Social security tax rates in Europe 2024

In most European countries, social taxes include contributions to pensions, health insurance, unemployment insurance, and other social programmes. The size of these taxes, as well as the share of distribution between employee and employer, varies substantially from one country to another.

General Trends

• Employee-employer split: Social contributions in most European countries are split between employee and employer. The share of the employer is larger than that of the employee.
• Percentage of wages: Social contributions as a percentage of wages also differ. Whereas in some countries the total amount may reach 30-40 per cent of gross wages, it is less in others.

Some Country Examples

• Germany: In the case of Germany, social contributions refer to health insurance, pension insurance, unemployment insurance, and care insurance. These contributions are shared almost equally by the employee and employer.
• France: The level of social contribution is higher in France compared with most European countries, with a large amount being shared by the employer.
• UK: Instead of the traditional system of social taxation, UK uses National Insurance, where both employee and employer contribute in equal shares.
• Spain: Social contributions in Spain comprise unemployment insurance, pension insurance, and health insurance. Most of the contributions come from the employer.

Below, lawyers, auditors, and tax advisors from Regulated United Europe would like to take a close look at the social tax rate of each European country, as well as at the specifics of its payments.

Social tax in Albania 2024

In 2024, the social insurance rate in Albania remained the same: 24.5 %. This rate is divided between companies and employees: companies pay 15 % and employees pay 9.5 %. These data show that the social insurance system in Albania is stable at the moment.

Central Tax Administration in Albania

Social tax in Latvia 2024

Within the system of social taxation of Latvia in 2024, there is a tax that should be paid both by the employer and the employee. The total rate of social payments makes 35.09%. The contribution of the employer is 24.09% while the employee pays 11% of this amount. Thus, the lion’s share of social contributions falls on the employer, though the contribution of the employee is not insignificant.

It is also worth mentioning that social contributions withhold a share of wages. For instance, for self-employed citizens, the tax rate takes 31.13% of the minimum wage, while for those with voluntary payments, the rate is 24.54%.

These data show the general picture of social taxation in Latvia for the year 2024, but for more detailed information, and in cases where an individual case is considered or changes are made to legislation, consult official sources or contact Latvian tax law professionals.

Latvia State Revenue Services

Social tax in Andorra 2024

According to 2024 information, Andorra has structured its taxation system in such a way that it provides low tax rates to be of interest to investors and businesses. There are the following main types of taxes in Andorra:

1. IRPF income tax reaches a maximum rate of 10%. Tax-free amount of the first 24,000 euros of income, 5% on the subsequent 16,000, and above 40,000, it will be a 10% rate. One of the lowest levels of income tax exists in Europe.
2. Corporation tax – IC – is 10% of the profit. For new businesses billing less than €100,000 in the first three years, a rate applies of 5% on the first €50,000.
3. Indirect general tax – IGI, the analogue of VAT in Andorra – standard rate of 4.5%. Reduced rates of 1%, and an ultra-low rate of 0%, as well as a special rate of 9.5% for banking and financial services.

Other more specific taxes are those levied on the transfer of real estate and other municipal taxes.

As far as social contributions go, it does not provide an exact rate and distribution between the employee and employer for the year 2024. It is assumed, however, based on the general tax policy of the country, that even social contributions come at very small rates compared to other countries in Europe.

Impostos i taxes

Social tax in Liechtenstein 2024

The Liechtenstein tax system is characterized in 2024 by relatively low rates and ease of administration. Among the particular taxation features of Liechtenstein, one would note the corporate income tax, which equals 12.5 percent of business revenue, with a minimum tax of CHF 1,200. This includes both companies operating in Liechtenstein and registered companies with no business operation. The Value Added Tax is 7.7 percent, representing the standard rate, reduced rates perhaps applying for certain goods and services.

Taxation of individuals in Liechtenstein also has its own peculiarities. Personal income tax is fixed at the state and local levels, and the rate can differ depending on the taxpayer’s place of residence. The general income tax rate may range from 2.5 per cent to 22.4 per cent. Liechtenstein also has a preferential taxation system for foreign residents who are not allowed to work in the country and who meet certain requirements.

Business and Working Hub Liechtenstein

Social tax in Lithuania 2024

The following features are typical of social taxation in Lithuania in 2024:

Individual tax rates: There are different tax rates depending on the source of personal income. Opposed to employees, personal income tax is levied on salary and it equals 15%. In addition, a surtax on health insurance is payable at 9%; of this 6% is payable by the employee and 3% by the employer. Statutory social contributions include 30% of salary for pension and unemployment insurance; the employee pays 4%, the balance is paid by the employer. The social contributions by the self-employed persons amount to 5 to 15 percent, depending on the profit earned.

Minimum object of compulsory social insurance contributions: For 2024 the minimum on which the employer has to pay the minimum tax for employees to the VID is €1,860 per quarter.

Ministry of Finance of the Republic of Lithuania

Social tax in Austria 2024

In 2024, within the Austria country, the total social contributions are shared between employee and employer, thus being 18.12 per cent paid by employee and 21.23 per cent contributed by employer. The contributions referred to include health care, unemployment, pensions and accident insurance. For example, 7.65% to health care, with the employee paying 3.87% and the employer 3.78%, 6% to unemployment, equally split between employee and employer, 22.8% to pensions, of which the employee pays 10.25% and the employer 12.55%, and 1.2% to accident insurance, paid solely by the employer.

