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| ▲ | alberto-m 5 hours ago | parent | next [-] | | More precisely, given a salary of 85'000€, about 17'500 (20.5%) goes into income tax and about 16'800 (19.7%) goes into social contributions, though one can reduce the latter by taking a private health insurance*. The remaining 60% (Nettolohn) can be used to purchase things, usually paying 19% of VAT on them (though rent is exempt and food has a lower tax). So, “half goes away in taxes” is an exaggeration, but I can totally sympathize with the feeling. Especially since the quality of healthcare is declining and the pay-as-you-go pension system is only built to benefit the current generation of pensioners. * note that, if one is earning less than 77'000€ today or less than 84'150€ in 2027, one is prohibited to switch to a private insurance. One of the most regressive precepts of the German system. | | |
| ▲ | sva_ 5 hours ago | parent | next [-] | | I think you should also mention the ~17k Euro social contributions that your employer pays on top, which could otherwise be part of your salary. Then it is actually pretty much 50% | | |
| ▲ | alberto-m 5 hours ago | parent | next [-] | | Correct: if one takes as basis not the Bruttolohn but the total cost for the company, the sum of taxes and mandatory social contribution can very well reach the half of the income. The method of splitting employer-side and employee-side deductions seems just there to hide this fact. | | |
| ▲ | aktenlage 4 hours ago | parent [-] | | Most taxes are deducted when money is transferred between two parties. The view that one party pays it all (Brutto-Netto and VAT) seems wrong to me. I anyway doubt that the wages would be at the same standard if there wouldn't be any deductions (from the beginning). Wages in expensive cities are higher because the cost of living must be matched. Similarly salary negotiations account for deductions. Nobody wants a job that doesn't pay the bills. |
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| ▲ | KellyCriterion 5 hours ago | parent | prev | next [-] | | There are two terms in German salary: "visible" and "invisble" Brutto. The one is without "contributions from employer", which is a lie anyway since an employer makes a total comp perspective and he for sure includes his "contribution" into that | |
| ▲ | vel0city 2 hours ago | parent | prev [-] | | US also has federal employer-paid payroll taxes the employee usually doesn't see or think about. For a $110k salary the federal employer paid payroll taxes would be almost $8,500, or ~7.69%. They would also pay some amount to unemployment insurance, but that rate depends a lot state by state. I realize that's less than the Euro taxes, just wanted to share so everyone is aware of these often forgotten US taxes when compared. |
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| ▲ | sajithdilshan 5 hours ago | parent | prev | next [-] | | Don’t forget the mandatory radio broadcast fee every household has to pay even if you don’t read or watch any of those propaganda channels | | |
| ▲ | f1shy 4 hours ago | parent | next [-] | | And if we are comparing USA vs Germany, taxes to gas (car fuel) which is much more expensive in the EU, because of taxes. | |
| ▲ | encom 4 hours ago | parent | prev [-] | | Same in Denmark, and it really boils my piss. DR (Danmarks Radio) is 80% trash. If I was dictator in Denmark I would abolish it on the spot. I won't deny that DR produces things that are not trash or only mildly trash, but I have no interest in it. People who want it can fund it themselves. State financed reality TV is an abomination. |
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| ▲ | aktenlage 5 hours ago | parent | prev | next [-] | | Thank you. I think it is important to be (at least a bit) precise in this debate. I dislike the wording "social contribution", as these are (mandatory) insurances that benefit the insured person in case of sickness, retirement, loss of employment, etc. Discussion about the cost efficiency and fairness of the system are warranted, of course. Anyway, the current generation of retirees benefit greatly from it, so for them at least it was worth paying. Since you are accounting all those taxes, including the VAT on the citizen's side, companies only pay the Arbeitgeberanteil (you didn't mention) and the taxes on profit? | |
| ▲ | kuerbel 5 hours ago | parent | prev | next [-] | | >One of the most regressive precepts of the German system. If you mean the existence of two-tier private/public insurance, yes. The two-tier system was abolished in most of Europe for good reason. Either they abolished substitutive private insurance, restricted it, or transformed private insurers into regulated providers of universal basic coverage, e.g. very recently in the Netherlands. | |
| ▲ | 4 hours ago | parent | prev [-] | | [deleted] |
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| ▲ | usewik 5 hours ago | parent | prev | next [-] | | Having worked in another EU country, I can attest that I paid as much as 56% in taxes, so I believe a guy who says that he works in Germany and pays half in taxes. If you have other data, you are welcome to present it. | | |
