Social security tax rates in Europe 2024

Social taxes in Europe typically include contributions to pensions, health insurance, unemployment insurance and other social programmes. The amount of these taxes, as well as the proportion of distribution between employee and employer, varies considerably from country to country.

General Trends

• Employee-employer split: In most European countries, social contributions are split between the employee and the employer. The share paid by the employer is usually higher than the employee’s share.
• Percentage of wages: Social contributions as a percentage of wages also vary. In some countries, the total amount of social contributions may be as high as 30-40 per cent of gross wages, while in others it may be lower.

Examples from Some Countries

• Germany: In Germany, social contributions include health insurance, pension insurance, unemployment insurance and care insurance. These contributions are split roughly equally between the employee and the employer.
• France: In France, the overall level of social contributions is higher than in most other European countries, with a significant share being borne by the employer.
• UK: Instead of the traditional system of social taxation, the UK uses National Insurance, where contributions are also shared between the employee and the employer.
• Spain: In Spain, social contributions include unemployment insurance, pension insurance and health insurance. The employer contributes most of the contributions.

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

Social tax in Albania 2024

In 2024, the social insurance rate in Albania remains unchanged at 24.5%. This rate is shared between companies and employees: companies pay 15% and employees pay 9.5%. These data indicate the stability of the social insurance system in Albania at the moment.

Social tax in Latvia 2024

In Latvia in 2024, the social taxation system includes taxes paid by both employers and employees. The total rate of social payments is 35.09%. Of this amount, 24.09% is paid by the employer and 11% is charged to the employee. This means that most of the social contributions are borne by the employer, but the employee also makes a significant contribution.

It is also worth noting that social contributions are withheld from a certain portion of wages. For example, for self-employed citizens, the tax rate is 31.13% of the minimum wage, while for those who make payments voluntarily, the rate is 24.54%.

These data present a general picture of social taxation in Latvia for 2024. However, for more accurate information, especially when considering individual cases or changes in legislation, it is recommended to consult official sources or consult with Latvian tax law professionals.

Social tax in Andorra 2024

According to information for 2024, Andorra’s taxation system is geared towards keeping tax rates low, making it attractive for investment and business. The country has the following main types of taxes:

1. The personal income tax (IRPF) has a maximum rate of 10%. The first €24,000 of income is exempt from taxation, the next €16,000 is taxed at 5% and above €40,000 a rate of 10% applies. This is one of the lowest income tax levels in Europe.
2. Corporation tax (IC) is 10% of profits. For new businesses billing less than €100,000 in the first three years, a rate of 5% of the first €50,000 applies.
3. The indirect general tax (IGI), the analogue of VAT, in Andorra is 4.5%. There are also 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.

In addition to these taxes, Andorra has other more specific taxes, such as real estate transfer taxes and municipal taxes.

Regarding social contributions, specific information on the rates and distribution between employee and employer in 2024 was not found. However, based on the general tax policy of the country, it can be assumed that social contribution rates are also low compared to other European countries.

Social tax in Liechtenstein 2024

Liechtenstein’s tax system in 2024 is characterised by relatively low rates and ease of administration. Specific taxation features in Liechtenstein include a corporate income tax, which amounts to 12.5 per cent of business revenue, and a minimum tax of CHF 1,200. This applies both to companies active in Liechtenstein and to registered companies with no business activities. Value Added Tax (VAT) in Liechtenstein is 7.7 per cent, which is the standard rate, with some exceptions for certain goods and services where reduced rates apply.

The taxation of individuals in Liechtenstein also has its own peculiarities. Personal income tax is set at the state and local level, and the rate may vary depending on the taxpayer’s place of residence. The overall income tax rate can 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 must meet certain requirements.

Social tax in Lithuania 2024

In Lithuania in 2024, social taxation is characterised by the following features:

1. Tax rates for individuals: Personal income tax varies depending on the source of income. The tax rate for employees is 15% of salary. In addition, there is a 9% health insurance levy, of which 6% is paid by the employee and 3% by the employer. Mandatory social contributions, including pension and unemployment insurance, are 30 per cent of salary, of which 4 per cent is paid by the employee and the remainder by the employer. Self-employed persons pay social contributions at a rate of 5 to 15 per cent, depending on the profit earned.
2. Minimum object of compulsory social insurance contributions: In 2024, the minimum amount on which an employer must pay the minimum tax for employees to the State Revenue Service (VID) is €1,860 per quarter.