Austria Tax Authority

Social Tax in Luxembourg 2024

In Luxembourg, during 2024, social contributions are shared by the employee and the employer. Employees of firms should contribute to the budget the social contributions, usually deducted by the employer. The pension fund is contributed 8 percent of salary while the sick pay fund is allotted 3.05 percent. The exact rates of interest are subject to the specific conditions of the employment contract and may vary. For more detailed information concerning social contributions in Luxembourg, please contact official sources or tax law specialists practicing in the country.

Luxembourg Inland Revenue (ACD)

Malta – social tax 2024

In Malta, for 2024, the social contribution paid by an employer and employee amounts to 10 per cent of salary. Salaries above €27,679 annually the fixed contribution is €53.23 per week if the employee was born after 1 January 1962. In the case of the self-employed, social tax was 15% of the net annual income from the previous year and the maximum contribution for those who were born after 1 January 1962, was €79.84.

Malta Tax and Customs Department

Social tax in Belgium 2024

In 2024, Belgium’s social security system is still complex and multilayered; it involves numerous contributions and benefits regulated at both the national and local levels. Social contributions in Belgium cover a wide range of social guarantees, including pension, health insurance, unemployment benefits, and other forms of social support.

In the case of individuals in Belgium, different percentages for income tax depend on the amount for which income tax has to be paid in 2024, such as 25% for earnings up to €15,200 and 50% for earnings above €46,440. These are progressive rates referring to the so-called taxable income, which is calculated after deducting the social contributions, personal allowances, and professional expenses.

To qualify for social security in Belgium, it is required to be registered with one of the special organizations or the Belgian health insurance company. These organizations operate as gathering agencies for the national social security funds.

Belgium has mutual social security treaties with many countries and foreigners are therefore entitled to the same benefits as Belgians when working in Belgium, granted they fulfill some requirements – such as registering in the local municipality or obtaining the relevant visa.

General Administration of Taxes

Social tax in Montenegro 2024

In 2024, Montenegro continued to bring its tax system into line with European standards, which is relevant in the context of the country’s desire to join the European Union. The tax reform, initiated at the beginning of 2022, brought changes both for physical and legal persons and made the system more appealing both for the domestic investor and foreign ones.

Personal income tax

• In addition, Montenegro has adopted a progressive personal income tax rate that is among the lowest in Europe at a range of 9% to 15%.
• Similarly, the introduction of a non-taxable income base at about €700, one of the biggest in Europe, allows income below this amount to be exempt from taxation, reducing the tax deductions burden of citizens by about 1.5 times.
• Cancellation of compulsory health insurance contributions: Another decision taken in the framework of the reform was the abolition of compulsory health insurance contributions, which significantly lightened the financial burden on physical and legal entities while simultaneously increasing access to medical services.

These changes have made Montenegro more attractive for business and investment, contributing to economic growth and an improved investment climate. The country tries to meet the international standards in establishing a favourable business environment for entrepreneurship while keeping its tax system fair and transparent with low tax rates.

Montenegro Tax Administration

Bulgarian social tax 2024

The system of taxation for natural persons in Bulgaria for 2024 does not include any change in the value of the income tax rate, 10 per cent of the base of assessment. Within Europe, this is one of the lowest income tax rates, and the tax system for Bulgaria is quite attractive both for local employees and investors as well as for foreigners.

Tax return filing in Bulgaria is annual, and it allows the taxpayer to adjust the taxes and/or social security contributions according to income earned in the previous year, including legally recognized expenses that may be deducted from total income, thus reducing the tax base and, as a consequence, the amount of tax payable. Simultaneously, legally admitted expenses for certain categories of activities can be estimated as high as 25% or 40% of the income and thus pay less tax.

The social insurance rate in Bulgaria for the year 2024 is 33.4%, obligatory contribution to cover different types of social security, such as pensions, health insurance, unemployment insurance. These are divided between the employee and the employer accordingly to provide social protection to the denizens of the country.

Tax returns in Bulgaria are filed between 10 January and 30 April of each year for the previous year. There is a possibility for both electronic and paper declarations to be submitted through the official channels of the National Revenue Agency. One of the main benefits from submitting the declarations electronically is that the declaration form will be pre-filled, which will facilitate the declaration process.

National Revenue Agency

Social tax in Netherlands 2024

With the start of the year 2024, there are new changes to tax law which apply to employees and employers in the country. The minimum salary for people above the age of 21 increases to €1,934.40 per month. This is a major development concerning the country’s economic and tax environment, showing the effort of the government to enhance the financial status of an employee.

For example, the income tax rate for income up to EUR 73,031 a year has slightly decreased from 37.07 percent in 2022 to 36.93 percent. The second example is the increase in the so-called “arbeidskorting”. All working persons, whether they be employees or entrepreneurs, are entitled to this tax rebate. The tax rebate reduces the income tax percentage and increases the amount “in hand”. In particular, an increase of about €500 is estimated for the income tax rebate in cases where the annual income does not exceed €115,301.

Another improvement involves non-taxable compensation for commuting expenses, whose limit increased from €0.19 to €0.21 per kilometre. Both were changed to increase wages progressively for most employees.

