Where a pound of pay goes: the same salary taxed in thirteen countries, and the half of the bill nobody shows you

Every few months somebody publishes a list of the countries with the highest taxes, and every list measures something different: the top rate of income tax, or tax as a share of GDP, or the OECD's tax wedge. None of them answers the question a person actually asks, which is what happens to my pay. So we built a calculator. It takes four salaries, £25,000, £45,000, £80,000 and £150,000, converts them at the European Central Bank's rates of 7 October 2026, and runs each through the 2026 rules of thirteen jurisdictions: England, Ireland, France, Germany, the Netherlands, Spain (Madrid), Italy (Rome), Sweden, Denmark, Texas, California, Australia and Ontario. It counts income tax at every level of government, the worker's compulsory contributions, the employer's compulsory contributions, and VAT or sales tax on a fixed basket of spending, for a 'spender' who spends all of take-home pay and a 'saver' who spends 60% of it. The person is single, has no children, and claims nothing beyond what everyone gets. Every rate and its source are in the attached appendix, and the calculator reproduces the OECD's 2025 tax wedge for Britain to the decimal point.²⁷²¹

The bill on £45,000

The chart is the whole argument. Line the thirteen up on the £45,000 salary, count all four taxes, and divide by what the employer actually pays out, salary plus employer contributions. Italy takes 56.9%, France 55.1%, Germany 52.3%, Spain 51.0%, Sweden 49.4%. A second group follows: the Netherlands at 45.1%, Denmark 44.3%. Then a third: Ireland 37.0%, England 36.2%, Ontario 35.0%. Then the places that barely have employer contributions or a consumption tax worth the name: California 28.2%, Australia 25.2%, Texas 24.1%. Switch to the saver, who spends 60% of take-home pay, and every number drops two or three points; the order changes only where two neighbours were within a point of each other. Change the salary and it barely moves: Italy is first at £25,000, £45,000 and £80,000 and third at £150,000, where Sweden's 20% state tax takes it to the top at 63.5%; Texas is last at every level; England is eighth or ninth at every level.

To read the chart the right way round: the percentage is the slice of everything the employer pays out, salary plus employer contributions, that ends up with the state. It is not the slice of your salary. Take the English worker on £150,000, where the figure is 51.8%. The employer pays out £171,750: the salary and £21,750 of employer National Insurance. The worker pays £53,703 income tax and £5,011 National Insurance and takes home £91,286, which is 61% of the salary. Spend all of it and about £8,585 goes in VAT, leaving £82,701 of goods and services, 55% of the salary. Add up the four taxes and £89,049 of the £171,750 has gone: 51.8%. Measured against the salary alone, the taxes the worker sees come to 44.9%, and the payslip deductions alone to 39.1%. The same three readings exist for every country in the table, and the appendix gives all of them.

What the percentages are made of differs more than the totals. In England the £45,000 worker pays £6,486 income tax and £2,594 National Insurance, keeps £35,920, and pays about £3,378 in VAT if all of it is spent; the employer adds £6,000. In France the same salary is €53,163. The worker's income tax is only €4,872, because France taxes households gently and the first €11,600 is free, but €11,093 goes in contributions and the CSG, and the employer pays €21,306 on top, so a job that puts €37,198 in the worker's pocket costs €74,469. In Germany the worker's contributions, €11,563, exceed income tax, €7,595, and take-home pay is 64% of gross. In Italy income tax is the heaviest in the euro area at this salary, €14,625 including the regional and Rome surcharges, and the employer adds €16,800 and a further €3,674 of severance accrual that is deferred pay rather than tax. Texas is the mirror image: $4,950 federal income tax, $4,546 of Social Security and Medicare, $4,831 from the employer, about $1,135 of sales tax, and 84% of gross in hand; California adds $1,768 of state income tax and a 1.3% disability contribution.^{3891015141819212047}