| ▲ | chmod775 5 hours ago | parent [-] | | If you make 90k in Germany, you pay around 36k to mandatory (varying degrees) insurance/pension plus taxes if you're single. About 19.5k of that are actual taxes. If you're married/have children that total can drop to ~30k and will include health insurance for your entire family unit. | | |
| ▲ | criddell 5 hours ago | parent | next [-] | | If these people are to be believed, tax freedom day (the day you stop paying taxes and start paying yourself) in Germany is July 11 so just over 50%. https://en.wikipedia.org/wiki/Tax_Freedom_Day | | |
| ▲ | chmod775 4 hours ago | parent | next [-] | | I just gave you the actual numbers. The same numbers you will quickly get by using any of the many available net income calculators for Germany[0]. If you have a different idea, feel free to break the 90k down yourself. Don't lazily push the work on other people, asking them to puzzle together where some neglected Wikipedia articles' table of magic numbers actually comes from. Hint: It's a number made up by an interest group called the "German Taxpayers Federation", representing mostly entrepreneurs and wealthy taxpayers. The number being opaque is intentional, because its purpose is to mislead and support their advocacy for tax cuts. But by all means, don't let me stand in the way of your right to blindly believe whatever someone else wants you to. God forbid we input a five digit number into a calculator. What will it take? A notarially certified copy of tax returns mailed to your address? [0] First Google result: https://www.brutto-netto-rechner.info/gehalt/gross_net_calcu... | | |
| ▲ | criddell 4 hours ago | parent [-] | | You have to add in all the other taxes as well. For example VAT, gasoline, and property taxes are significant. That's generally what tax freedom day is meant to mean - when an average citizen is done paying all taxes. Edit: I was curious what the answer might be and couldn't find much. One source calculates the tax burden to be about 53% of income. https://www.steuerzahler.de/belastungs-check/?L=0 | | |
| ▲ | chmod775 3 hours ago | parent [-] | | > https://www.steuerzahler.de/belastungs-check/?L=0 The link you provided is the web page of the interest group I mentioned. They will literally try any trick in the book to get that number up, including adding a bunch of things that aren't even taxes, a boatload of things they call "quasi-taxes" with numbers presumably pulled from their ass, and adding expenses your employer incurs only to subtract them again immediately. Anything to get that percentage number up. But even they don't even call the resulting number "tax burden" - that'd be transparently stupid. They more generally call it a "burden ratio" (Belastungsquote). Just to give you an idea of how ridiculous their calculations are: If my wages are 90k in Germany, they do their calculations as if I earned ~105k just so they can immediately subtract the entire 15k again and call it a burden (for expenses my employer pays on my behalf). Does this still sound like something you can easily compare one country to the next and draw useful conclusions from? Of course not. In the next country it might come from an interest group with a different goal, a government calculation, or a Fox News writer. > You have to add in all the other taxes as well. For example VAT, gasoline, and property taxes are significant. That's generally what tax freedom day is meant to mean - when an average citizen is done paying all taxes. What you're trying to get at - hopefully because the alternative is a nonsense number with no purpose other than being a fun fact supporting a discussion about degrees of individual autonomy in modern societies - is called discretionary income, and it's only meaningful when adjusted for cost of living and compared across similar living situations. | | |
| ▲ | kakacik 3 hours ago | parent [-] | | > If my wages are 90k in Germany, they do their calculations as if I earned ~105k just so they can immediately subtract the entire 15k again and call it a burden (for expenses my employer pays on my behalf). Aren't you talking about social contributions that your employer is forced by law to pay on your behalf? You realize that if this was not in place, those money would go directly to you since your salary is whole sum your employer is paying towards your employment? Doesn't seem you grok it fully from your words. I am not claiming if its good or bad (dramatic global financial changes will test viability of all these systems rather well in upcoming years, I'd expect many people will be unhappy when their naive views hit reality of numbers). I am outside of such system, in mostly private social system in Switzerland (aka I save for myself, mostly) and wouldn't want it any other way. | | |
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| ▲ | 4 hours ago | parent | prev [-] | | [deleted] |
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| ▲ | ajmurmann 5 hours ago | parent | prev [-] | | Don't forget VAT | | |