It is also stated that the retirement age has been increased by a minor margin to 66 years and 10 months for individuals as of 1 January 2024. This forms part of the alignment and evolution of the pension system in relation to changes in demographics.

Tax and Customs administration of the Netherlands

Social Contributions in Croatia 2024

In 2024, Croatia launched a number of novelties in the field of taxes. Most of the changes aimed at simplifying the system and alleviating the burden of the taxpayers, stimulating employment and entrepreneurship, and enhancing social justice and solidarity. These changes will take effect from 1 January 2024. The main changes concern the abolition of the city tax on all kinds of income paid by municipalities, previously between 0% and 18%, and the modification of the rates applicable to income tax. Other innovations also include an increase in the basic personal allowance and threshold for applying the increased rate of income tax, and a reduction in the base for the first tier of pension insurance in respect of certain gross salaries. Individuals with gross salaries up to a specific level will receive considerable tax relief.

The income tax rate for individuals in Croatia in 2022 was 30%, while the social insurance rate in 2024 was 36.5%. These rates have shown evidence of a general trend toward a lower tax burden and higher social benefits with a view toward improving working and living conditions in the country.

Croatia Tax Administration

Social tax in Norway 2024

In its turn, the personal income tax rate in 2024 in Norway was established to be 38.2 per cent. Besides, in 2022, the social insurance rate in Norway equaled 22.1%. Both can be considered the testimony of the main approach of the country to establishing the general tax burden in general, which is targeted at the social protection and financing of the public services.

The Norwegian Tax Administration

Social tax in Cyprus 2024

In Cyprus in 2024, social insurance, health care contributions (GESY), and income tax play a key role in payroll taxation for both employees and employers.

Distribution of social tax between employee and employer

Social insurance: The employee’s social insurance contribution is at 8.3% of his/her salary, provided the basic salary is within the amount of EUR 5,005. Should the basic salary be higher than that, the contribution will be the fixed amount of EUR 415.42.

GESY (health care system): He/She contributes to the GESY system by 2.65% of his/her basic salary.

Income tax: It is paid on a progressive scale starting from income above 19,500 euros. An example of a rate is 20% for income between €19,501 and €28,000, and then on an ascending scale.

% of social tax on wages paid

Let’s consider an example with the minimum possible salary of third-country employees being €2,500 a month (€30,000 a year):

• Social insurance: 207.5 euros a month,
• GESY: 66.25 euros per month
• Income tax: Determined on the basis of the tax base after deduction of social security and GESY contributions at the amount of €120.25 per month.

Thus, the net salary given to the employee is 2,160 euros.

On the other hand, from the employer’s side, the contributions will be: to the Social Insurance Fund-€207.5, to the Unemployment Fund-€30, to the Apprenticeship Fund-€12.5, to the Social Cohesion Fund-€50, to GESY-€72.5, with the total costs amounting to €2,872.5.

Benefits for foreign workers

Cyprus provides for benefits for employees who were foreign residents before the commencement of employment on the island, including tax deductions of 50% and 20% upon certain conditions.

This scheme encompasses Cyprus as one of the most attractive countries to work and reside in, taking into consideration the facilitation of opportunities regarding tax optimisation and the access to a number of incentives available for resident individuals and legal entities.

Cyprus Tax Department

Social tax in Poland 2024

In 2024, the tax system of Poland envisages several heads of tax both for natural persons and legal entities, including social contributions and income tax.

Social contributions

Social contributions in Poland are shared between the employee and the employer. Employees have to pay 8.3% of the salary to the Social Insurance Fund. Employees pay a flat rate of 2.65% of their basic salary toward the GESY health care system.

Income tax

The income tax in Poland is progressive, based on income earned by an individual:

• Income up to 19,500 euros is not taxed,
• Income from €19,501 to €28,000: 20%
• Income from €28,001 to €36,300: 25%
• Income from €36,301 to €60,000: 30%
• More than €60,000: 35%

In other words, the gross salary needs to be deflated to the tax base, from which social security and GESY deductions apply. Assuming, for example, that the gross salary is €2,500 per month, after deducting social security and GESY, an approximate net salary of €2,160 will go to the employee.

Taxes for employers

Employers also have to pay social contributions equivalent to 8.3% for the Social Insurance Fund, 1.2% for the Unemployment Fund, 0.5% for the Industrial Training Fund, 2.0% for the Social Cohesion Fund, and 2.9% for the GESY health system.

Tax benefits

It provides a number of tax incentives and subsidies to investors and entrepreneurs, such as reduced tax rates for SMEs and areas with special tax conditions.

Poland National Revenue Administration

Social tax in Czech Republic 2024

From a tax perspective, in 2024, the Czech tax system ensures multiple taxes and social contributions both from the company’s and employees’ sides. From the company’s taxation perspective, the substantial ones are income tax, VAT, social security, property tax, and road tax. The corporate income tax rate is 19%. VAT ranges from 15 to 21%, depending on the category of goods and services. Payroll tax entails pension and social contributions at 31.5%, health insurance at 13.5%, and income tax at 15%, making it approximately 60% of the total taxes payable in case a company has employees.

