Personal income tax (PIT) rates for workers across Europe diverge sharply in 2025, according to the OECD's Taxing Wages 2026 report. The data, covering 27 European countries including 22 EU member states, shows that a single person earning the average wage faces a tax burden ranging from just 6.6% in Poland to 35.3% in Denmark. The EU-22 average stands at 17.2%, slightly above the OECD average of 15.5%.
Single workers: Denmark leads, Poland and Czechia at the bottom
For a single person without children earning 100% of the average wage, Denmark is the only country where the rate exceeds 30%. Iceland (27.1%) and Belgium (25.6%) follow above 25%, while Estonia (21.6%), Finland (21.1%), Ireland (21%), and Norway (20.4%) all exceed 20%. Among Europe's largest economies, Italy (19.1%) and the United Kingdom sit above the EU average, Germany matches it at 17.2%, and Spain (17.1%) and France (16.7%) are slightly below. In addition to Poland, Czechia (9.7%) also remains in single digits, while Switzerland and Slovakia stay below 12%.
These differences reflect each country's broader fiscal strategy. Edoardo Magalini, an OECD analyst and co-author of the report, explains: “First, countries have different approaches to their ‘tax mix’, depending on their revenue needs, the structure of their economy and also the historical development of their fiscal institutions. Some countries might depend more on the use of VATs or taxes on different types of income, while others might depend more on labour taxes.”
Family status reshapes tax burdens
When dependent children enter the picture, the tax landscape shifts dramatically. A one-earner couple with two children pays significantly less tax than a single childless worker in most countries. The EU-22 average drops from 17.2% to 11%, and the OECD average from 15.5% to 11%. In Slovakia, the rate becomes negative at –6.5%, meaning the state refunds more tax than it collects. Germany comes close to that threshold with a mere 0.7% rate. Other low-tax countries for this category include Poland (1.1%), Czechia (3.3%), Portugal (4.5%), and Slovenia (4.7%). At the other extreme, Denmark still imposes 31.8%, and Estonia (21.6%), Finland (21%), Iceland (20.4%), and Norway (20.4%) all remain above 20%.
For a two-earner couple with two children, both earning the average wage, the EU-22 average is 15.5% and the OECD average 14.3%. Rates range from 4.7% in Slovakia to 35.3% in Denmark. Alex Mengden, an economist at the Tax Foundation, notes that under flat income tax systems, households with two children face the same PIT regardless of whether one or two earners bring in income. With progressive systems, two-earner couples typically pay more.
Beyond income tax: social contributions and child benefits
PIT alone does not capture the full picture. Magalini stresses that total labour tax burden also includes social security contributions (SSCs) paid by employees and employers. Denmark, for instance, has the highest PIT rate but workers pay almost no SSCs. France, by contrast, appears below the EU-22 average in PIT but has a significant share of SSCs. Mengden adds that differential reliance on social contributions is the main driver of cross-country differences in take-home pay.
John Hurley, senior research manager at Eurofound, observes that countries with higher labour tax shares tend to have more progressive systems, taxing higher earners more heavily and low-wage workers less or not at all.
The impact of children on tax bills varies widely. Comparing a single childless worker with a one-earner couple with two children, the gap reaches 17.4 percentage points in Slovakia, 16.5 points in Germany, 12 points in Luxembourg, and 11.8 points in Belgium. In Estonia, Norway, Lithuania, the UK, the Netherlands, Sweden, and Turkey, the rate is identical for both scenarios. Mengden explains that this difference largely reflects the generosity of child benefits channeled through the tax code. “While some countries like Estonia, Lithuania, Norway, Sweden and Turkey show no difference here, this does not necessarily mean that they don’t offer generous child benefits, but rather that these might be working through other channels like publicly provided services, direct transfers, or free co-insurance for children,” he adds.
These findings underscore how tax systems across Europe embed distinct social and economic priorities. For workers and families, the headline PIT rate is only one piece of a complex puzzle that includes social contributions, child benefits, and the broader fiscal mix. As the ECB navigates stagflation risks and energy costs rise, understanding these disparities becomes ever more critical for households and policymakers alike.