Social tax in Austria 2024

In Austria in 2024, social contributions are shared between the employee and the employer as follows: 18.12 per cent is contributed by the employee and 21.23 per cent by the employer. These contributions cover health care, unemployment, pensions and accident insurance. For example, 7.65% is contributed to health care (3.87% by the employee and 3.78% by the employer), 6% to unemployment (equal between the employee and the employer), 22.8% to pensions (10.25% by the employee and 12.55% by the employer), and 1.2% to accident insurance (all by the employer)

Social tax in Luxembourg 2024

In Luxembourg, in 2024, social contributions are shared between the employee and the employer. Employees of companies are required to make social contributions to the budget, which are usually withheld directly by the employer. The pension fund is allocated 8 per cent of salary and the sick pay fund 3.05 per cent. The exact interest rates and additional details depend on the specific terms of the employment contract and may vary. For more precise information on social contributions in Luxembourg, it is advisable to consult official sources or specialists in the field of tax law in the country.

Social tax in Malta 2024

In 2024 in Malta, both employers and employees were required to pay a social contribution of 10 per cent of the employee’s salary. However, for salaries exceeding €27,679 per annum, the fixed contribution was €53.23 per week if the employee was born after 1 January 1962. For the self-employed, the social tax rate was 15% of the net annual income earned in the previous year, with a maximum contribution of €79.84 for those born after 1 January 1962.

Social tax in Belgium 2024

In Belgium in 2024, the social security system remains complex and multi-layered, including a variety of contributions and benefits that are regulated at both national and local levels. Social contributions in Belgium cover a wide range of social guarantees, including pensions, health insurance, unemployment benefits and other forms of social support.

The amount of income tax for individuals in Belgium in 2024 varies depending on income. For example, for income up to €15,200 the rate is 25% and for income over €46,440 the rate is 50%. These rates apply to taxable income, which is calculated after deducting social contributions, personal allowances and professional expenses.

To receive social security benefits in Belgium, you must register with one of the specialised organisations or with the Belgian health insurance company. These organisations act as collection agencies for the national social security funds.

Belgium has reciprocal social security agreements with many countries, allowing foreigners working in Belgium to claim many of the same benefits as Belgian citizens, provided that certain requirements are met, such as registration in the local municipality or obtaining the appropriate visa

Social tax in Montenegro 2024

In 2024, Montenegro continued to align its tax system with European standards, which is important for the country’s European Union membership aspirations. The tax reform, which began in early 2022, introduced changes for both individuals and legal entities, making the system more attractive to domestic and foreign investors.

Personal income tax

• Montenegro has adopted a progressive personal income tax rate, which is one of the lowest in Europe, ranging from 9% to 15%.
• The introduction of a non-taxable income base of €700, one of the highest in Europe, allows income below this amount to be exempt from taxation, reducing tax deductions for citizens by about 1.5 times.

Cancellation of compulsory health insurance contributions

• As part of the reform, it was also decided to abolish compulsory health insurance contributions, which significantly reduces the financial burden on individuals and legal entities, while at the same time increasing the availability of medical services.

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

Social tax in Bulgaria 2024

In 2024, Bulgaria’s tax system for individuals maintains a stable income tax rate of 10 per cent of the tax base. This is one of the lowest income tax rates in Europe, which makes Bulgaria’s tax system attractive to both local and foreign employees and investors.

Bulgaria has an annual tax return filing process that allows taxpayers to adjust the amount of taxes and social security contributions depending on their income for the previous year. This includes the possibility of taking into account legally recognised expenses that can be deducted from total income, thereby reducing the tax base and consequently the amount of tax payable. Legally recognised expenses for some categories of activities can be as high as 25% or 40% of income, thus paying less tax.

The social insurance rate in Bulgaria for 2024 is 33.4%, which is a compulsory contribution covering various types of social security, including pensions, health insurance and unemployment insurance. These contributions are shared between the employee and the employer, providing social protection to the population.

Tax returns in Bulgaria are filed between 10 January and 30 April each year for the previous year. Taxpayers have the option to file both electronic and paper declarations through the official channels of the National Revenue Agency. The advantage of filing electronically is access to a pre-filled declaration form, which simplifies the declaration process.

Social tax in Netherlands 2024

In 2024, tax law changes affecting both employees and employers in the Netherlands come into effect. One notable update is the increase in the minimum wage to €1,934.40 per month for workers over the age of 21. This change is significant for the country’s economy and tax system, reflecting the government’s efforts to improve the financial well-being of employees.

The income tax rate for income up to EUR 73,031 per year was slightly reduced to 36.93 per cent from 37.07 per cent in 2022. In addition, the tax rebate (arbeidskorting) to which all working persons (employees and entrepreneurs) are entitled has been increased. This tax rebate reduces the income tax percentage, effectively increasing the amount “in hand”. In particular, for employees whose annual income does not exceed €115,301, the tax rebate is expected to increase by around €500.

Another positive change is the increase in the non-taxable compensation for commuting expenses, which is now set at €0.21 per kilometre, up from the previous €0.19. These adjustments are designed to gradually increase wages for most working individuals.

