Gross to net salary of a local executive and total cost to employer comparison for selected countries
Married, two dependant children
All the numbers are in EURO
Country
Gross Salary
Employee
Social
Security
Income
Tax
Euro
2
(A)
(B)
Column : 1
Net To
Employee
5
Net % To
Employee
After Social
And Income
Tax
6
Marginal
Income Tax Rate
(on next Euro
of Income)
(C)
7
Employer
Social
Security
Total Gross Cost
To Employer
(Salary + SS)
Total Net Cost
To Employer
(After Corp. Tax
Benefit if Profitable)
9
Top Marginal
Corporate
Income Tax
Bracket
Percentage
10
(A)
8
3
4
11
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
9,100
13,000
2,600
12,500
8,000
3,000
6,500
20,400
0
11,500
11,500
10,500
7,100
3,600
11,500
2,600
3,000
10,500
1,600
6,500
7,800
13,500
11,000
7,600
0
1,700
22,100
2,100
2,700
11,400
13,700
3,400
200
4,900
30,200
35,400
22,800
12,500
36,600
20,000
39,000
7,700
25,000
20,700
20,700
29,200
36,800
28,400
33,200
24,300
24,000
16,900
29,500
34,500
30,100
24,200
24,900
14,800
13,000
17,500
29,900
31,600
46,300
19,100
10,300
30,000
13,000
28,700
60,700
51,600
74,600
75,000
55,400
77,000
54,500
71,900
75,000
67,800
67,800
60,300
56,100
68,000
55,300
73,100
73,000
72,600
68,900
59,000
62,100
62,300
64,100
77,600
87,000
80,800
48,000
66,300
51,000
69,500
76,000
66,600
86,800
66,400
61%
52%
75%
75%
55%
77%
55%
72%
75%
68%
68%
60%
56%
68%
55%
73%
73%
73%
69%
59%
62%
62%
64%
78%
87%
81%
48%
66%
51%
70%
76%
67%
87%
66%
50%
54%
30%
13%
59%
20%
53%
38%
25%
41%
41%
40%
38%
41%
45%
25%
24%
39%
35%
52%
40%
40%
37%
16%
13%
19%
41%
43%
61%
38%
25%
35%
15%
40%
20,500
32,700
2,600
35,000
700
33,500
23,600
46,200
0
11,500
11,500
18,400
32,000
10,800
41,900
6,900
31,000
10,200
1,600
3,100
14,100
9,500
23,800
11,000
2,500
5,400
30,900
10,300
32,500
14,700
13,700
21,500
2,600
11,900
120,500
132,700
102,600
135,000
100,700
133,500
123,600
146,200
100,000
111,500
111,500
118,400
132,000
110,800
141,900
106,900
131,000
110,200
101,600
103,100
114,100
109,500
123,800
111,000
102,500
105,400
130,900
110,300
132,500
114,700
113,700
121,500
102,600
111,900
25%
34%
10%
21%
25%
20%
26%
34%
15%
16%
30%
25%
20%
13%
32%
15%
15%
30%
35%
26%
28%
19%
27%
16%
24%
19%
22%
30%
28%
32%
32%
20%
25%
28%
90,400
87,600
92,300
106,700
75,500
106,800
91,500
95,900
96,100
93,900
78,100
88,800
105,600
97,000
95,900
90,900
111,400
77,600
65,200
76,800
82,200
88,700
91,000
93,200
77,900
85,400
102,100
77,200
95,400
78,000
77,000
97,200
77,000
80,600
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
2,300
1,000
1,600
900
5,500
5,500
5,500
5,500
5,500
30,700
25,100
35,000
27,000
16,500
0
19,300
26,662
16,500
67,000
73,900
63,400
72,100
78,000
94,500
75,200
67,838
78,000
67%
74%
63%
72%
78%
95%
75%
68%
78%
35%
28%
46%
28%
19%
25%
22%
30%
19%
11,500
37,300
1,800
5,000
5,500
5,500
5,500
5,500
5,500
111,500
137,300
101,800
105,000
105,500
105,500
105,500
105,500
105,500
35%
34%
34%
28%
35%
25%
42%
46%
36%
72,500
90,600
67,700
75,600
68,200
78,700
60,500
56,400
67,100
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
100,000
1,500
1,100
0
0
2,000
7,100
7,900
11,000
5,600
100
38,500
27,700
13,900
33,000
31,200
36,000
14,500
23,900
10,200
34,800
60,000
71,200
86,100
67,000
66,800
56,900
77,600
65,100
84,200
65,100
60%
71%
86%
67%
67%
57%
78%
65%
84%
65%
30%
40%
15%
34%
35%
46%
33%
28%
20%
40%
6,900
2,600
0
0
4,200
4,300
8,300
12,000
3,600
100
106,900
102,600
100,000
100,000
104,200
104,300
108,300
112,000
103,600
100,100
30%
25%
17%
42%
30%
26%
41%
25%
18%
28%
74,800
77,000
83,500
58,000
72,900
77,200
63,900
84,000
85,000
72,100
EUROPE
Austria (1)
Belgium (2)
Cyprus
Czech Republic
Denmark (3)
Estonia
Finland (4)
France (5)
Georgia (6)
Germany (7)
Germany and Berlin (7)
Greece (8)
Hungary (9)
Ireland (10)
Italy (11)
Latvia (12)
Lithuania
Luxembourg
Malta before ref & imp.