Low pay and high pay

The user of a tax system is the worker, and the worker does not see the employer's share. Count only what appears on the payslip and the till receipt, income tax, the worker's own contributions and VAT, as a share of gross pay, and the ranking changes shape. Denmark is first at £25,000, £45,000 and £150,000, at 40.8%, 44.0% and 53.5%, because almost all of its labour taxation is on the payslip: an 8% labour-market contribution, a 12% state tax, a 25% municipal tax, and nothing of substance from the employer. Italy is second, Germany third. England is tenth of thirteen at £45,000, at 27.7%, and ninth at £150,000, at 44.9%. At the bottom of the pay scale England is lighter still. The £25,000 worker pays £2,486 income tax and £994 National Insurance and keeps 86% of gross; add VAT on every pound spent and the worker sees 22.0% go, less than any European country here except Ireland, at 20.8%, and less than Ontario. At £150,000 the English worker pays £53,703 income tax, £5,011 National Insurance and about £8,585 VAT: 44.9%, level with Spain and below France at 47.4%. The personal allowance withdrawn above £100,000 is why: between £100,000 and £125,140 the marginal rate is 62%.⁴⁵¹⁷

Two countries climb the table fastest as pay rises. Ireland is the lightest in Europe at £25,000, where tax credits of €4,000 and a 20% band wipe out most income tax, and sixth-heaviest at £150,000, where 40% income tax from €44,000 and an 8% Universal Social Charge above €70,044 take 38.5% of gross in income tax alone. The Netherlands goes from 34.9% of employer cost at £25,000, with its labour credit at full strength, to 54.7% at £150,000, when the credit is gone and the 49.5% top rate applies. Germany moves the other way at the top: its contributions are capped at €69,750 for health and €101,400 for pensions, so above those the marginal rate falls, and the German bill at £150,000, 53.8%, is lower than at £80,000. Sweden, Denmark and England have no such ceilings on the main taxes and keep rising; Ireland's PRSI, 4.2% rising to 4.35% this month, has none either.⁶⁷¹¹¹⁰

The hidden half

The reason the two rankings differ so much is the employer's contribution, which in continental Europe is the largest single item. On the £45,000 salary French employers pay 40.1% of gross on top of it, Italian 31.6%, Swedish 31.4%, Spanish 30.6%, German 21.3%, Dutch 18.3%. England's 15% employer National Insurance above £5,000 works out at 13.3%, Ireland's PRSI at 11.2%, the American payroll taxes at 8.1%, Ontario's Canada Pension Plan and employment insurance at 7.3%. Denmark's employer pays a flat DKK 2,376 a year, 0.6%, and Australia's pays nothing except, for large firms, a state payroll tax of 5.45% in New South Wales that we show separately. The OECD counts all of this as a tax on labour, and says so in the method notes of Taxing Wages: the report 'shows only the formal incidence of taxes on employees and employers. The final, economic incidence of taxes may be quite different, because the tax burden may be shifted from employers onto employees and vice versa.' The British forecasters are blunter about which way it shifts. When employer National Insurance rose from 13.8% to 15% in April 2025 and the threshold fell from £9,100 to £5,000, the Resolution Foundation wrote that 'the OBR assumes three-quarters of this tax increase will ultimately be funded by employers squeezing pay'; the Oxford Centre for Business Taxation, citing the OBR, put it at 60% at first and 76% over time; the IFS's first response was that the increases 'are of course largely incident on wages'. The OBR's March 2026 forecast describes 'the gradual pass-through of more of last year's rise in employer National Insurance contributions' into lower real pay growth. On that reasoning the employer's share is the worker's money by another route, and the first ranking, not the second, is the one that measures what a job costs the person doing it.^{8131612326133343530}

The employer's share is also where the British numbers moved most. The OECD's 2025 edition records the tax wedge on a single worker at the average wage, £55,983 in its series, at 32.4% for the United Kingdom, up 2.45 percentage points in a year, 'the largest increase' in the OECD, 'partly due to an increase in employer social security contributions and partly a result of fiscal drag'. Of the 2.45 points, 1.77 were employer contributions, 0.98 income tax, and employee contributions fell 0.31 as the main rate was cut to 8%. Even so the British wedge sits below the OECD average of 35.1%, far below Germany at 49.3% and France at 47.2%, and in the same band as Ireland, Canada and the United States. Our calculator, run at the OECD's own average-wage levels, gives 32.4% for Britain and reproduces every other country within about two points; the exceptions are explained in the appendix.¹²