However, it is also noted that the retirement age has been raised slightly to 66 years and 10 months as of 1 January 2024. This change is part of a broader effort to adapt the pension system in line with demographic shifts.

Social tax in Croatia 2024

In 2024, Croatia adopted a number of tax changes aimed at simplifying and easing the tax burden for taxpayers, stimulating employment and entrepreneurship, and increasing social justice and solidarity. These changes will enter into force on 1 January 2024. The main changes concern the abolition of the city tax on all types of income, which previously ranged from 0% to 18% depending on the municipality, and changes in income tax rates. The innovations also include an increase in the basic personal allowance and the threshold for the application of the increased income tax rate, as well as a reduction in the base for the first tier of pension insurance at certain gross salaries. Individuals with gross salaries up to a certain level will receive significant tax relief.

Income tax for individuals in Croatia in 2022 was 30%. The social insurance rate in 2024 was 36.5%. These rates reflect the general trend towards lower tax burden and higher social benefits to improve working and living conditions in the country

Social tax in Norway 2024

In 2024, Norway’s personal income tax rate was set at 38.2 per cent. In addition, the social insurance rate in 2022 was set at 22.1%. These rates reflect the overall tax structure in the country, which is aimed at providing social protection and financing public services.

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

1. Social insurance: The employee’s contribution to social insurance is 8.3% of his/her salary. If the basic salary exceeds EUR 5,005, the contribution is fixed at EUR 415.42.
2. GESY (health care system): The contribution to the GESY system is 2.65% of the employee’s basic salary.
3. Income tax: It is levied on a progressive scale starting from income above 19,500 euros. For example, a rate of 20% applies from income between €19,501 and €28,000, and then on an ascending scale.

Percentage of social tax on wages paid

Let’s take the example of the minimum possible salary for third-country employees, which is €2,500 per month (or €30,000 per year):

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

Thus, the employee’s net salary is 2,160 euros.

On the employer’s side, the total costs for the employee include contributions to the Social Insurance Fund (€207.5), Unemployment Fund (€30), Apprenticeship Fund (€12.5), Social Cohesion Fund (€50), and GESY (€72.5), adding up to €2,872.5.

Benefits for foreign workers

Cyprus offers benefits for employees who were foreign residents before starting work on the island, including 50% and 20% tax deductions under certain conditions.

This system makes Cyprus an attractive place to work and live, especially given the opportunities for tax optimisation and the availability of various incentives for resident individuals and legal entities.

Social tax in Poland 2024

In 2024, Poland’s tax system provides for various categories of taxes for individuals and legal entities, including social contributions and income tax.

Social contributions

Social contributions in Poland are shared between the employee and the employer. Employees are obliged to contribute 8.3% of their salary to the Social Insurance Fund. In addition, employees contribute 2.65% of their basic salary to the GESY health care system.

Income tax

Income tax in Poland is calculated on a progressive scale:

• Income up to 19,500 euros is not taxable,
• Income between €19,501 and €28,000 is taxed at a rate of 20%,
• Income between €28,001 and €36,300 is taxed at a rate of 25%,
• Income between €36,301 and €60,000 is taxed at a rate of 30%,
• Income over €60,000 is taxed at a rate of 35%.

To determine the tax base, deductions such as social security and GESY contributions must be taken into account from the basic salary. For example, if the basic salary is €2,500 per month, after deducting social security and GESY, the employee’s net salary will be approximately €2,160.

Taxes for employers

Employers are also required to make social contributions on behalf of their employees, including contributions to the Social Insurance Fund (8.3%), the Unemployment Fund (1.2%), the Industrial Training Fund (0.5%), the Social Cohesion Fund (2.0%), and the GESY health system (2.9%).

Tax benefits

Poland provides various tax incentives and subsidies for investors and entrepreneurs, such as reduced tax rates for small and medium-sized enterprises and special economic zones with favourable tax conditions.

Social tax in Czech Republic 2024

In 2024, the Czech tax system provides for various taxes and social contributions for companies and employees. The main taxes for companies include income tax, VAT, social security contributions, property tax and road tax. Profit tax for companies is 19%. VAT has rates of 15-21%, depending on the type of goods and services. Payroll tax includes pension and social contributions (31.5%), health insurance (13.5%) and income tax (15%), which together account for about 60% of the total taxes payable if a company has employees.

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

There are various tax incentives and double tax treaties that can have a significant impact on the overall tax burden of companies and individual entrepreneurs. The Czech Republic has signed more than 80 such agreements, which underlines its commitment to creating a favourable tax climate for local and foreign businesses.