Netherlands (13)
Norway
Poland (14)
Portugal (15)
Romania (16)
Russia
Slovakia (17)
Slovenia (18)
Spain (19)
Sweden (20)
Switzerland (Geneva) (21)
Switzerland (Zurich) (22)
Turkey (23)
Ukraine (24)
United Kingdom (25)
AMERICA
Argentina
Brazil (26)
Canada (Ontario) (27)
Mexico (28)
USA
USA and Reform Graetz
USA and Illinois
USA and New York
USA and Texas
ASIA/MIDDLE EAST/AFRICA
Australia (29)
China (30)
Hong Kong
India (31)
Indonesia (32)
Israel (33)
Japan (34)
Malaysia (35)
Singapore (36)
South Africa (37)
South Korea
Taiwan
Thailand (38)
UAE (39)
Qatar
100,000
100,000
100,000
100,000
100,000
3,900
2,200
200
5,000
0
22,800
19,900
27,100
0
0
73,300
77,900
72,700
95,000
100,000
73%
78%
73%
95%
100%
39%
30%
37%
0%
0%
4,800
2,300
200
12,500
0
104,800
102,300
100,200
112,500
100,000
28%
25%
25%
0%
12%
76,000
76,700
75,200
112,500
88,000
(A) Before application to expatriates of Totalization Agreements and EU Directives on social security.
(B) Before application of special expatriate tax rulings, e.g. Huyghe Reform, HQ ruling in France, treaty provisions and special statutory rules.
(C) This marginal income tax rate is applied to the next amount of additional income received.
(1) Austria - In column 8, Employer Social Security includes Social Security, employer part and other payroll taxes to be paid by the employer. The tax calculations are based on the assumption
that the annual salary is paid out in 14 installments (as usual in Austria) in order to achieve the most favorable tax rate.
(2) Belgium - An average of 7% communal tax has been applied for the calculations. For the employer social security in column 8, an estimate of 35% has been applied.
The calculations were based on the assumption of a non working spouse and the children being older than 3.
In column 4, the special social security contributions have been included in the calculation.
In column 10, the calculation includes an estimates of 3% crisis tax
(3) Denmark - Proposal is will reduce the corporate tax rate at 25%.
(4) Finland - In column 3, pension insurance payment of 4,6% is applied. A higher rate of 5,8% is applied to employees over years old.
In column 4, the National Income Tax and Municipal Tax are included. Church Tax is excluded. Municipal Tax ranges from 16% to 21%. .
In this calculation, the percentage of Helsinki (17,5%) is applied
(5) France - In column 3 and 7, the flat tax CSG / CRDS of 8% of which 5,1% is deductible is included. Above 100,000 the 11% rate applicable to passive income is used, DLF has opined this is an income tax.
2008 limitation on total personal income tax, flat tax , wealth tax and property tax to 50% of income not considered here
In column 3 and 8, 2007 French standard social security contributions rates and brackets and 2007 supplementary social contributions rates.
Assuming the employee is not a legal director or member of the board
In column 4, 2007 French income tax rates and schedules.
Assuming no other personal income is taken into account.
