Comment by aktenlage
11 hours ago
> half that money goes to taxes
That is a misguided simplification. Please correct this, before anyone starts to believe it for real.
11 hours ago
> half that money goes to taxes
That is a misguided simplification. Please correct this, before anyone starts to believe it for real.
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.
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%
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.
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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
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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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
And if we are comparing USA vs Germany, taxes to gas (car fuel) which is much more expensive in the EU, because of taxes.
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Is there any news source you wouldn't call propaganda?
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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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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?
>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.
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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.
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.
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
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Don't forget VAT
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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.
49% of that money goes to taxes
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.
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