Spenders and savers

The reader who asked for this piece wanted VAT counted, on the reasonable ground that a tax paid at the till is still a tax. It matters less than it looks, for two reasons. The first is that headline rates overstate what people pay. Our basket puts a quarter of spending on rent, which is exempt from VAT everywhere, 15% on food at home, which is zero-rated in Britain, Ireland, Australia and Canada and reduced almost everywhere else, 5% on domestic energy, charged at 5% in Britain, 7% on restaurants, 3% on hotels, 5% on road fuel and 40% on everything else at the standard rate. On that basket the English worker's VAT is 9.4% of spending, not 20%; Ireland's 9.9%, France's 10.0%, Germany's 9.6%, the Netherlands' 11.0%, Sweden's 12.7% and Denmark's 15.0%, because Denmark has a single 25% rate with no reductions at all. Australia's GST takes 5.5% of spending, Ontario's HST 6.9%, and the American sales taxes, which exempt groceries, utilities and most services, 2.3% in Texas and 2.6% in California. The second reason is that consumption taxes vary less between countries than labour taxes do, so they shift the levels and leave the order alone: the saver's ranking matches the spender's in every column but one.³⁶²¹²²

Inside Britain the ONS does the same sum for real households, from survey data rather than a model, and its answer for the financial year to March 2024 is the most important number in this piece for anyone who thinks of VAT as a side issue. Across all households VAT took 7.9% of spending. But because poorer households spend all they have and richer ones do not, indirect taxes took 21.0% of the gross income of the poorest fifth and 7.5% of the richest; VAT alone took 9.6% at the bottom and 3.7% at the top. Direct taxes run the other way, 15.7% of gross income for the poorest fifth and 28.8% for the richest. Add them and the line is a U: 36.7% of gross income at the bottom, 30.7%, 30.2%, 31.7% through the middle, and 36.2% at the top. The ONS also imputes employer National Insurance to the households whose spending ultimately funds it, which is the same incidence argument in official form.²⁸²⁹

Where Britain is going

The ranking is a snapshot of 2026, and the British numbers are moving. The OBR's March forecast has the tax take rising 'from 34.5 per cent of GDP in 2024-25 to a peak of 38.5 per cent of GDP by the end of the forecast period', in 2030-31, 'a historic high and a 5.6 per cent of GDP increase on the pre-pandemic level'; personal taxes supply 2.4 of the 3.9 points, 'primarily due to earnings growth combined with the freeze to personal tax thresholds until April 2031'. The November 2025 Budget extended that freeze by three years, to April 2031, for the personal allowance, the higher-rate threshold, the National Insurance thresholds and the employer's secondary threshold, and raised the rates on dividends, savings and property income by two points. Who pays is already concentrated. HMRC's July 2026 projection has the top 1% of taxpayers, those on more than £225,000, paying 26.8% of income tax in 2025-26 and the top 10%, above £71,500, paying 58.6%; the bottom half pays 10%. Those shares are a little lower than their 2021-22 peak, because the freeze pulls more low earners into the net faster than it raises the bills at the top. For scale, the OECD's revenue statistics for 2024 put all taxes at 45.2% of GDP in Denmark, 43.5% in France, 42.8% in Italy, 41.4% in Sweden, 38.0% in Germany, 34.9% in Canada, 34.4% in Britain, 25.6% in the United States and 21.7% in Ireland, whose GDP is inflated by multinationals.^30323142

The others are moving the other way. Ireland's budget of 6 October 2026, two days before this piece, widened the standard-rate band by €2,500 and raised the main tax credits by €125 from January, which will take the Irish £45,000 worker's income tax down by about €750. Australia's 16% rate on income between A$18,200 and A$45,000 became 15% on 1 July 2026 and falls to 14% in July 2027, with a new A$250 offset for every worker from 2027-28. Canada's lowest federal rate fell from 15% to 14% in July 2025. The United States made its 2017 brackets permanent in July 2025 and added deductions for tips and overtime. Germany raised its tax-free allowance to €12,348 and its contribution ceilings, but its wedge still rose 1.34 points in the OECD's table because contribution rates went up and thresholds lagged wages; Italy's fell 1.21 points on larger reliefs for average earners. The Tax Foundation's own 2026 model of Europe, built differently, puts Belgium at the top at 50.8% and Britain at 29.2%, three points below the OECD's figure, which is a reminder that every method has a margin.^{402423251810141}