Social tax in Portugal 2024

In Portugal in 2024, the tax system for individuals and companies remains diverse, including income tax, social contributions and various local taxes and levies. The main income tax rates for companies are 21% on profits and 28% on dividends. For employees, the total tax burden consists of income tax, with a progressive scale ranging from 0 to 48%, and social contributions totalling 34.75% (11% for the employee and 23.75% for the employer).

It is important to note that Portugal has a system whereby the salary “in hand” of the employee is calculated after deducting all taxes and contributions from the agreed amount. This means that the salary stated includes taxes and social contributions that will be deducted to determine the net amount received by the employee. Such a system requires precise planning and calculations on the part of the employer to ensure that it meets employee expectations and legal requirements.

In general, Portugal’s tax system is a complex arrangement, comprising not only income taxes and social contributions, but also a variety of local levies and charges such as value added tax (IVA), environmental taxes, and municipal tourist taxes.

Social tax in Denmark 2024

In Denmark in 2024, the social insurance system is mainly financed by taxes rather than through specific social contributions. Employees and employers contribute to the supplementary labour market pension system (ATP), where employees pay DKK 1,135.8 and employers pay DKK 2,271.6 per year. In addition, employers contribute to the maternity fund (approx. 1,350 DKK), work injury insurance (approx. 5,000 DKK) and other public social schemes (approx. 5,300 DKK).

Social tax in Romania 2024

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

• The total social tax is 37.25 per cent, of which employees are responsible for 35 per cent (including 10 per cent for health and 25 per cent for social insurance) and employers are responsible for 2.25 per cent for work accident insurance.
• Health care tax is levied at a rate of 10% and is fully paid by the employee.
• Pension insurance contributions amount to 25% of salary, also paid by the employee. The employer does not make direct pension contributions.
• Work accident insurance costs employers 2.25 per cent of payroll.

Additionally, Romania has a flat income tax of 10% for both residents and non-residents, making the country’s tax system one of the simplest in Europe.

This social tax structure provides funding for a wide range of social programmes, including pensions, health care, and support for unemployment and accidents at work.

Social tax in Estonia 2024

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

• Social tax is 33% of the taxable amount of income derived from labour activity and entrepreneurship. This tax is used to finance pension insurance and public health care. All social tax is paid by the employer.
• The minimum monthly mandatory social tax payment in 2024 has been set at €654, which translates into a minimum mandatory payment of €215.82 per month.
• Unemployment contribution rates are 1.6% for the employee and 0.8% for the employer, unchanged from the prior year.

Social tax is payable:

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

It is important to note that social tax in Estonia is an obligatory element of the social security system and is aimed at financing pension and health care services for the population. Its amount and calculation mechanism are defined by legislation and imply mandatory payments by employers for their employees, as well as by individual entrepreneurs for themselves.

Social tax in Finland 2024

In Finland, social security contributions are divided between employers and employees and cover several areas such as health insurance, pension insurance and unemployment insurance. These contributions are compulsory and are intended to finance Finland’s extensive social security system.

Social security contributions for employers:

• The employer health insurance contribution is set at 1.53% for 2024.
• Contributions to employer’s pension insurance vary from employer to employer, but the average percentage is 17.39 per cent. This contribution is a significant part of the Finnish pension system, ensuring the availability of pension benefits for employees.
• The unemployment insurance contribution for employers has a gradient scale with a rate of 0.52 per cent of total compensation up to €2,251,500 and 2.06 per cent above this amount. This supports employees in the event of job loss.
• The group’s statutory employment accident insurance and group life insurance average 0.57 per cent and 0.06 per cent of payroll respectively, providing cover for occupational accidents, illness and life insurance benefits.

Social security contributions for employees:

• Retirement insurance contributions range from 7.15% for most employees to 8.65% for employees between the ages of 53 and 62. These contributions ensure that employees accumulate pension rights by the time they retire.
• The health insurance contribution is 1.96%, which is divided into two parts: a health care contribution of 0.60% and a daily allowance contribution of 1.36%. The daily allowance contribution is waived for salaries less than €15,703, aimed at providing sickness benefits.
• The unemployment insurance contribution paid by employees is 1.50 per cent, supporting them financially in the event of job loss.

Social security contributions in Finland provide a strong safety net for both employees and employers, covering various aspects of social security, including health, pensions and unemployment.

Social tax in Macedonia 2024

In Northern Macedonia, changes to the tax system were introduced in 2024, temporarily suspending the application of the progressive scale of taxation of personal income. For three years, starting from 1 January 2020 to 31 December 2022, tax on income from employment, self-employment, copyright, income from the sale of own agricultural products, income from industrial property, rent and gift rent, capital, gambling, insurance and other income will be levied at a rate of 10%.

Social tax in Serbia 2024

In Serbia in 2024, the social taxation system includes social insurance contributions that are shared between employees and employers. These contributions cover pension and disability insurance, health insurance and unemployment insurance.

