If you are single and have no children in Germany, your tax burden is the highest. According to the OECD, the “fiscal wedge” was 47.9 percent last year. This refers to the proportion of labor costs that go directly to the State in the form of taxes and social security contributions. Important: The OECD does not calculate this rate based on your gross salary, but rather on the costs incurred by your employer. Therefore, employer social security contributions are included here. The actual tax burden for you as an employee is somewhat lower.

However, Germany ranks second among 38 industrialized and emerging countries for which the OECD collects data. Before us is Belgium, with a tax burden of 52.7 percent. Third place is occupied by our neighbor Austria with 47.2 percent. The OECD average is 34.9 percent, the EU average is 41.6 percent. Germany is clearly above average. The tax burden has already decreased here and around the world. Ten years ago we were still at 49.3 percent.

Social security contributions exceed taxes

Taxes are divided into two blocks. The income tax for middle-earning singles in Germany is 17 percent of gross income. It fell significantly, especially in 2023. Germany therefore ranks only 15th in the OECD comparison, even below the average of other EU countries and barely above the OECD average. The leader here is Estonia with 36 percent.

What makes work more expensive in Germany are social security contributions: they amount to 20.5 percent for employees and 20.0 percent for employers, each calculated on the basis of gross earnings. This means that, in the OECD comparison, Germany only occupies sixth place. In France, for example, social security contributions amount to 47.6 percent of gross income, which is significantly higher than in Germany, at 40.5 percent. Austria, the Czech Republic, Belgium and Slovakia also demand even more.

High social security contributions are always a double-edged sword. They are bad for those who have to pay them and also for companies. They make work more expensive, raising costs for businesses, and ensure that employees are left with net wages significantly less than their high gross wages than in most other countries. However, from a social perspective, high social security contributions have an advantage because they ultimately benefit the weakest in society. In Germany these are, first of all, pensioners, then people at risk of poverty, children, parents, disabled people, etc.

People with higher incomes are in better conditions internationally

All the figures mentioned so far only apply to single people without children with average income. It is interesting that, although Germany occupies second place in terms of tax burden for singles with only two-thirds of the average income (currently it would be around 2,900 euros gross), those who earn more always come out better off. Whoever earns 167 percent of the average income (currently about 7,200 euros per month) only pays the seventh highest tax burden in an international comparison. While the OECD average is increasing by 4.3 percent, the tax burden in Germany for top earners is only increasing by between 1.3 and 49.2 percent.

A similar picture emerges for couples and families. Although the tax burden here is among the first three in the world in all constellations, with or without children and in which both members of the couple work, families in which one of the members of the couple, generally The woman has no income. For them, the tax burden ranks only ninth in the OECD comparison and, at 33.1 percent, is around 14.8 percent below the figure for singles. Here you can see not only social benefits such as the child benefit, but also tax exemptions such as the child benefit and, above all, marital division.

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