What You’d Be Paying in Taxes in 34 Other Countries

No one likes paying taxes, but Americans should be grateful — they’d be paying a lot more in many other countries. Americans earning the average wage of $54,951 came out of tax season with just $41,889 after giving 23.8% to the federal government for income taxes and Social Security contributions in 2018, according to an annual report from the Organization for Economic Cooperation and Development (OECD). Just 11 OECD countries tax their average earners at a lower rate. Here’s a look at average incomes in U.S. dollars and tax burdens (income tax and social security) from around the world. (When you do file your taxes this year, keep these Tax Law Changes in mind.) 

Average gross earnings before taxes: $62,378
Net income after taxes: $37,535
Tax burden: 39.8% 

Belgium has a progressive tax, which means people with higher incomes pay more taxes than those with lower incomes. Its top rate is 50%, and income from property, work, investments, and miscellaneous sources is all taxable. A social security tax is roughly 13% of all income, but the government allows deductions for business expenses, charity, and 80% of alimony payments.

Average gross earnings before taxes: $67,254
Net income after taxes: $40,547
Tax burden: 39.7%

Germany's progressive income and capital tax tops out at 45%, although sources of taxable income include agriculture, forestry, business ownership, employment, self-employment, savings and investments, rental property, and capital gains. There is a 25% withholding tax on interest and dividends and a 15% withholding tax on royalties. Members of certain churches pay an 8% or 9% church tax, which is tax-deductible.

Average gross earnings before taxes: $61,827
Net income after taxes: $39,780
Tax burden: 35.7% 

Denmark’s progressive income tax is just the foundation. There's an 8% Danish labor market contribution tax, a 5% health care tax, 22.5% to 27.8% in municipal taxes, social security taxes, capital gains taxes of 27% or 42%, and a withholding tax of 27% on dividends and 25% on royalties. There's also a church tax, but employment income, bonuses, fringe benefits, business income, fees, pensions, annuities, social security benefits, dividends, interest, capital gains, and real estate rental income are all taxable.

Average gross earnings before taxes: $34,231
Net income after taxes: $22,553
Tax burden: 34.1% 

Slovenia has a progressive tax ranging from 16% to 50%. Residents have to pay taxes on all income, and capital gains, interest, dividends, and rental income are taxed at a flat rate of 25%. But the tax rate on capital gains decreases according to the length of the holding period.

Average gross earnings before taxes: $29,768
Net income after taxes: $19,796
Tax burden: 33.5% 

Hungary assesses a flat personal income tax of 15%, and it applies to all income. Even dividends, interest, and property rentals are taxed at 15%. Each spouse is treated as a separate taxpayer, and social insurance contributions are 18.5% of income for employees.

Average gross earnings before taxes: $60,737
Net income after taxes: $40,813
Tax burden: 32.8% 

Austrians' progressive taxes can be as high as 55% on all employment income. Investment income and capital gains are taxed at 27.5%. White-collar employees contribute 18.07% of a capped amount of income to social security, while blue-collar employees contribute 18.2%.

Average gross earnings before taxes: $45,291
Net income after taxes: $31,062
Tax burden: 31.4% 

Italy's tax system can be a bit difficult for newcomers to digest. It's a progressive income tax ranging from 23% to 43%, but it's applied differently based on residency. Full-time residents get the full brunt of the tax, while new arrivals can pay a flat tax on their non-Italian income. There's a flat tax on productivity bonuses, additional tax on stock options, and both regional and municipal income tax.

Average gross earnings before taxes: $65,227
Net income after taxes: $45,364
Tax burden: 30.5% 

In the Netherlands, “income” falls into three categories: salaries, wages, benefits, pensions, and homeownership income; enterprise income from businesses; and savings and investment income. Each category has its own rates, and social security taxes are factored into the final rate.

Average gross earnings before taxes: $50,542
Net income after taxes: $35,399
Tax burden: 30% 

Finland's progressive rates range up to 31.75%, although there are also social insurance contributions and a public broadcasting tax. Meanwhile, Finland's income tax applies to salaries, wages, pensions, social benefits, and investment income — and all of that is subject to national taxes, municipal taxes, and church taxes.

Average gross earnings before taxes: $68,735
Net income after taxes: $48,456
Tax burden: 29.5% 

Luxembourg's progressive tax starts as low as 8% but hits the top bracket with a 42% levy, which doesn't include a solidarity tax of 7% (or 9% for those making more than $170,000). But Luxembourg has a tax classification strictly for single parents that reduces the levy a bit.

Average gross earnings before taxes: $51,504
Net income after taxes: $36,712
Tax burden: 28.7% 

France's progressive tax rate rises all the way to 45%. It tacks on an extra 3% for every dollar above $283,344 and another 4% for every dollar above $566,687. There are also numerous social surcharges for employment income (9.7%), rental income, dividends, interest, and capital gains (all 17.2%).