Employee Contributions:

• Pension and disability insurance contributions are 14% of gross salary.
• Health insurance – 5.15%.
• Unemployment insurance – 0.75%. In total, employees must pay 19.90% of their gross wages for social insurance.

Employer Contributions:

• Pension and disability insurance contributions are 10% of the employee’s gross salary.
• Health insurance is 5.15%. This means that the total burden on the employer is 15.15% of the employee’s gross salary, not counting fringe benefits such as food and holiday subsidies.

Personal income tax:

• Taxation of income begins with the application of a tax rate of 10% for income above 21,712 RSD per month. No tax is levied for income up to this amount.

Thus, the total burden of social contributions in Serbia in 2024 is 35.55% of an employee’s gross salary, which is similar to that in most Western countries. However, due to the lower level of salaries in Serbia, the actual and maximum amounts payable will be significantly lower, which makes the country attractive for business location.

Social tax in France 2024

In France in 2024, the social tax system includes contributions for health, maternity, disability and death (13% or 7%), old-age contributions (6.9% up to a limit of €3,666 and 0.4% of total income for employees, 8.55% and 1.9% respectively for employers), as well as contributions for work accident insurance, family benefits (5.25% or 3.45%) and supplementary pension contributions. The total social tax for employees is 19.90% of gross wages, while the burden on employers varies, including 15.65% plus miscellaneous benefits.

Social tax in Slovakia 2024

In Slovakia in 2024, total social contributions for employees are 9.4% of remuneration, with the maximum contribution limited to EUR 796.83 per month. Contributions to employee health insurance are 4% of remuneration with no limit on the amount. On the employers’ side, social contributions amount to 24.4% of remuneration with a maximum contribution of EUR 2,068.36 per month, in addition, they pay work accident insurance contributions of 0.8% of the employees’ total wages, which are unlimited. The employer’s health insurance contributions are 10% of remuneration with no limit on the amount.

Social tax in Georgia 2024

In 2024, Georgia’s tax system continued to follow the basics established by the previous reforms, with a focus on simplification and ease of doing business. An important aspect of Georgia’s tax policy is the universal pension levy, which was introduced on 1 January 2019. The pension levy ranges from 4 to 6% of an individual’s income, including 2% of the individual’s own income, 2% of the employer’s funds for salaried employees (or 4% in the case of self-employed persons, with the self-employed having the right to waive the levy), and 0 to 2% of the state budget.

With regard to corporate and individual taxes, the corporate income tax rate is 15%. However, there are special rates for certain categories of companies, for example, 5% for companies with the status of an International Company and 0% for companies with the status of a Virtual Zone entity. Income tax for individuals in Georgia is set at 20% with a flat rate. Value Added Tax (VAT) remains at 18% and excise tax rates depend on the category of goods.

The taxation system in Georgia demonstrates flexibility and adaptation to modern economic conditions, seeking to stimulate business development and attract investment. The mandatory pension levy emphasises the importance of social responsibility for both employers and employees, while ensuring support from the state.

Social tax in Slovenia 2024

In 2024, social tax in Slovenia consists of contributions for pension and disability insurance, compulsory health insurance, unemployment insurance and insurance against accidents at work and occupational diseases. The amount of contributions is distributed between the employee and the employer as follows:

• For pension and disability insurance: 15.50 per cent is paid by the employee and 8.85 per cent by the employer.
• For compulsory health insurance: 6.36 per cent is paid by the employee and 6.56 per cent by the employer.
• For unemployment insurance: 0.14 per cent is paid by the employee and 0.06 per cent by the employer.
• For insurance against accidents at work and occupational diseases: 0.53% is paid by the employer only.

As a result, the total amount of social contributions is 16.1 per cent of wages paid by the employer and 22.1 per cent paid by the employee.

It should be noted that the social insurance system in Slovenia provides a wide range of social protection, including pensions, health insurance, unemployment insurance and other types of social support. These contributions are compulsory and are withheld from employees’ wages and paid by employers to the relevant State funds.

Social tax in Germany 2024

In Germany, the social security system for 2024 includes contributions for health insurance, accident insurance, pension insurance and unemployment insurance, with certain rates shared between employers and employees. Here is an overview based on the information received:

Health Insurance

• The total contribution rate is 14.6%, with an equal split between employee and employer. In addition, there is a specific additional TK contribution of 1.2%, which is also shared between the employee and the employer, making the total health insurance contribution rate approximately 15.8%.

Accident insurance

• The accident insurance rate is 3.4%, with an additional contribution of 0.6% for persons without children aged 23 and over. This rate is also shared between the employee and the employer.

Pension Insurance

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

Unemployment insurance

• The unemployment insurance rate is 2.6%, with equal contributions from employees and employers.