Income tax for individuals within the Czech Republic in 2022 stood at 23%. The social insurance rate, on the other hand, remained at 44.8% for 2024. These data indicate the importance of tax planning both for entrepreneurs and employees in the Czech Republic.

However, this overall tax burden of companies and individual entrepreneurs may be considerably reduced by a number of tax incentives and double tax treaties. The Czech Republic has signed over 80 such agreements, which underlines its commitment to creating a favourable tax climate for both local and foreign businesses.

Financial Administration of the Czech Republic

Social tax in Portugal 2024

In 2024, the tax system remains very diverse in Portugal both for individuals and companies, with income tax, social contributions, and various local taxes and levies. The major income tax rates are the following: for companies, 21% of the profit and 28% of dividends. For workers, the overall burden of taxes will include: income tax, with a scale ranging from 0 to 48%, plus social contributions of 34.75%, equally split between the worker.

It is relevant to notice that the system in Portugal involves deducting all kinds of taxes and contributions from the agreed amount and calculates the “in hand” salary of the employee. This means that within salary computation, it will include the consideration of taxes and social contributions, which are deductible in order to arrive at the net amount that shall be received by the employee. This is a system that requires exact planning and calculation by the employer to ensure the process is according to the expectations of employees and legislations.

Generally speaking, the tax system in Portugal is an elaborate arrangement; apart from income taxes and social contributions, it also includes several local levies and charges, such as value added tax (IVA), environmental taxes, and municipal tourist taxes.

Portuguese Tax Authority

Social tax in Denmark 2024

In Denmark, 2024, the social insurance system was mainly financed through taxes rather than by way of certain social contributions. Under the supplementary labour market pension scheme, employees and employers contribute to the ATP, whereby employees pay 1,135.8 DKK, while employers pay 2,271.6 DKK per year. Furthermore, employers contribute to the maternity fund, approximately 1,350 DKK, to work injury insurance, approximately 5,000 DKK, and to other public social schemes, approximately 5,300 DKK.

The Danish Tax Agency

Social tax in Romania 2024

In Romania in 2024, the amount of social tax and its distribution between the employee and the employer is as follows:

The total social tax comes to 37.25%, of which employees must account for 35% [10% health, and 25% social], with employers paying 2.25% for work accident insurance.

Health care tax of 10% – fully paid by the employee.

Pension insurance contributions account for 25% of salary, also payable by the employee. The employer does not pay any direct pension contributions.

Work accident insurance costs employers 2.25 per cent of payroll.

Additionally, Romania operates a flat income tax of 10% both for residents and non-residents and thus represents one of the most straightforward tax systems in Europe.

This social tax structure funds a large number of social programs: pensions, health care, unemployment and accidents at work.

Fiscal Administration of Romania

Social tax in Estonia 2024

For the year 2024 in Estonia, the following shall be the amount of social tax and its distribution between employee and employer:

• Social tax is 33% of the taxable amount of the income derived from labour activity and from entrepreneurship. This tax is used to finance pension insurance and public health care. All social tax shall be paid by the employer;
• The minimum of the mandatory social tax payment in 2024 is €654, which means that the minimum of mandatory payment per month is €215.82.
• Rates of the unemployment contribution are staying at the same level as last year: 1.6% for employees and 0.8% for employers.

Unsocial tax is to be paid:

• By employers based on income paid to employees;
• The individual entrepreneurs on the basis of their entrepreneurial income;
• By the state, municipalities or cities, in certain cases.

Social tax in Estonia is an obligatory constituent of the social security system destined to finance pension and health care services for the population. The amount and a mechanism for its calculation are defined by the legislation and include a compulsory payment from employers for their employees, as well as from individual entrepreneurs for themselves.

Estonian Tax and Customs Board

Social tax in Finland 2024

In Finland, the social insurance premium is shared by both the employer and employee. The headings include health insurance, pension insurance, and unemployment insurance. This is an obligatory payment and its purpose is to provide financing for the widespread social security system in Finland.

Employers’ social security contributions:

The health insurance contribution on the wage earner’s behalf for 2024 is 1.53 per cent.

Contributions to employer’s pension insurance varies according to the employer. The average percentage in 2022 was 17.39 per cent. It is an important part of the Finnish pension system that keeps the pension available for the employees.

Employer’s contribution to unemployment insurance is in a scale of 0.52 per cent of the total compensation, up to 2,251,500 euros and two-point zero six percent on that portion above the amount. This covers the employees against unemployment.

Group statutory employment accident insurance, group life insurance account for an average 0.57 percent and 0.06 percent of payroll, respectively, covering occupational accidents and illness, and life insurance benefits.

Stronger social security contributions to employees:

• Retirement insurance contributions as high as 7.15% for most employees, and 8.65% for employees falling in the age bracket between 53 to 62 years, ensure employees accrue pension rights by the time they actually retire.
• Health insurance contribution: 1.96%, comprises two elements: health care contribution of 0.60% plus a daily allowance contribution of 1.36%. The latter is exempt on salaries below €15,703 for providing sickness benefits.
• The unemployment insurance contribution by the employee amounts to 1.50 per cent and provides them with financial support in case of unemployment.

Social security contributions in Finland create a solid safety net both for employees and employers, when the insurance covers various aspects of social security like health, pensions and unemployment.