Average gross earnings before taxes: $66,505
Net income after taxes: $47,410
Tax burden: 28.7% 

Iceland has a progressive income tax, but it's all of two tiers. The first $7,404 is taxed at 22.5%; the rest is taxed at 31.8%. But each segment is also subject to an extra 14.44% in municipal tax, making the two tiers 36.94% and 46.24%, respectively. There's a 22% tax on capital gains.

Average gross earnings before taxes: $23,949
Net income after taxes: $17,149
Tax burden: 28.4% 

There are no local income taxes in Latvia, but the nation's progressive federal tax structure just went into place recently. Anything shy of $22,500 is taxed at 20%, the bracket up to $71,000 is taxed at 23%, and income above that threshold is taxed at 31.4%. Changes in tax law increased other income taxes, too. Dividends, for example, were taxed at 10% before 2018 but are now taxed at 20%, while tax on capital gains increased to 20% from 15%.

Average gross earnings before taxes: $30,073
Net income after taxes: $21,603
Tax burden: 28.2% 

Turkey’s progressive income tax rates range from 15% to 35%, and they cover a lot. Income tax applies to commercial, agricultural, and professional activities; salaries and wages; income from property; dividends, interest, and royalties; and other income, including capital gains. There are some deductions for medical and educational expenses, pension and private health insurance expenses, and certain charitable donations, but they're limited.

Average gross earnings before taxes: $57,161
Net income after taxes: $41,459
Tax burden: 27.5% 

Norway's taxes are notoriously onerous and complicated, with taxable income including salaries, dividends, interest, royalties, real property, capital income, and industrial, commercial, and agricultural profits. Workers, employers, and the nation all contribute to social insurance that pays pensions and medical benefits. Taxpayers get an unlimited deduction for interest paid on debts, while those under 34 who are saving to buy a house get to deduct 20% of that savings. 

Average gross earnings before taxes: $31,866
Net income after taxes: $23,381
Tax burden: 26.6% 

Portugal's lowest tax rate is 14.5%, but anything above $91,394 gets taxed at 48%, with an added 2.5% to 5% solidarity rate tacked on for good measure. Portuguese taxpayers are allowed a nearly $9,500 deduction at the highest rate. There are separate rates for capital gains and investment income.

Average gross earnings before taxes: $36,806
Net income after taxes: $27,189
Tax burden: 26.1% 

The progressive tax in Greece stretches from 22% to 45%, but the bar for that highest rate is fairly low: If you make more than $45,400, you're in the top tax bracket. Meanwhile, real estate property taxes are also considered income taxes, and range from 15% to 45%. At the average U.S. wage, roughly 7.5% of that income tax is a solidarity tax that will weaken to 5% this year.

Average gross earnings before taxes: $59,930
Net income after taxes: $44,709
Tax burden: 25.4%

Thank you to Ireland for keeping it nice and simple. If you make less than $40,000, you're taxed at 20%. If you make more than $40,000, you're taxed 20% of the first $40,000 and then 40% on the remainder. (Various credits, allowances, and reliefs do slightly complicate the picture.) People 65 and older are tax exempt up to $20,000 if they're single or widowed, and up to $40,000 if they're married.

Average gross earnings before taxes: $51,219
Net income after taxes: $38,326
Tax burden: 25.2% 

Sweden's national income tax doesn't look so bad, with brackets of 0% to 25%. Income up to roughly $50,000 falls into the 0% bracket (with the middle bracket taxed at 20% and anything above $71,000 taxed at 25%). It's a mandatory 32% municipal tax that's particularly punishing. Capital gains aren't necessarily safe either, as all capital income is taxed at a flat 30% rate.

Average gross earnings before taxes: $31,476
Net income after taxes: $23,544
Tax burden: 25.2% 

In Poland, any income below $96,000 is taxed at 18%. But if your income is above that, the tax on the base is 15.4%, while the tax on anything over that is 32%. If you're running a business, you can opt for a flat 19% tax rate instead.

Average gross earnings before taxes: $59,806
Net income after taxes: $45,066
Tax burden: 24.6% 

Unless you make more than $128,000 a year, you won't touch Australia's top 45% tax bracket. But it's a steep climb from 0% to 19% to 32.5% and finally to 37.5%. That doesn't include Australia's Medicare tax of 2%, which increases another 1% to 1.5% for high-income taxpayers without private health insurance. The good news: There are no local taxes to add to the burden.