| ▲ | chmod775 4 hours ago | parent [-] | | I can spend that in whichever tax jurisdiction I want and the VAT rate might be whatever depending on what one buys. If you want to go that route you'd then also have to adjust for cost/quality of living to stay intellectually honest, which means you'd then have to come up with some statistical consumer basket. It's a stupid idea to even start down that route in what fits into HN comments. | | |
| ▲ | kakacik 3 hours ago | parent [-] | | Do you pay VAT on almost anything? It affects how much your actual disposable income is and thus literally how much you can purchase. Nobody said its going to be trivial to calculate, reality doesn't care about that. |
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| ▲ | chmod775 5 hours ago | parent | prev | next [-] | | You however have to admire getting things that wrong in the same paragraph that tells one to not trust what one sees in Google searches. Though I suppose HN comments would show in Google searches... maybe their humor just went over my head. | |
| ▲ | bbmatryoshka 5 hours ago | parent | prev | next [-] | | 49% of that money goes to taxes | |
| ▲ | pembrook 5 hours ago | parent | prev | next [-] | | Sorry, you’re the one who is misguided here. Government spending as a % of GDP in Germany is exactly 50%. So definitionally half of all money goes to taxes. Are you counting in VAT on everything OP spends that money on? Are you counting capital gains taxes OP pays when investing that money? Are you counting the taxes paid by the employer for his role (which defacto come out of his pay, just before he gets it)? The property taxes he pays to live? The employer doesn’t look at the employees salary as the only cost. Employers look at things rationally, using the all-in cost to employ someone (the combined total of all salary and government mandated taxes and benefits contributions). In many European countries this is 2X the persons salary or more. | |
| ▲ | greenavocado 5 hours ago | parent | prev | next [-] | | [flagged] | |
| ▲ | 5 hours ago | parent | prev [-] | | [deleted] |
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| ▲ | groundzeros2015 5 hours ago | parent | next [-] | | US consumers also have high standards for healthcare. I interact with a lot of engineers moving from Europe and US and it’s never how US politics portray it. German friends talk about paying for private insurance because the public one is so bad. | | |
| ▲ | bcrosby95 3 hours ago | parent | next [-] | | How do you define good/bad? People mostly seem to talk about wait time for socialized health care, but where we live in US there's plenty of specialists that you gotta book months ahead of time. When my mom needed a pacemaker it was a 4 month process. My wife's OBGYN is booked a year out - god help you if you miss an appointment. Anyone working in pediatrics look like zombies. Urgent care clinics have been big in our region. The primary system is obviously overloaded, and 2 of these have popped up in the last 3 years. It's more expensive per visit than our primary physician, but cheaper than an ER visit, which could easily take half a day anyways. | |
| ▲ | flohofwoe 5 hours ago | parent | prev [-] | | Complaining about the service quality for public health insurance customers in Germany is pretty much the definition of "first world problem" though. FWIW I never switched over to private insurance even though my income would allow it, also once you get above a certain age you can't switch back and that's when the private insurers really start to rip you off ;) | | |
| ▲ | groundzeros2015 5 hours ago | parent [-] | | And despite that they are willing to pay, because if you are out of poverty your health is a high priority! So yes, Americans love consuming healthcare. Is there any category they aren’t a high consumer of? You can’t measure efficiency only looking at the input side. | | |
| ▲ | flohofwoe 5 hours ago | parent [-] | | I think the main reason why high income Germans switch to private health insurance is less about service quality, but because they may actually pay less than public insurance (at least until they get near pension age). Can't talk for US citizens of course. |
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| ▲ | usewik 5 hours ago | parent | prev [-] | | Who is making this 'health care argument' you are responding to? | | |
| ▲ | flohofwoe 5 hours ago | parent [-] | | Maybe fully read the comment I'm responding to? The implication is that European countries (and especially Germany) spend an extraordinary amount of tax money on health care and that's why taxes are so high. This is basically wrong from start to finish. You also don't pay half of your wage in taxes in Germany. The chunk that's removed from your gross wage before pay out includes your mandatory employee insurances (health-, pension- and unemployment-insurances), and that's how you end up "losing" about 30% to 45% of your gross salary before pay out (the actual "tax part" is somewhere between 10 and 25% depending on income, marriage status etc...) |
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