Comparison of all income tax rates in Europe – where does the UK fit? | Personal Finances | Finance

While the news of the UK tax hike has angered the working population, it turns out the UK worker is not one of Europe’s biggest taxpayers, a number of other countries paying higher rates. While income tax has not been increased by the Chancellor despite the coronavirus crisis, national insurance has been increased by 1.25 percentage points from April 2022.

Income tax is the tax you pay on your income, but UK taxpayers receive a non-taxable personal income allowance, set at £ 12,570 for that year.

Income tax is classified into three brackets in the UK: base rate, higher rate and additional rate.

Those earning £ 12,571 to £ 50,270 pay an income tax rate of 20%, while those earning £ 50,271 to £ 150,000 pay 40%.

Those on the additional rate, who earn more than £ 150.00 per year, pay a tax rate of 45% on their income.

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Although income tax in the UK is generally not considered exorbitant, there are countries where workers pay significantly more than UK workers.

The income level at which the highest statutory personal income tax rates apply also varies considerably across Europe.

The countries with the ten highest rates are:

  1. Finland
  2. Sweden
  3. Denmark
  4. Austria
  5. Netherlands
  6. Belgium
  7. Slovenia
  8. Ireland
  9. Portugal
  10. Iceland

According to the Statista chart below, where you can see the full breakdown, the UK comes in 12th place alongside Spain, France and Germany.

Germany has a threshold of 47.5% for top earners – especially those earning more than € 282,934 per year.

The German income tax is a progressive tax, which means that the average tax rate – that is, the ratio of tax to taxable income – increases monotonously as the tax rate increases. taxable income.

Some countries pay considerably less than the UK and other large economies like Germany.

In the Czech Republic, the maximum rate of personal income tax is as low as 15%, just like Hungarians.

However, in the Czech Republic and Hungary this applies to all workers, regardless of their salary, as it is a flat tax rate.

Likewise, Estonians only have to pay 20%, which is around 25 percentage points less than the British.

But you only need to earn € 6,097 to pay the proportional flat rate tax rate in this northern European country.

The middle ranks include Slovakia, which has a personal income rate of 25 percent, and Poland, which has a top rate of 32 percent.

Mary I. Bruner