | 74,746 | 23.80% | 23.80% | 24.70% |
| France | 24,259 | 11% | 43,394 | 30% | 41% | 45% |
| Spain | 17,457 | 24% | 30,242 | 30% | 45% | 47% |
| Finland | - | 12.64% | 48,740 | 30.25% | 44% | 44% |
| Denmark (Copenhagen) | 31,200 | 31.20% | 68,413 | 31.60% | 35.10% | 41.30% |
| Sweden | - | 32% | 48,762 | 32% | 52% | 52% |
| Slovenia | 17,079 | 26% | 29,936 | 33% | 50% | 50% |
| Italy | - | 23% | 31,906 | 35% | 43% | 43% |
| Portugal | 9,935 | 21% | 21,094 | 35% | 48% | 48% |
| Germany | 29,520 | 31% | 48,540 | 36% | 42% | 45% |
| Netherlands | 24,925 | 9.28% | 57,178 | 36.93% | 49.50% | 49.50% |
| Iceland | - | 31.45% | 70,350 | 37.95% | 46.25% | 46.25% |
| United Kingdom | 29,690 | 20% | 47,432 | 40% | 40% | 45% |
| Austria | 17,028 | 20% | 51,042 | 42% | 50% | 50% |
| Belgium | 24,005 | 40% | 52,232 | 50% | 50% | 50% |
Sources
- Minimum wages
- Gross average wages
- Tax rates: PWC Worldwide Tax Summaries (as well as the official tax calculators for countries with particularly complex systems, such as Denmark, Germany, Luxembourg, Greece and Israel).