Impact of Increased Contributions in 2024

The threshold, which is the maximum salary amount used to calculate health insurance premiums, has been increased to 59,850€ per year, leading to an increase in social contributions for employees earning above this threshold. This adjustment means an increase in premiums for both health and accident insurance. In addition, the supplementary health insurance premium rate also saw an increase, adding to the total cost for those whose salary exceeds the threshold.

For public pension and unemployment insurance, threshold adjustments mean higher contributions for those earning above the new limits, which are 87,600€ in West Germany and 85,200€ in East Germany for pension insurance. Unemployment insurance shares the same adjustment increase, with its rate also rising to 2.6%.

Social contributions in Germany for 2024 are therefore a significant factor for both employees and employers, affecting net income and employment costs. These contributions finance the social security system, providing a range of benefits including health care, pensions, unemployment benefits and long-term care

Social tax in Spain 2024

In 2024, Spain has introduced changes to the social security system, including an intergenerational equity mechanism that provides for a contribution of 0.6% of the contribution base for general cases in all situations of registration or equivalent registration in the social security system where there is an obligation to contribute to pension coverage. In 2024, this mechanism will be 0.70 percentage points, of which 0.58 is attributable to the company and 0.12 to the employee.

The maximum contribution will increase by 8.6 per cent from the current €4,139.40 per month to €4,495 per month (€53,940 per year). This applies to the contributions that employees and employers make monthly to Social Security for various benefits of the system, such as pensions, temporary incapacity for work, unemployment and so on.

Social security in Spain also provides benefits in the event of a work-related accident or non-work-related illness. In the event of temporary incapacity for work due to illness or a non-work-related accident, you can claim benefits if you are registered for social security and have contributed for 180 days in the previous five years. The amount of the benefit will depend on the extent of your disability. During the first 20 days of sick leave, the benefit is 60 per cent of the calculation base, and from the 21st day onwards it is 75 per cent

Social tax in Greece 2024

In Greece in 2024, the amount of social security contributions depends on the social fund to which the employee is registered. For the main social security fund (EFKA), contributions are withheld at 13.87% from the employee and 22.29% from the employer. The maximum amount of social security contributions for EFKA is set at €7,126.94 per month.

As of 1 January 2024, changes were introduced, including an increase in the upper limit of employees’ salaries subject to social contributions from €6,500 to €7,126.94. For employees and employers, this means an additional monthly supplement of €227 (€87 for the employee and €139 for the employer) for monthly gross wages equal to or exceeding €7,126.94.

Law 4997/2022 introduced new regulations in the Greek legal system concerning social security, pensions and labour law. According to this law, social security debts can be regulated and paid in instalments from 2 to 24 equal monthly instalments or up to 48 equal monthly instalments, provided that they are audited debts. Incentives are also established for the conversion of part-time contracts to full-time contracts, including a state subsidy of social contributions for a period of one year from the date of conversion.

These changes emphasise the importance of understanding the current structure of social contributions in Greece for employees and employers, and the potential impact of these changes on personal and corporate finances.

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 who do not have a permanent establishment in Sweden must register for social contributions or may enter into an agreement with the employee that the employee will pay and report the contributions himself/herself on a monthly basis. Different rates apply depending on the solution chosen.

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 usually fully accounted for as a tax credit on the employee’s tax return (i.e. the actual cost to the employee is usually zero).

Thus, the total social contribution rate in Sweden in 2024 is 14 per cent for employees and 31.42 per cent for employers, giving a total of 45.42 per cent.

These data emphasise Sweden’s comprehensive approach to social protection, including a wide range of benefits and services such as health care, unemployment support, family allowances and pensions.

Social tax in Hungary 2024

In Hungary in 2024, social contributions constitute a significant part of the tax and labour obligations of employers and employees. The basis for social contributions is the gross income of the employee. The contribution rate for the employer (the so-called “social tax”) is 13 per cent and the social contribution rate for employees is 18.5 per cent. It is possible to apply a child tax credit, which reduces 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%.

In 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 as of 1 January 2024. Employers located in Hungary are required to pay all social contributions and electronically file monthly social security declarations. There are similar obligations for foreign employers without local representation, but in case of non-compliance, the obligations are transferred to the employees.

Social benefits are provided to reduce the cost of employing certain categories of employees, such as the unemployed, mothers with three or more young children, persons with disabilities, researchers, etc. The employer may apply social benefits to the employment of the above-mentioned employees. The periods of eligibility of benefits and their exact amounts depend on the employee.

Employees’ contribution to the social security system in Hungary in 2024 includes 7% for health care, 10% for pension insurance and 1.5% for labour market contribution, while employers pay 18.5% in social contribution and 1.5% for education contribution. It is important to note that social contributions in Hungary are not included in the calculation of taxable income for personal income tax (PIT).