Finnish Tax Administration

Social tax in Macedonia 2024

In the Republic of North Macedonia, the modifications to the tax system were implemented in 2024. These were temporary ceasing from applying the progressive scale of taxation of personal income. From January 1, 2020, to December 31, 2022, the tax will be levied at a rate of 10% for profit on revenues from work and activities, copyright, proceeds from the sale of self-produced agricultural products, income from industrial property, rent, and gift rent, capital, games, insurance, and other revenues.

Public Revenue Office of the Republic of North Macedonia

Social tax in Serbia 2024

In Serbia in 2024, the social taxation system includes social insurance contributions payable both by employees and employers. Such contributions provide financing for pension and disability insurance, health insurance and unemployment insurance.

Employee Contributions:

Pension and disability insurance contributions: 14% of gross salary.

Health insurance: 5.15%

Unemployment insurance: 0.75%

Thus, the total amount paid by the employee from gross remuneration for social insurance accounts for 19.90%.

Employer Contributions:

• The rate of pension and disability insurance contributions is 10% of the gross salary of the employee.
• Health insurance is 5.15%. Thus, the overall cost for the employer consists of 15.15% of the employee’s gross remuneration, excluding fringe benefits in kind, such as food and holiday allowances.

Personal income tax:

• Income is subject to a progressive tax rate of 10% if the monthly income exceeds 21,712 RSD. In cases when income level is below or exactly this limit, tax is not charged.

Social contributions in Serbia in 2024 take 35.55% of the gross salary, which is as high as in most Western countries, but due to the lower level of salaries in Serbia, actual and maximum amounts payable would be much lower, making the country attractive to locate business within.

Ministry of Finance of The Republic of Serbia

Social tax in France 2024

Currently, the social tax system in France in 2024 involves health, maternity, disability and death contributions at 13% or 7%, old-age contributions amounting to 6.9% but no more than €3,666 and 0.4% of the total income of employees and 8.55% and 1.9% correspondingly for employers, insurance against work accidents, family benefits of 5.25% or 3.45%, as well as supplementary pension contributions. Social tax on the total of the gross wages for employees amounts to 19.90%, and for employers, it is different, including 15.65% plus all kinds of benefits.

France Tax Authority

Social tax in Slovakia 2024

In Slovakia in 2024, the total social contributions paid by employees amount to 9.4% of remuneration, and the maximum contribution is EUR 796.83 per month. The insurance contribution to employee health will be 4% of remuneration without any ceiling. From the side of employers, the social insurance contribution is 24.4% with a maximum of EUR 2,068.36 per month. Moreover, the employers pay work accident insurance contributions at the rate of 0.8% of total unlimited wages of their employees. Health insurance contributions by employers will be 10% of remuneration without any limit.

Financial Administration Slovak Republic

Social tax in Georgia 2024

The tax system of Georgia in the year 2024 was also based on the same backbone introduced earlier that aimed for simplicity and ease of doing business. An important feature of the tax policy in Georgia comes with the universal pension levy that came into force on 1 January 2019. The total level of the levy, 4-6% of income for each, is composed of 2% paid by him or her, 2% for salaried employees paid by the employer (or 4% in the case of self-employed persons having the right to waive the levy), and 0 to 2% based on state budget funding.

As for corporate and individual taxes, there is a 15% corporate income tax. However, special rates are applied in certain company categories; for example, companies with the status of an International Company are taxed at 5%, while companies with Virtual Zone entity status are taxed at a 0% rate. Income tax in Georgia is levied on the income of individuals at a flat rate of 20%. Currently, the VAT rate is 18%, and the excise tax is imposed based on the goods category.

Within these limits, the Georgian taxation system shows some adaptability and flexibility to the current economic situation, with the purpose of stimulating business development and investments. At the same time, the compulsory pension deduction underlines social responsibility for both employer and employee and is supported by the state.

Social tax in Slovenia 2024

In the year 2024, social tax in Slovenia is paid for the pension and disability insurance, compulsory health insurance, unemployment insurance and insurance against accidents at work and occupational diseases. The contribution is divided as follows:

• Pension and disability insurance: 15.50 per cent paid by the employee and 8.85 per cent paid by the employer.
• Compulsory health insurance: 6.36 per cent paid by the employee and 6.56 per cent paid by the employer.
• Unemployment insurance: 0.14 per cent paid by the employee and 0.06 per cent paid by the employer.
• To the account of insurance against accidents at work and occupational diseases, 0.53 per cent is payable by the employer alone.

In all, there are social contributions amounting to 16.1 percent of wages payable by the employer, with another 22.1 percent by the employee.

It has to be underlined that a general social insurance system prevails in Slovenia, offering old-age pensions, health insurance, unemployment insurance and any other type of social protection. All these social contributions are obligatory, deductible from employees’ wages and payable by employers to the competent State Funds.

Financial Administration of the Republic of Slovenia

Social tax in Germany 2024

In Germany, the social security system has contributions for health insurance, accident insurance, pension insurance, and unemployment insurance, where some rates are shared equally by both employer and employee. Overview based on information received:

Health Insurance

• Total 14.6% shared by employee and employer alike. Also, there is a special extra TK contribution of 1.2%, which is also to be divided between the employee and the employer. Hence, the total health insurance contribution rate is about 15.8%.
• Accident insurance is at 3.4%, with an additional contribution of 0.6% assessed on persons without children aged 23 and over. Accident insurance is also shared equally between employees and employers.