What the money buys

A tax table is half of a bargain. The other half is harder to put in a column, but the OECD's pension model and the countries' own health rules give a sketch. Pensions at a Glance 2025 projects what a full-career average earner starting work now will receive from mandatory schemes, net, as a share of net earnings: 96% in the Netherlands, 86% in Spain, 79% in Italy, 77% in Denmark, 70% in France, 66% in Sweden, 54% in Britain, 53% in Germany and Australia, 51% in the United States, 45% in Canada, 34% in Ireland. The order is roughly the order of the tax table, with exceptions in both directions: Germany taxes like Italy and pensions like Britain, and Ireland's light wedge at low pay comes with the lowest replacement rate of the twelve and GP charges for most adults. The retirement ages the model assumes are not small print: 74 in Denmark, 70 in Italy, the Netherlands and Sweden, 68 in Britain, 65 in France, Spain and Canada.³⁶

Health is where the wedge is least reliable as a measure of what people pay. Britain, Ireland, Spain, Italy, Denmark, Sweden, Canada and Australia fund care from general taxation, Australia with a 2% Medicare levy inside income tax and a surcharge of up to 1.5% on higher earners without private cover. France and Germany fund it from the contributions in the table: Germany's statutory insurance costs 14.6% of pay plus an average supplement of 2.9% in 2026, split between worker and employer. Two countries put the main bill outside the tax system. In the Netherlands every adult buys compulsory basic insurance from a private insurer, at an average €1,884 a year in 2026 with a €385 excess, and the employer pays a 6.10% income-related levy on top; the OECD leaves both out of its wedge, and we put both in, which is why our Dutch figure runs five to seven points above the OECD's. In the United States 54% of people are covered through an employer: the average 2025 premium was $9,325 for single cover and $26,993 for a family, of which workers paid 16% and 26%. None of that appears in the Texas and California columns, and a family's share of it, about $7,000, would add more to the American bill than the state's entire sales tax.^{4443484546373812}

Prices complete the picture. The OECD's 2024 comparison puts household consumer prices in Britain at 106 against an OECD average of 100: cheaper than Denmark at 120, Ireland at 116, Australia at 115 and the United States at 122, dearer than France at 95, Germany at 93, Italy at 83 and Spain at 78. Eurostat's 2025 figures tell the same story against the EU: Britain 123, Denmark 140, Ireland 136, Spain 92. The Spanish and Italian workers who give up half of what their employers pay are buying in markets a fifth to a quarter cheaper than the British; the Danish worker who keeps 56% at £45,000 is buying in one that is 13% dearer.³⁹⁴⁹

What this can and cannot tell you

The calculator can tell you what a given pay packet attracts in tax under 2026 rules for a standard case, and it can be checked: every rate, its source and its status are in the appendix, and the whole model is reproduced against the OECD's 2025 figures at the OECD's own wage levels, matching Britain exactly, Ireland, Germany, Spain, Italy, Sweden and Denmark within a point and a half, and the rest for stated reasons. It cannot tell you what a family pays, because child benefits and joint taxation change the answer in every country; or what a particular person pays, because pension saving, student loans, church tax, council tax, property taxes and the excise duties on fuel, alcohol and tobacco are all left out, and the last of those understates consumption taxes most in Britain and the Nordics. Several rates are drawn from official publications rather than read from the authority's page on the day, because the Australian, Irish, Swedish and some Italian and French tax sites block automated readers; each is flagged, and the cross-check is the test of whether they are right. Where a 2026 parameter was not yet published the latest was used: France's scale for 2025 income, Spain's 2024 scales, California's 2025 schedule, Sweden's 2025 thresholds with a 2024 credit formula that slightly overstates Swedish income tax. Local rates are those of Madrid, Rome, Texas, California and Ontario, and the national average municipal rates of Sweden and Denmark; move to Catalonia, Milan or New York and the figures move with you. The ranking is what the rules say. Whether a country's taxes are high depends on what you think they are buying, and on who you think is paying the half that never appears on the payslip.²¹