This information emphasises the complex structure of social contributions and taxes in Hungary, requiring careful consideration by both local and foreign employers and employees.

Social tax in Iceland 2024

In Iceland in 2024, taxation of individuals includes a progressive state income tax rate and a municipal tax. The tax rates for personal income are defined as follows:

• Income up to ISK 409,986 (ISK) per month is taxed at 31.45% (16.78% state tax + 14.67% municipal tax).
• Income above 409,986 ISK and up to 1,151,012 ISK per month is taxed at 37.95% (23.28% state tax + 14.67% municipal tax).
• Income over 1,151,012 ISK per month is taxed at 46.25% (31.85% state tax + 14.67% municipal tax).

Municipal tax is withheld at source and is 14.67%, but the final assessment can range from 12.44% to 14.76% depending on the decision of each municipality.

In terms of social taxes, the social tax rate for employers in Iceland in 2024 is 6.1 per cent. This is one of the lowest rates in Europe, making Iceland relatively favourable for employers in terms of total labour costs.

Thus, the distribution of tax obligations between employee and employer in Iceland includes the withholding of income and municipal taxes from the employee’s salary, and the payment of social contributions by the employer at a rate of 6.1%. This combination of progressive income taxation and a relatively low social contribution rate for employers reflects Iceland’s overall tax policy of combining social support with an attractive business environment.

Social tax in Switzerland 2024

In Switzerland in 2024, the amount of social contributions and their distribution between employee and employer differ depending on the specific type of insurance. Here are the key aspects:

1. Old age, death and disability insurance (AHV/IV/EO): both employees and employers contribute 5.3 per cent of wages with no set limit.
2. Unemployment insurance: both employees and employers contribute 1.1 per cent each up to an income of CHF 148,200.
3. Family Compensation Fund: employers contribute between 1% and 3%, while no contributions are withheld from employees.
4. Occupational accident insurance: employers contribute between 0.17% and 3%, depending on the risk associated with a particular job, up to an income of 148,200 francs.
5. Accident insurance for accidents outside working hours: covered by employees at a rate of 1% to 4% up to an income of 148,200 francs.
6. Occupational pension (BVG) and health insurance are determined individually depending on the plan and coverage respectively.

Employers are required to withhold and remit total contributions by deducting the employee’s share from his or her gross wages. The provisions are different for the self-employed, as they usually cover both the employer’s and the employee’s share, although different contribution rates may apply.

The overall percentage of social contributions in Switzerland varies from 8.17% to 23.5%, with the exact rate depending on various factors including the type of insurance and the individual’s income. It is important to keep in mind that in Switzerland, mandatory social contributions are 10.6% of income, where half (5.3%) is covered by the employee and the other half by the employer.

This system provides a wide range of social protection, including old-age and disability pensions, unemployment insurance and health care coverage. It is worth noting that health insurance is compulsory in Switzerland, but is paid separately from social contributions, with an average premium of more than CHF 334 per month per person in 2024.

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Social tax in Ireland 2024

In Ireland in 2024, the social taxation system includes social security contributions (PRSI) and Universal Social Tax (USC).

Social security contributions (PRSI)

PRSI is levied on labour income, including taxable non-monetary benefits. PRSI rates for employers and employees in 2024 are different:

• For most employees (Class A1): the rate for the employer is 11.05% and the rate for the employee is 4%.
• For owners and non-executive directors (Class S1) who do not fall within Class A, the rate for the employee is 4%, while the employer is not charged a contribution.

Self-employed persons whose income from all sources is less than €5,000 per year are not required to pay PRSI. The contribution rate for the self-employed is also 4%.

Universal social tax (USC)

USC is a tax paid on total income before deducting pension contributions. USC rates in 2024 are as follows:

• Income up to €12,012 per year is taxed at a rate of 0.5%.
• Income between €12,012.01 and €22,920 is taxed at a rate of 2%.
• Income between €22,920.01 and €70,044 is taxed at a rate of 4.5%.
• Income over €70,044 is taxed at a rate of 8%.
• Self-employed persons with income over €100,000 are subject to an additional rate of 3%, totalling a maximum rate of 11%.

Reduced rates apply for those over 70 years of age with a total annual income of up to €60,000 or those with a medical card with an income of up to €60,000.

It is noted that social contributions in Ireland for employers average between 8.8% and 11.05%, which is relatively lower compared to other European countries.

These rates reflect Ireland’s comprehensive approach to social security, providing funding for programmes such as pensions, unemployment benefits and health insurance.

Social tax in Turkey 2024

In Turkey in 2024, social contributions and obligations of employers and employees are regulated by the social insurance system, which includes social insurance contributions and unemployment insurance. The total amount of social contributions is shared between the employee and the employer.