Pension Insurance

• Contributions into the pension insurance system are set at 18.6% of wages, equally shared by employees and employers.

Unemployment insurance

• Unemployment insurance is at the rate of 2.6%, contributed equally by employees and employers.

Impact of Increased Contributions Starting in 2024

As of this year, the limit rose to 59,850€ per year, and with it, the maximum amount of salary for calculating the health insurance premium base increased, thus automatically growing social contributions for employees whose salaries are higher than the mentioned limit. An automatic consequence is the growth in premiums for health and accident insurance. Yet, that is not all: the rate of supplementary health insurance also went up and furthered the whole cost for people whose salaries surpass the limit threshold.

About public pension and unemployment insurance, in turn, threshold adjustments mean higher contributions from those earning above the new limits of 87,600€ in West Germany and 85,200€ in East Germany for pension insurance. Unemployment insurance shares this adjustment increase in rate to 2.6% as well.

The Social contributions in Germany for 2024 are therefore important for both the employee and the employer as they affect net income and the cost of employment, respectively. Contributions are a source of financing for the social security system and give the right to benefits in health care, pensions, unemployment benefits, and long-term care.

Federal Central Tax Office

Social tax in Spain 2024

For 2024, Spain has changed some of the elements of the social security system, one of them being the intergenerational equity mechanism that provides for a contribution of 0.6% on the contribution base for general cases in all cases of registration or equivalent registration in the social security system, where there is an obligation to contribute for pension coverage. The indicated mechanism will be 0.70 percentage points for 2024, of which 0.58 corresponds to the company and 0.12 to the employee.

The maximum contribution will rise by 8.6% from the current 4,139.40 euros per month to 4,495 euros per month, which is 53,940 euros per year. It is the amount that workers and employers each month pay to Social Security regarding entitlements derived from the system: pensions, temporary inability to work, unemployment, among others.

Work-related accident and non-work accident benefits also come under social security in Spain. If you are temporarily incapable of working because of illness or an accident not arising from and in the course of work, you may be entitled to claim benefits if you are registered for social security and have paid contributions in the preceding five years for a period of 180 days. The rate of the benefit is based upon your degree of disability. During the first 20 days of sick leave, the benefit is 60 per cent of the calculation base, and from the 21st day on it shall be 75 per cent.

The Spanish Tax Administration Agency

Social tax in Greece 2024

In 2024, the Greek social security contributions will be oriented based on the social fund to which the employee is registered. The main social security fund, EFKA, has, for instance, 13.87% withholding from the employee and 22.29% from the employer. For EFKA, the maximum of social security contributions is €7,126.94 per month.

The changes that have come into effect as of January 1, 2024, include increasing the upper limit of employees’ salaries subject to social contributions from €6,500 to €7,126.94. For both employees and employers alike, this represents an additional monthly supplement of €227, given that the gross wage for one single month equates to or is over €7,126.94: €87 for the employee and €139 for the employer.

The new provisions under Greek law brought in by the Law 4997/2022 referred to social security, pensions, and labour law. Under this law, social security debts may be regulated and paid in instalments, from 2 to 24 equal monthly instalments, or up to 48 equal monthly instalments if they are audited debts. The incentives are also provided for conversion of the part-time contracts to full-time contracts, such as a state subsidy of social contributions for a period of one year from the date of conversion.

These amendments underline that it is very important to understand what the current structure of social contributions in Greece looks like, both for employees and employers, and what influence those changes might have on personal or corporate finances.

Independent Authority for Public Revenue (IAPR) of the Hellenic Republic

Social tax in Sweden 2024

In Sweden in 2024, employers pay social contributions of 31.42 per cent of total taxable wages (without a cap) in cash and in kind paid to Swedish employers or foreign employers with a permanent establishment in Sweden. Foreign employers without a permanent establishment in Sweden shall apply for registration of social contributions or may make an agreement with the employee that the latter pay and report the contributions themselves on a monthly basis. Depending on which of the said options is chosen, different rates apply.

On the employee’s side, a pension contribution of 7 per cent of gross income up to a maximum of SEK 599,250 – corresponding to a maximum contribution of SEK 41,948-is charged, which is normally fully accounted for as a tax credit on the employee’s tax return, i.e. the actual cost to the employee is usually zero.

Consequently, for 2024, the employees have a social contribution rate of 14 percent and employers have a rate of 31.42 percent, which gives a total of 45.42 percent.

These figures reflect the comprehensive approach of Sweden to social protection, encompassing an extensive range of benefits and services such as healthcare, unemployment benefits, family allowances, and pensions.

National Tax Board of Sweden (Skatteverket)

Social tax in Hungary 2024

In 2024, social contributions will be one of the main parts of the tax and labour obligations of employers and employees in Hungary. The basis for social contributions is the gross income of the employee. The employers’ contribution rate-the so-called “social tax”-is 13 per cent, while the employees’ social contribution rate is 18.5 per cent. The child tax credit can be applied, which decreases the social contribution liability by 15% of the unused amount of the child tax base out of the total social contribution liability of 18.5%:

As of 2024, the minimum wage is HUF 266,800 per month, and the guaranteed minimum wage for persons employed in jobs requiring at least secondary vocational or professional education is HUF 326,000 per month starting from 1 January 2024. The employers of Hungary shall pay all the social contributions and file the social security declaration electronically every month. For foreign employers who have no local representation, similar obligations exist, but on failing, the obligation shifts onto the employees.

