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
Net To
Employee
Column : 1
Euro
2
(A)
3
(B)
4
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
8,900
6,500
2,600
6,300
4,000
1,500
3,200
11,589
0
9,900
9,900
8,000
4,600
2,500
6,600
2,600
1,500
5,900
1,600
6,400
3,900
8,100
5,500
400
0
1,700
11,100
2,100
2,700
5,300
7,000
3,400
200
4,400
Argentina
Brazil (26)
Canada (Ontario) (27)
Mexico (28)
USA
USA and Illinois
USA and New York
50,000
50,000
50,000
50,000
50,000
50,000
50,000
USA and Reform Graetz(D)
USA and Texas
50,000
50,000
Total Net Cost To Employer (after
corporate tax benefit of deduction
of Total Gross Cost for a profitable
company)
9
Top Marginal
Corporate
Income Tax
Bracket
Percentage
10
15,600
16,300
2,600
17,500
700
16,800
11,800
24,547
0
9,900
9,900
14,000
16,000
5,400
28,200
6,900
15,500
5,800
1,600
3,100
7,100
6,300
11,900
5,700
1,700
5,000
15,500
10,300
16,200
7,000
7,000
10,800
2,600
5,500
65,600
66,300
52,600
67,500
50,700
66,800
61,800
74,547
50,000
59,900
59,900
64,000
66,000
55,400
78,200
56,900
65,500
55,800
51,600
53,100
57,100
56,300
61,900
55,700
51,700
55,000
65,500
60,300
66,200
57,000
57,000
60,800
52,600
55,500
25%
34%
10%
20%
25%
21%
26%
34%
15%
16%
30%
24%
19%
13%
31%
15%
20%
29%
35%
26%
28%
19%
27%
16%
20%
19%
20%
30%
26%
32%
27%
20%
25%
28%
49,200
43,800
47,300
54,000
38,000
52,800
45,700
48,900
42,500
50,400
41,900
48,600
53,500
48,500
54,000
48,400
52,400
39,600
33,500
39,600
41,100
45,600
45,500
46,800
41,400
44,600
52,400
42,200
48,800
38,800
41,600
48,600
39,500
40,000
35%
28%
43%
24%
13%
17%
23%
8,600
18,700
1,800
5,000
3,800
3,800
3,800
58,600
68,700
51,800
55,000
53,800
53,800
53,800
35%
34%
32%
28%
35%
42%
46%
38,100
45,300
35,200
39,600
35,000
31,000
28,900
92%
83%
0%
13%
3,800
3,800
53,800
53,800
25%
36%
40,400
34,400
68%
77%
92%
56%
70%
63%
83%
69%
84%
70%
82%
84%
78%
30%
30%
15%
34%
35%
39%
20%
27%
15%
40%
30%
21%
30%
4,500
2,600
0
6,000
2,100
3,000
6,100
6,000
3,600
100
3,100
2,300
200
54,500
52,600
50,000
56,000
52,100
53,000
56,100
56,000
53,600
50,100
53,100
52,300
50,200
30%
25%
17%
42%
30%
26%
41%
25%
17%
28%
24%
20%
30%
38,200
39,500
41,800
32,500
36,500
39,200
33,100
42,000
44,500
36,100
40,400
41,800
35,100
Marginal
Income Tax Rate
(on next Euro
of Income)
(C)
7
Employer
Social
Security
Total Gross Cost
To Employer
(Salary + SS)
5
Net % To
Employee
After Social
And Income
Tax
6
(A)
8
9,400
12,100
7,800
6,300
10,600
10,000
15,200
1,080
12,500
4,200
4,200
10,400
17,800
7,400
13,200
11,800
12,000
1,500
12,200
8,800
10,000
8,500
9,400
7,400
6,500
8,000
11,300
9,900
18,400
5,500
1,800
12,500
6,500
9,100
31,700
31,400
39,600
37,400
35,400
38,500
31,600
37,331
37,500
35,900
35,900
31,600
27,600
40,100
30,200
35,600
36,500
42,600
36,200
34,800
36,100
33,400
35,100
42,200
43,500
40,300
27,600
38,000
28,900
39,200
41,200
34,100
43,300
36,500
63%
63%
79%
75%
71%
77%
63%
75%
75%
72%
72%
63%
55%
80%
60%
71%
73%
85%
72%
70%
72%
67%
70%
84%
87%
81%
55%
76%
58%
78%
82%
68%
87%
73%
36%
54%
30%
13%
52%
20%
41%
42%
19%
30%
30%
40%
38%
44%
39%
23%
15%
23%
35%
42%
40%
32%
34%
16%
13%
19%
41%
37%
61%
29%
14%
35%
15%
20%
2,300
1,000
1,600
900
3,800
3,800
3,800
12,500
11,300
12,400
12,000
4,600
5,900
8,200
35,200
37,700
36,000
37,100
41,600
40,300
38,000
70%
75%
72%
74%
83%
81%
76%
3,800
3,800
0
4,600
46,200
41,600
800
1,100
0
6,000
1,000
4,800
5,900
5,500
5,600
100
2,600
2,200
200
15,000
10,600
3,900
16,200
14,000
13,800
2,700
10,000
2,400
14,800
6,600
5,700
10,900
34,200
38,300
46,100
27,800
35,000
31,400
41,400
34,500
42,000
35,100
40,800
42,100
38,900
11
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
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
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)
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
UAE (39)
Qatar
50,000
50,000
2,500
0
0
0
47,500
50,000
95%
100%
0%
0%
6,300
0
56,300
50,000
0%
12%
56,300
44,000
(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.