Social contributions

• For employers: the general rate is 20.5%, which can be reduced to 15.5% if certain conditions are met.
• For employees: the rate is 14% of salary.

Social contributions are calculated based on the minimum and maximum wages set between TRY 10,008 and TRY 75,060 per month from January to July 2024.

Unemployment insurance

Unemployment insurance premiums are allocated as follows:

• Employee: 1 per cent
• Employer: 2%
• State: 1 per cent

These rates apply to an income cap of TRY 75,060 per month for the period.

Changes in 2024

Effective 1 July 2024, the Turkish government increased the minimum wage for social insurance calculation to TRY 13,414.50 gross and set the maximum contribution amount at TRY 100,608.90 gross.

These changes are part of the overall wage and social insurance parameters and reflect ongoing efforts to adapt the social security system to the current economic conditions in the country. They affect the obligations of both employees and employers with regard to social contributions and unemployment insurance, providing protection and support in the event of job loss.

Social tax in Italy 2024

In Italy in 2024, the amount of social contributions and their distribution between employee and employer depends on the type of employment and the specificity of the occupation. Here is a brief overview of the key aspects:

For employers:

• Employer social security contributions range from 29.40% to 41.00% of an employee’s gross salary. These contributions include pension contributions, disability and survivors insurance, sick leave, maternity, paternity and parental leave, and insurance against accidents at work (INAIL), which varies by occupation.

For employees:

• Employees are required to pay contributions of 10% of their salary. This includes social security contributions.

For supervisors (conductors):

• Executives are required to contribute to the INPS (national mandatory pension fund) at a rate of 9.19% of income up to a limit of €52,190 and 10.19% above this amount. There are also additional contributions to the health care and supplementary pension funds.

For the self-employed:

• The self-employed who do not have a VAT number and are not covered by a compulsory private pension fund must register with INPS under a separate social insurance regime (Gestione Separata Inps). Contribution rates vary and can range from 24% to 35.03%, depending on their working conditions.

A flat tax for the self-employed:

• A flat tax regime (Regime forfettario) has been introduced, which provides for the determination of taxable income on a lump sum basis using a 15% rate, the exclusion of VAT, IRAP and ISA, and no withholding tax at source. In order to utilise this regime, certain criteria and limits must be met.

Consumption taxes:

• The standard rate of VAT (IVA) in Italy has been 22% since October 2013. There are preferential rates for specifically listed supplies of goods and services, such as 4% for listed food, beverages and agricultural products, and 10% for electricity supplies for listed purposes and listed medicines.

These data provide an overview of the social insurance system in Italy for different categories of workers and the self-employed. The system includes both compulsory and supplementary contributions aimed at providing a wide range of social guarantees, including pensions, health insurance and insurance against accidents at work.

For employers, social security contributions represent a significant portion of total labour costs and can range from 29.40% to 41.00% of an employee’s gross wages. Employees in turn pay 10% of their wages to social security.

There are specific contribution rates and requirements for executives and self-employed persons, which include not only mandatory pension contributions to INPS, but also additional contributions to various funds that provide additional pension and health insurance.

Self-employed persons who do not have a VAT number and are not covered by a compulsory private pension fund are subject to a separate social insurance regime with different contribution rates, depending on their working conditions. The rates can range from 24% to 35.03%, applied to the statutory limit for 2024 of €113,520.

The introduced flat tax regime (Regime forfettario) allows certain categories of self-employed persons to apply a simplified tax system with a flat rate of 15%, VAT and IRAP exclusion, making it an attractive option for small and medium-sized businesses.

These provisions reflect the complexity and multilevel nature of the Italian social security system, which provides a wide range of social guarantees through compulsory and voluntary contributions from employers, employees and the self-employed alike.

Social tax in UK 2024

In the UK, social contributions are commonly referred to as National Insurance contributions (NICs). They are paid by both employees and employers and are used to fund various social support and benefit programmes.

Here’s a general overview of the NICs system in the UK at the time of my last data update in January 2022:

For employees (rates for 2022, could change in 2024):

• Class 1 NICs for employees:

• • Paid on wages above a certain threshold (Primary Threshold).
  • Rate: 12% on earnings between Primary Threshold and Upper Earnings Limit (UEL).
  • Rate: 2% on earnings in excess of UEL.

For employers (rates for 2022, could change in 2024):

• Class 1 NICs for employers:

• • Payable on wages in excess of the Secondary Threshold.
  • Rate: 13.8% on earnings above Secondary Threshold.

It is important to note that the rates and thresholds for NICs may have changed in 2024 and it is recommended to visit the official website of HM Revenue and Customs (HMRC) UK or consult a tax professional for up-to-date information.

NICs are used to fund a variety of social support programmes including the state pension, the National Health Service (NHS) and other social programmes.

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