Social benefits serve to reduce the cost of employing given groups of employees, including the unemployed, mothers with three or more young children, persons with disabilities, researchers, etc. In the case of employment of employees mentioned above, the employer may apply social benefits. The periods of eligibility of benefits and their exact amounts depend on the employee.

The social security system contribution an employee will pay for 2024 in Hungary includes a 7% health care contribution, a 10% pension insurance contribution and a labour market contribution of 1.5%: the basis is the gross wage of the employee. An employer in Hungary pays 18.5% in social contribution and 1.5% in education contribution. Social contributions in Hungary are not part of the determination of the taxable income for personal income tax – PIT.

This information shows that social contributions and taxes system is not an easy one in Hungary, and it is to be considered seriously both by local and foreign employers as well as employees.

Hungary National Tax and Customs Administration

Social tax in Iceland 2024

For 2024 in Iceland, individual taxation is based on a progressive state income tax rate in addition to municipal tax. The tax rates are set for personal income as follows:

• The tax for income up to ISK 409,986 per month is 31.45% (16.78% state tax + 14.67% municipal tax)
• The tax for income exceeding 409,986 ISK and up to 1,151,012 ISK per month is 37.95% (23.28% state tax + 14.67% municipal tax)
• Income exceeding 1,151,012 ISK per month: 46.25% – of which 31.85% is state tax and 14.67% is municipal tax.

Municipal tax is withheld at source at a rate of 14.67%, but the final assessment can vary between 12.44% and 14.76%, according to each municipality’s decision.

Social taxes: From the viewpoint of social taxes, in Iceland, the employers’ social tax rate in 2024 amounts to 6.1 per cent, being among the lowest in Europe and putting Iceland in a fairly favorable position for employers with respect to the total labor cost.

Therefore, the distribution of tax obligations in Iceland between employee and employer is such that income and municipal taxes are withheld from the employee’s compensation, while the employer is responsible for social contributions amounting to 6.1%. The preceding is just one example of how progressive income taxation, combined with a relatively low employer social contribution rate, meets Iceland’s general policy of having social support with an attractive business environment.

Iceland Revenue and Customs

Social tax in Switzerland 2024

In Switzerland, in 2024, the extent of social contributions, as well as their split between employee and employer, varies according to the type of insurance. Key aspects follow:

Old age, death and disability insurance AHV/IV/EO: employees and employers both pay 5.3 percent of wages each without limit.

Unemployment insurance: the same rate is applied to employees and employers alike, at 1.1 percent each up to a maximum income of CHF 148,200.

Family Compensation Fund: employers pay between 1% and 3%; no contributions are deducted from the employee’s account.

Occupational accident insurance: employers pay contributions of between 0.17% and 3%, according to the risk category for a specific activity, on earnings up to 148,200 francs.

Accident insurance for accidents outside working hours: employees pay 1% to 4% on an income of 148,200 francs.

Occupational pension and health insurance are individually decided based on the scheme and cover, respectively.

Employers shall deduct the employee’s share from his or her gross wages and withhold and remit total contributions. For the self-employed, usually both the employer’s and the employee’s share are payable, although different contribution rates may apply.

The total social contribution percentage in Switzerland ranges from 8.17% to 23.5%. In fact, the rate will depend upon the type of insurance and an individual’s income. Note that at least 10.6% of the income in Switzerland goes as mandatory social contribution, half of which is paid by the employee—that is, 5.3%—and the remaining half by the employer.

That system includes social protection, old-age and disability pensions, unemployment insurance as well as health care coverage. Note that health insurance is compulsory in Switzerland, although it is financed separately from the social contributions (with an average monthly premium of more than CHF 334 in 2024).

Federal tax administration

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Social tax in Ireland 2024

Social taxation system in Ireland in 2024 comprises of the social security contributions (PRSI) and Universal Social Tax (USC).

Social security contributions (PRSI)

Labour income – based on labour relationship, including also the taxable non-monetary fringe benefits. PRSI rates applicable in 2024 for the employee and for the employer are different:

For the majority employees – Class A1: employer rate is 11.05%, and employee rate is 4%.

For owners and non-executive directors – Class S1, not falling within Class A, the employee rate is 4% while the employer is not charged a contribution.

For this purpose, self-employed individuals whose earnings from all sources amount to less than €5,000 per year are exempt from paying PRSI. The self-employed pay a PRSI contribution at the same rate as employees, which is 4%.

Universal social tax (USC)

USC is charged on the totality of an individual’s income, prior to the making of any pension deductions. For the year 2024, the USC rates of are as shown below:

• Income up to €12,012 per year: 0.5%
• Taxable income between €12,012.01 and €22,920: 2%
• Between €22,920.01 and €70,044: 4.5%
• Above €70,044: 8%

In addition, for self-employed individuals above €100,000, it also has an additional 3% on income, so the maximum rate goes up to 11%. This reduced rate applies to those over 70 years of age whose total annual income is as much as €60,000 per annum, or to people in this income category who have a medical card.