Column 10 does not consider local taxes such as professional tax
(6) Georgia - 2008 income tax rate is flat 25% and no social security additionally charged; integration. Corporate income tax is payable at the rate 15% of taxable income by enterprises carrying out economic activities in Georgia.
Georgian tax legislation does not provide special payroll taxation regime for single persons and married with two children ones.
(7) Germany - In column 3 - Social Security calculations including additional employee rate for nursing care is employee is between 23 and 65 of age with no children (where applicable)
In column 4 - The individual Income Tax includes solidarity surcharge; excluding church tax.
In column 7 - The marginal tax rates are with the solidarity surcharge of 5,5% of the income tax.
In column 9 - The solidarity surcharge of 5,5% of the corporate tax included.
In column 10 - The Corporate Income Tax excludes the local trade tax which is, for example, an additional 14% in Berlin.
(8) Greece - for employees insured prior to January 1, 1993.
(9) Hungary - In column 3, if the individual is a Hungarian national and is employed by a Hungarian entity, 8.5% pension contribution (capped at a salary-level of HUF 5,307,000 p.a.) and
4% health contribution are payable on the gross income.
(Furthermore the Hungarian entity has to pay 1% contribution the so called Unemployment Solidarity Fund.)
In column 7, the Hungarian tax rates are progressive up to 40%.
In column 8, if the individual is a Hungarian national and is employed by a Hungarian entity, the employer has to pay 29% social security contribution on the gross income and
HUF 3450 per month/person Health Fund contribution. (Furthermore the company is obliged to pay 1.5% Training Fund contribution.)
(10) Ireland - In column 3 and 8, Calculations in respect of the married individual assume that his/her spouse will not have any taxable income.
In column 4 - The standard rate of corporation tax for a trading company is 12,5%.
This rate applies to passive non-trading income. The rate of corporation tax payable by a company depends on whether the income earned by the company is trading or non-trading.
(11) Italy - In column 3, It is assumed that the local executive works in an Italian commercial company where the National agreement of "Dirigenti" (executive) of trading company is applied.
In column 4, before application of treaty provisions. For local tax purpose, it assumes that the individual lives in Milan.
In column 10, is included 33% for ordinary corporate tax and 4.25% for regional corporate tax ("IRAP")
(12) Latvia - The maximum annual income subject to social security contributions is LVL 19,900, however, this is likely to be increased to LVL 22,700.
(13) Netherlands - The partner's tax credit has been taken into account even though this credit can only be claimed by the partner. These calculations show the minimum social charges and not the maximum charges.
(14) Poland - There is no tax benefits due to the number of children. We assumed that the executive has non-earning spouse. In order to benefit from the preferential taxation in joint tax return,
the executive has to be married the entire tax year and there should be joint marital property regime between them
In column 3, the employee social security contributions include the healthcare contribution, which is not technically the part of social security,
but it is levied on the employee's remuneration and constitutes the additional burden.
The marginal tax bracket percentage is 40%.
(15) Portugal - In column 8, Assuming that they are Board members. Otherwise the social tax applicable would be 10% for the employee and 21.25% for the employer and a cap is also available.
In column 10, the corporate income tax includes a 10% municipal surcharge (25%+2.5%)
(16) Romania - No personal deductions are deducted for monthly gross incomes over ROL 30,000,000 (equivalent for approx. EUR 824)
The figures are rather estimatives, due to specific requirements regarding the computation of certain social security contributions (e.g. number of employees, risk of the activity etc.)
(17) Slovakia In column 4, should the spousal deduction and child bonus be applicable.
(18) Slovenia - In column 8, Employer Social Security includes the employer's tax on salaries paid. (if the monthly salary is in excess of SIT 750,000 employer's tax on salaries = 14,8%.
Employer's social security contribution = 16,1%)
(19) Spain - It is assumed that children are between 3 and 25 years old.
(20) Sweden - The employee's pension fee is 7% of the salary and benefits, capped at SEK 349,400. 12.5% of the paid pension fee is deductible against income and 87.5% is creditable against income tax
The pension fee is included in the preliminary tax withheld.
Employer social security contributions are 32.46% of the salary and benefits. No cap apply.
Corporate Income tax is a flat rate tax of 28%, however, due to the possibility to make tax allocations reserves the effective tax rate can be lower.
