Personal income tax and social security systems vary significantly across Europe, as does the overall burden placed on workers’ earnings. For most employees, however, the key question is simple: how much of their salary do they actually keep after taxes and mandatory deductions?
To answer that question, Euronews Business used Eurostat data to calculate annual net earnings as a percentage of gross earnings, measuring the share of income retained by workers after deductions.
In some cases, the result is even negative, meaning workers receive more in net income than their gross salary through tax credits and family-related benefits.
The proportion deducted from earnings also varies depending on family status and whether an employee has dependent children. The analysis focuses mainly on a single worker without children, while also examining other household types.
Cyprus at the top
According to Eurostat data for 2025, published in 2026, the share of gross earnings lost to taxes and other deductions varies widely across Europe.
For a single worker without children on an average wage, the rate ranges from 15.1% in Cyprus to 41.5% in Romania, compared with an EU average of 29.1%.
Across the EU, average annual gross earnings amount to €37,958, while average net earnings stand at €26,929, meaning €11,029 goes towards taxes and other deductions.
Beyond Romania, six other countries see more than one-third of gross earnings absorbed by taxes and deductions:
- Lithuania (39.1%)
- Belgium (37.6%)
- Slovenia (36.9%)
- Germany (34.8%)
- Denmark (34.0%)
- Hungary (33.5%)
The figure is also above the EU average in Luxembourg (32.6%) and Croatia (31.5%).
At the opposite end of the scale, Greece follows Cyprus with just 17.0% of gross earnings going towards taxes and other deductions.
Germany highest among major EU economies
Several countries cluster in the 22–25% range, including:
- Czechia (21.6%)
- Ireland (21.6%)
- Portugal (21.8%)
- Spain (22.1%)
- Bulgaria (22.4%)
- Malta (23.1%)
- Estonia (23.2%)
- Italy (24.1%)
- Sweden (24.5%)
- Slovakia (24.6%)
Among the EU’s four largest economies, Germany records the highest level of deductions at 34.8%, while Spain has the lowest at 22.1%.
The corresponding rates are:
- France: 26.2%
- Italy: 24.1%
Overall, southern European countries tend to have lower deduction rates, while higher rates are more common in central and eastern Europe. Western Europe presents a more mixed picture, with Belgium and Germany among the countries imposing the heaviest burdens on earnings.
Children make a big difference
Having dependent children can significantly reduce the share of earnings lost to taxes and deductions, particularly in single-income households.
For a household with one working parent and dependent children, the rate ranges from -3.3% in Greece to 33.4% in Romania.
The figure is also negative in Poland (-0.6%), meaning net earnings exceed gross earnings thanks to tax refunds and family benefits.
The EU average falls to 8.0%, compared with 29.1% for a single worker without children.
Romania remains the highest, while Lithuania follows at 23.8%, almost 10 percentage points lower. Apart from those two countries, only Hungary, Slovenia, Finland and Denmark record rates above 20%.
Germany stands out
When comparing a single worker without children to a single-income couple with two children, Germany shows the largest difference.
The share of earnings lost to taxes and deductions falls from 34.8% to just 0.2%, a drop of 34.6 percentage points.
In both cases, annual gross earnings remain €47,514. However, a couple with two children receives net earnings of €47,424, compared with €31,000 for a single person without children - a difference of €16,424.
For dual-income couples with two children, the share of earnings going towards taxes and deductions is lower than for a single worker without children in every EU country except Greece.
Poland records one of the biggest differences at 11.5 percentage points. In Greece, by contrast, the share remains unchanged in both scenarios.
Income tax only tells part of the story
Alex Mengden, an economist at the Tax Foundation, said differences in labour taxation across Europe cannot be judged solely through income tax rates.
“For example, the tax burden on labour in Denmark is lower than in Poland, but Denmark ranks higher because labour taxation relies almost entirely on personal income tax,” he told Euronews Business.
“By contrast, in Poland, social contributions account for almost two and a half times the amount paid in income tax for an average worker, which pushes the country to the bottom of the ranking.”
Source: Euronews Business