In Ireland, too, employers contribute 8.8% to 11.05% in social contributions on average, compared with other countries in Europe, where these are generally lower.

These rates therefore also reflect Ireland’s general approach to social security-a financing of programmes such as pensions, unemployment benefits and health insurance.

Irish Tax and Customs departments

Social tax in Turkey 2024

The social insurance system in Turkey determines the rate of contributions by both employers and employees. Social insurance contributions and unemployment insurance are charged. All social contributions shared totally between employee and employer.

Social Contributions

• For employer: The general rate is 20.5 percent, which may be decreased to 15.5 percent under some conditions.
• For employee: It is calculated as 14% of the salary.

The minimum and maximum wages from which social contributions are calculated vary between TRY 10,008 and TRY 75,060 per month between January and July 2024.

Unemployment insurance

Unemployment insurance premiums are shared by:

Employee: 1 percent

Employer: 2%

State: 1 percent

These rates apply within an income ceiling of TRY 75,060 per month during the period.

Changes in 2024

During the preparation of this article, where the minimum wage for calculating social insurance was increased by the Turkish government as of 1 July 2024 to TRY 13,414.50 gross, the maximum contribution at TRY 100,608.90 gross has been determined.

These changes form part of the overall wage and social insurance parameters, reflecting continued efforts to adapt the social security system to the present economic conditions in the country. It involves changes in obligations regarding social contributions by employees and employers, as well as unemployment insurance, to protect and provide support for people who will lose their jobs.

Social tax in Italy 2024

The amount of social contributions in Italy in 2024, and also their redistribution for the employee and employer side, depend on the type of employment and occupation specificity. The main accents sound like this:

For employers:

• Contributions paid by employers for social security: from 29.40% to 41.00% of an employee’s gross salary. Pension contributions, disability and survivors insurance, sickness leave, maternity, paternity and parental leave, and insurance against accidents at work (INAIL) are occupation-specific.

For employees:

• Employees’ contribution: 10% of the employee’s salary. Apart from social security, it covers:

For supervisors or conductors: Executives are obliged to pay into the INPS (state compulsory pension fund) at 9.19% of income up to €52,190 and 10.19% above this figure. In addition, further payments are payable for health care and supplementary pensions.

The self-employed who do not have a VAT number and who are not covered by a compulsory private pension fund are obliged to enroll in a special social insurance system with the INPS. The percentage of the contribution varies, and can range, according to their working conditions, from a minimum of 24% up to a maximum of 35.03%.

Flat tax for the self-employed: A flat tax regime has been designed – Regime forfettario- with the determination, in a lump sum way, of the taxable income at a rate of 15%, with exclusion of VAT, IRAP and ISA, and with no withholding tax at source. To use this regime, certain requisites and limits are provided for.

• The standard VAT rate is 22% for Italy, effective 1st October 2013. Reduced rates: VAT applies on specifically listed supplies of goods and services at lower rates, such as 4% on the supply of specifically listed food, beverages, and agricultural products, while 10% applies to supplies of electricity for listed purposes, among others, and listed medicines.

These data show the system of social insurance in Italy for all categories of employees and self-employed. It includes compulsory and supplementary contributions which will give an extended range of social guarantees, such as pensions, health insurance, and insurance in case of accidents at work.

For employers, social security contributions form a large percentage of total labor costs, amounting as high as 29.40-41.00% on gross wages of an employee, while the employees pay 10% of wages to social security.

There are also contribution rates and requirements for executives and self-employed persons; these relate not only to compulsory pension contributions payable to INPS but also to supplementary contributions payable to the funds granting additional pension and health insurance.

Correspondingly, other social insurance regimes have been imposed on self-employed workers who are not in possession of a VAT number and are not covered under a compulsory private pension fund. The rates, depending on the working conditions, may vary from 24% to 35.03%, applied on the statutory limit for 2024 of €113,520.

Then, the new flat tax regime introduced the Regime forfettario that, for the specific categories of self-employed workers, allows application of the simplified tax system at a flat rate of 15%, VAT, and IRAP exclusion, making it very appealing for small and medium-sized enterprises.

These features make the Italian social security system complex and multilevel, with a broad scale of social guarantees provided by compulsory and voluntary contributions paid by employers, employees and the self-employed alike.

Ministry of Economy and Finance of Italy

Social tax in UK 2024

Contributions to Social Security in the UK are called National Insurance contributions. Both the employee and employer pay into it, covering many social support and benefits programs.

The general picture of how the NICs system works in the United Kingdom, as it applies to me at the update in January 2022, looks something like this:

Employees (Rates for 2022 may change in 2024):

• Class 1 NICs for employees:
  • Paid on wages above Primary Threshold
  • Rate: 12% on earnings between Primary Threshold and Upper Earnings Limit
  • Rate: 2% on earnings in excess of UEL

For employers:

• Class 1 NICs for employers:
  • Pay on wages exceeding the Secondary Threshold
  • Rate: 13.8% on earnings above Secondary Threshold

Please note that NIC rates and thresholds may be changed in 2024, and one is encouraged to visit the official website of HMRC UK or take the services of a tax professional to get updated information.

Generally speaking, NICs pay for various social support programs, including the state pension, the National Health Service, and other social programs.

HM Revenue & Customs

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