In column 7, the income tax rate includes the average Municipal Tax rate for Stockholm, Sweden (31%). The rate varies depending on where the individual is resident and range between 29% and 36%,
including church tax, which you pay if your are a member of the Swedish church (0.8-1.0%)
(21) Switzerland (Geneva) - In column 4, the Tax rates of the Canton and City of Geneva have been used. Minimum social charges shown.
(22) Switzerland (Zurich) - In column 10, Corporate Income Tax rate is progressive, highest rate is used. Taxes are without Church Tax. Minimum social charges shown.
(23) Turkey - In column 4, stamp duty has been included.
(24) Ukraine - All calculations reflects amounts per year
In column 3 and 8, the maximum amount subject to social security contributions is capped at UAH 4,100 per employee per month.
In column 8, the amounts are calculated based on the minimum total percentage of the employer social security contributions (37%) as it includes, in particular,
contributions to the social security fund against accidents at work that depends on the class of professional hazard established by the fund for each employer. The maximum total percentage is equal to 50%.
(25) United Kingdom - The calculations are based on the UK tax rates for the year ending 5 April 2008.
Social security rates are based on a "not contracted out" basis for State pension purposes. Contracted out rates result in slight reduction in social security cost up to £31,720.
If an employer pension scheme is contracted out the total employee social security will reduced by £432. The total employer social security figure will be reduced by £944 to £270.
(26) Brazil - The deductible amount per dependent is R$ 117,00/month per individual. The Social Security Contribution ceiling for the employee is R$ 275,96/month. In column 8, for the purpose
of this calculation some labor costs such as vacation, 1/3 additional salary for vacation, prior notice indemnity, etc. were not considered. This calculation included the Employer Social
Security (28,8%) plus the FGTS or Government Severance Indemnity Fund for employees (8,5%). In column 10, Corporate Income Tax (25%) plus Social Contribution Tax (9%).
(27) Canada (Ontario) - Calculations are based on the 2007 Federal and Provincial rates applicable in the Ontario Province. In columns 3 and 8, Employment Insurance payments are included.
Column 4 does not include the Ontario Health Care Premium.
(28) Mexico - Some States impose a 1% or 2% payroll tax which should be paid by the employer to the local authorities. In Mexico City, companies pay a 2% payroll tax.
(29) Australia - The amount in column 3 is based on the assumption that the taxpayer is not liable to an additional medicare levy surcharge of 1,5% on taxable income on the basis that the single
taxpayer (or the married taxpayer and family) is covered by private patient hospital insurance cover.
We have claimed spouse rebate of A$1,535 on the assumption the taxpayer maintains his/her spouse, the spouse's separate net income is less than
A$6,421, the spouse is a tax resident of Australia and he/she is not entitled to claim family tax benefit Part B (with children under age of 5)
For social security calculation, we have assumed the compulsory superannuation contribution obligation is satisfied by the employer in order to ensure the executive is still paid the gross amount of salary.
Compulsory superannuation contribution in Australia is 9% of base salary (capped at maximum earning base of A$122,240)
(30) China - Local PRC national employee hypothesis (Social Security is only applicable to local PRC national employees). In column 4, income tax is calculated based on
taxable income net of employee Social Security. In columns 3 and 8, the current Social Security Contributions rates applicable to the City of Shanghaï was used.
(31) India - The Indian tax year runs from April 1 to March 31. The calculations have, therefore been based on income earned during the year April 1, 2006 to March 31, 2007. The tax
rates for the year include a surcharge of 10% for incomes over and above Rs.8,50,000 and education Cess of 2% on total tax and surcharge.
An employee is eligible for a standard deduction from salary of Rs.30,000 or 40% (whichever is less) if income from salary is less than Rs.500,000 and Rs.20,000 (whichever
is less) if income from salary is more than Rs.500,000.
India has no system of social taxes. Instead for employees whose base salary is less than Rs. 6500 per month, there is a mandatory participation in Employee ProvidentFund
(EPF). Employee & Employer contribute @ 12% of base salary respectively. As in the given case, Salary is higher than Rs. 6500 per month there are no applicable
mandatory PF contributions
In Column 10, the maximum marginal tax rate for the Indian domestic company has been mentioned, i.e., 35% + 2.5% surcharge + 2% education Cess. However, foreign companies in
India are taxed at 41.82% (40%+2.5% surcharge + 2% education Cess).