Average gross earnings before taxes: $30,712
Net income after taxes: $23,151
Tax burden: 24.6%

The Czech Republic has a flat tax, but that doesn't mean everyone pays the same. If you make more than $52,000 a year, for instance, there’s a solidarity contribution of 7% for income exceeding that amount. It applies to employment and entrepreneurial activities only.

Average gross earnings before taxes: $25,147
Net income after taxes: $19,148
Tax burden: 23.9%

Up to roughly $40,000 of income is taxed at 19%; anything above that is taxed at a 25% rate, which is the Slovak Republic's highest tax bracket. Dividend income is taxed at only 7%, while capital gains are taxed at 19%.

Average gross earnings before taxes: $57,095
Net income after taxes: $43,733
Tax burden: 23.4%

The progressive tax rate in the U.K. stretches from 0% to 45%, with the top tier reserved for those making $193,000 or more. The 0% rate is for savings and basic income only, and the rates after that start at 20%. Dividends are taxed at the highest marginal tax rate. There are no local taxes on income in the United Kingdom, which somewhat simplifies matters.

Average gross earnings before taxes: $42,730
Net income after taxes: $32,895
Tax burden: 23%

Our neighbors to the north are actually taxed less — federally. But Canadians have a sprawling system of provincial and territorial taxes that range from 11.5% to 25.75%, depending on where you live and how much you make. Ontario tacks on another 20% to 56% surtax based on income. That puts Canada's highest tax rates at 47% (in Nova Scotia) to 54% (in the Northwest Territories).

Average gross earnings before taxes: $51,849
Net income after taxes: $40,266
Tax burden: 22.3%

Japan's seven tax brackets range from 5% to 45%, with the highest bracket requiring $361,000 in annual income. But there's also a 2.1% surtax imposed on national income tax and a roughly 10% regional and local tax.

Average gross earnings before taxes: $42,535
Net income after taxes: $33,492
Tax burden: 21.3%

Spain divides its income into two categories: “savings taxable income” and “general taxable income.” The first consists of dividends, interest from equity sales, insurance income, and capital gains from transfers of assets. The latter involves employment income and other capital gains. Savings taxable income is taxed on a progressive scale from 19% (on the first $6,700) to 23% (on $53,000 or more). Income tax, however, starts at 19% and goes as high as 45% for those making $67,500 or more.

Average gross earnings before taxes: $41,502
Net income after taxes: $33,851
Tax burden: 18.4%

While New Zealand's progressive taxes on income start at just 10.5%, income over $33,000 is taxed at 30% to 33%. Anything over $48,000 is taxed in the country's highest bracket. 

Average gross earnings before taxes: $41,825
Net income after taxes: $34,364
Tax burden: 18.1%

Israel takes a 50% cut of any income in excess of $178,000 and taxes income over $48,000 at more than 30%. Passive income (rental, dividends, etc.) is taxed at 31% for all taxpayers under 60.

Average gross earnings before taxes: $77,370
Net income after taxes: $63,909
Tax burden: 17.4%

Switzerland has federal, regional, and municipal taxes, but Switzerland's federal taxes are incredibly low for a Western nation: You could bring in more than $750,000 a year and still be taxed at 11.5%. In Zurich, however, the regional tax adds another 8% at the average U.S. wage, while Geneva would tack on another 15%. Interest and dividends are also subject to a 35% withholding tax.

Average gross earnings before taxes: $29,636
Net income after taxes: $25,190
Tax burden: 15%

It doesn't get simpler than Estonia's flat tax of 20% (with a basic exemption, or non-taxable amount, for the average taxpayer). Pension payments are subject to a 10% tax, while dividends get a 7% levy, but employment and business income, capital gains, rents and royalties, interest, dividends, certain insurance proceeds, pensions, scholarships, grants, prizes, and lottery winnings all fall under Estonia's income tax.

Average gross earnings before taxes: $56,488
Net income after taxes: $48,045
Tax burden: 14.9%

You have to make more than $445,000 to land in South Korea's 42% top tax bracket, but South Korea's federal tax brackets are somewhat misleading: local taxes add an average of 2.4% to taxes on the average U.S. income.

Average gross earnings before taxes: $13,081
Net income after taxes: $11,743
Tax burden: 10.2%

Any income over $23,500 is taxed at more than 30%, and income over $180,000 falls into the highest bracket, taxed at 35%. Mexico's 11 tax brackets start at less than 2%, but they don't include the taxes that states are allowed to charge for professional fees, rental income, real estate sales, and other items.

Average gross earnings before taxes: $23,941
Net income after taxes: $22,264
Tax burden: 7%

If you make more than $101,000 in Chile, you get hit with the top 35.5% tax rate. But you can make as much as $42,000 and still pay a single-digit rate. With no local income taxes to consider, Chile's tax system can be incredibly forgiving.