Income Tax Comparison (2010)


#1

Just for reference, I was checking out income tax comparisons at higher levels of income. This is significant at a different end of the earnings table, for the likes of senior managers, hospital consultants, and so on.

Taking a salary of €150000 for a single person (£120000 in UK for management level comparison including civil service) , net income after tax is

Germany: €92,156.46 (parmentier.de/steuer/incometax.htm) (***Germany net tax rate: 38.5%***)
United Kingdom: £77,111.15 (listentotaxman.com/index.php) (***UK net tax rate: 35.7%***)
Ireland: €69,713 (taxcalc.eu/) (€85686 in private sector) (***Ireland net tax rate: 53.5%***)

That is a pretty monstrous disparity. Ignoring the large difference in cost of living in Ireland vs the other countries, the net take home salaries are lower by a huge amount in Ireland. If one was at that level of income, there is very little incentive to stick around. Once the government has bled these people for a year or two until they leave (inevitably), where then will they turn to?


#2

Interesting. Although for Germany its lower if you add in the church tax at 8%. Most people pay this as its hard to avoid if youre parents baptised you.


#3

Whats the tax wedge i.e. difference between what the employer pays gross and what the emploee gets net ?

8% church tax ? :open_mouth:


#4

wikied! en.wikipedia.org/wiki/Church_tax#Germany


#5

I heard most people simply opt out of Church…


#6

Maybe. I heard the church tax is automatically deducted unless you can prove you have formally defected from the religion you were baptised.


#7

Humanity really likes to challenge itself sweet mother-o-gawd!


#8

Hope the Bishop of Ferns isn’t reading


#9

I think the monstrous disparity lies in the value govts get from these people.

Look at the infrastructure and planning in the UK and especially Germany… and then look at Ireland.
For that money these people manage universal free healthcare and national motorway infrastructures, to name just two.
The Brits had a subway over 100 years ago and the Germans had Autobahns in the 1930’s.
This takes a hugely professional and apolitical management class; if Ireland the same management competencies they’d be a pleasure to pay.

Besides, as you mention, if they dont like it they can fk off to Germany.
(No point in them coming over here - UK - unless they can board up shop windows)


#10

Ok needle what you are saying is Ireland is inefficient and thus we have the need for higher taxes to compensate but we only have ourselves to blame but as a means to redressing the disparity we should emigrate or at least a large portion of the population emigrate to the UK or Germany, bringing down their performance output per worker average and Paddy doesn’t look to bad in your average EU tax basket.

Genius! 8DD


#11

The Irish figure of 53.5% net tax counts pension contributions as income tax. This is an inconsistent comparison with the other numbers. The private sector figure is more fair. This gives a net rate of 42.9% for Ireland.

The German figure seems to confuse income tax and wage tax. Wage tax is for employees and includes social insurance. This gives a German net tax rate of 47%
parmentier.de/steuer/steuer.htm?wagetax.htm

It’s worth noting that in 2008, the same person in Ireland would have had take home pay of 94405.79 or a net tax rate of 37%.


#12

The church tax is a tax on tax paid, so it is not 8% of gross, but 8% of the tax (so about 1600 euro for a single person on 100k a year).


#13

I wonder if the fact that UK and Germany have nearly 20 times the population of Ireland has anything to do with it.

Might not be comparing like with like. How do we compare with Denmark, Norway and Finland?


#14

If you do a comparison of income tax rates for people earning 35K, Irish pay the least by far. So our income tax system is more progressive than the others. Lenihan has hinted that next years replacement for PRSI will collect more tax from low and middle income earners.

I don’t know why anyone earning 150K+ would put all their wages through PAYE when you can just form a zero corporate tax company.


#15

You still have to pay tax on the money you pay yourself from the company don’t you?


#16

Old thread, but on one of the UK election blogs someone posted this graph from Wikipedia:

UK income tax and National Insurance as a percentage of taxable pay, and marginal income tax and NI rate (2016–17).

I thought it was a good format for comparison as it shows the actual percentage of your income paid in tax plus social insurance at different levels of pay (blue line), as well as the marginal rate (black line).

I flung together the same for Ireland, based on a single employed person paying class A, with a single person’s tax credit. The lines all mean the same thing as the UK graph, with purple added in for USC.

Ireland tax, USC and PRSI as a percentage of taxable pay, and marginal rates (2019).

In Ireland you are paying 20% of your income at €30k, 30% at €50k, and 40% at €100k. In the UK you hit 20% at £30k, 30% at £70k, and you hover around 40% between £125k and £160k. Quite a difference.

#17

Based on the OECD data for 2018, Ireland is the second worst OECD country to earn income from work at the upper margin of earnings (167% of the average annual gross wage earnings of adult, full-time manual and non manual workers in the industry), compared to lower earners (67% of the average wage earnings). And although this story is not new (we were in the same position back in 2014), the gap in effective marginal taxes charged on the higher earners relative to lower earners is getting worse.