The tax burden on workers across Europe—comprising income tax and employee social security contributions—shifted notably in 2024, with significant increases in some countries and reductions in others, according to the OECD’s Taxing Wages 2025 report and Eurostat data.
Together, income tax and social security contributions form the personal average tax rate, a key figure that reflects what portion of gross earnings workers lose to taxes. These rates vary widely by country and often adjust annually, directly affecting take-home pay.
Who pays the most?
In 2024, Belgium had the highest personal average tax rate in Europe at 39.7%, meaning nearly two out of every five euros earned went to the state. Other EU countries where the average tax rate exceeded one-third of gross income included Lithuania (38.2%), Germany (37.4%), Romania (36.9%), Denmark (35.7%), Slovenia (35.6%), and Hungary (33.5%).
Five additional EU countries surpassed the 30% threshold: Austria (32.7%), Luxembourg (32.1%), Croatia (30.9%), Italy (30.4%), and Finland (30.3%). In total, 12 EU member states saw workers giving up at least 30% of their gross income to taxes and social security contributions.
At the other end of the scale, Cyprus recorded the lowest personal average tax rate at 15.6%, followed closely by Switzerland, which also remained below 20%.
Other countries with rates under 25% included:
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Estonia – 20.5%
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Czechia – 21%
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UK – 21.4%
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Bulgaria – 22.4%
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Spain – 22.5%
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Sweden – 23.1%
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Poland – 24%
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Slovakia – 24.1%
Social security gaps drive tax differences
A major factor behind cross-country variation is the size of employee social security contributions. In Denmark, workers pay nothing into social security, while in Romania, the contribution rate reaches 29.9%, the highest in Europe. Slovenia follows with 23.6%.
Among Europe’s largest economies, Germany had the highest personal average tax rate in 2024 at 37.4%, driven largely by a high employee social security contribution rate of 20.7%. The UK, in contrast, had the lowest among the top five economies at 21.4%, due in part to a much smaller social security share of 5.9%. This results in a 16 percentage point tax burden gap between the two.
Biggest movers in 2024
While many countries experienced relatively minor annual changes—typically within ±2 percentage points—some recorded substantial shifts.
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Italy saw the sharpest increase, with its tax rate rising from 28.3% to 30.4%—a 7.5% jump, or more than 2 percentage points.
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Cyprus followed closely with a 6.9% rise.
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Slovenia, Estonia, and Czechia also reported increases of more than 4%.
Meanwhile, the most significant reductions came in:
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UK – down 8.6%
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Portugal – down 8%
Both countries reduced their tax burden by more than 2 percentage points.
Two Nordic countries also made noticeable cuts:
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Sweden and Denmark both decreased their rates by 3.7%.
Regional trends
Southern Europe saw an upward trend in tax rates in 2024, particularly in Italy, Cyprus, and Spain. Eastern Europe showed a more mixed picture, with some countries experiencing rate hikes and others holding steady.