(D) USA and Reform Graetz is the total tax revenue neutral proposal of Professor Graetz of Yale University Law School we previously presented to US Tax Court and now to be presented to Obama Administration
(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 -reduced the corporate tax rate to 25% and more reform coming.
(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 12.1% with new RDS rate included is applicable to passive income is used, DLF has opined this is an income tax.Special rates of 30.1% for French
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, 2008 French standard social security contributions rates and brackets and 2008 supplementary social contributions rates.
Assuming the employee is not a legal director or member of the board
In column 4, 2008 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 - 2009 income tax rate is flat 19% and no social security additionally charged; integration. Corporate income tax is payable at the rate 15% of taxable income by entreprises 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 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%. More tax increases coming due to loss of wage competitivity.
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.
(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,
The marginal tax bracket percentage is 32%.
(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 estimative, 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.
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 2008 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 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 a new system of social taxes replacing Employee Provident Fund and now mandatory for all employees. New social security treaty completed with France as well as Belgium.
(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
India are taxed at 41.82% (40%+2.5% surcharge + 2% education Cess).
(32) Indonesia - In column 3, employee social security is 2% of the gross salary. This represents payment of pension funds (old-age insurance) incurred by the employee and
is deducted from the employee's salary.
In column 8, employer social security is 4.24% of the gross salary contributed by the employer. Included in the percentage is 0.54% insurance premium,
which is included as the employee's gross income in calculation. The 0.54% insurance premium is the lowest rate for companies of services industry.
The rate varies according to the type of industry the employer engages in.
(33) Israel - Male local executive hypothesis. Income Tax rates are lower for women.
(34) Japan - As an assumption for the calculation, the taxpayer's age is less than 40 years old
(35) Malaysia - It is assumed that in the case of a married couple with children, those children are under 18 years of age and the spouse has no personal income in Malaysia.
(36) Singapore - Local Singaporean national employee hypothesis (Social Security - CIF - is only applicable to Singaporean and Singapore Permanent Resident employees).
(37) South Africa - where expat is not required to return home at the end of the contract period, unemployment insurance fund contributions of 1% of Gross Salary
up to R106032pa is withheld from employee and an equal amount is contributed by the employer.
(38) Thailand - It is assumed that in the case of a married couple with children, the spouse is non-working and the two children are attending school in Thailand.
(39) UAE - The social security is calculated on the Gross Salary of the employee.
While calculating social security it does not matter whether or not the employee is married or single since the calculation is based as follows: 12.5% of employees gross salary is contributed by the employer, 5% of the
employees gross salary is contributed by the employee and 2.5% of the employees gross salary is contributed by federal government.
The social security only applies to UAE nationals and not expatriates.
There is no individual or corporate income tax in the UAE