- Niall McCarthy
Where The Tax System Takes The Biggest Bite Out Of Your Paycheck
The amount of tax and social security contributions docked from your paycheck depends heavily on your country of residence. The OECD has released the latest edition of its "Taxing Wages" report which looks at the net personal average tax rate across all of the organization's member states in 2018. On average, slightly more than a quarter of gross wages were devoured by tax and social security in OECD countries last year. Tax rates vary hugely between countries, depending heavily on earnings and family status.
At first glance, Belgians and Germans seem to get a raw deal on tax and social security with the system taking a 40% bite out of average wages in both countries last year. Depending on who you talk to however, Belgian and German workers are often quick to emphasize everything they get in return for the high rate of taxation including health insurance, pension plans, old-age care, unemployment benefits and no highway tolls. Elsewhere in Europe, income tax and social security account for 31.4% of gross Italian earnings on average while in France, the total share adds up to 28.7%.
Outside of Europe, Australians see their pay docked by nearly a quarter on average while in the United States, it all adds up to 23.8%. In Asia's economic powerhouses, Japanese workers pay a relatively low level of income tax at just 7.9% but a higher level of social security payments push the overall total up to 22.3%. In South Korea, the overall figure is less at just 14.9%, of which 6.4% is income tax and 8.5% is social security.
Courtesy : Forbes.com