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> Well, correct me if I'm wrong - but according to this random website I found in 5 seconds of googling: I will, because you are! Unfortunately, it's really ea

> Well, correct me if I'm wrong - but according to this random website I found in 5 seconds of googling: I will, because you are! Unfortunately, it's really easy because the German government applies a simple slight of hand. They call it a "gross employer contribution", which increases this band of income tax beyond the 45% you pay after the GEC. [1] It works like this: As your employer is paying your wage, amount X, they pay half of your contribution to social insurance companies. This so called "employer contribution" is subtracted before you are paid out your gross wage, amount Y, which you see on your pay slip. Now, on amount Y, you pay the other half of social insurance fees and taxes. Then you get your net, amount Z. Most sources you will find online will only talk about Y and what is subtracted to get to Z. But your employer pays your full wage for what your work is worth, and they of course are not as nice to gift your one half of social insurance payments to you. [1]: https://publikationen.bundesbank.de/publikationen-de/berichte-studien/monatsberichte/monatsbericht-juni-2024-932980?article=abgabenlast-auf-arbeitseinkommen-im-internationalen-vergleich-zum-unterschied-von-rentenbeitrag-und-steuerzahlung-932986 https://publikationen.bundesbank.de/publikationen-de/bericht...

gambiting 1y ago
I mean sure, but does that actually add up to over 50% of your income? Here in the UK it works exactly the same as you described, but the NI is 10% of your income - even if you are in the highest band for incomne tax(also 45%) you wouldn't get to 50% overall, maybe if you make millions a year that average would start getting close to 50% (and if you do, congrats!) And can I comment on the fact that Germany seems to be incredibly generous with their bands - the 45% band only kicks in at 280k euro, so like maybe 0.00001% of all workers are in that band? Here in the UK you start paying 45% from £125k and up. Anyway - the reason why I'm asking is because UK taxes and social obligations seem to be crazy high as it is, but even they won't get you to 50% total, not unless you literally make millions in income per year.
- selfmodruntime 1y ago
  No, it adds up to almost 50% of your wage. People who make millions of dollars (freelancers, company shareholders, etc) pay capital gains taxes of 25%. High earning people have capital, not a wage, either by way of company shares or asset payouts. They pay a tiny bit more tax and no social obligations You forget that the 42% band kicks in at 68000 (up until 280k) not 10k from the median wage. You pay this with 1.2% of the median wage, when in the distant past (around 1960) you had 42% at 15 times the median wage. They never changed these bands to adjust for inflation.
  - gambiting 1y ago
    >> People who make millions of dollars (freelancers, company shareholders, etc) pay capital gains taxes of 25%. High earning people have capital, not a wage, either by way of company shares or asset payouts. They pay a tiny bit more tax and no social obligations Yes, obviously - it works the same way here. You just said that "anywhere in Germany" you will pay 50% of your income in taxes, so I'm asking if your average worker actually pays that, or even a high earning IT worker/lawyer/doctor, or just somone who takes home millions in pay(not capital gains) so that the averages catch up. >>You forget that the 42% band kicks in at 68000 (up until 280k) not 10k from the median wage. I didn't forget, but like I said 3 comments earlier - your average will work out closer to 30% not 50%(I'd guess) because you only pay it on anything above the threshold, not on your entire income. Again, Germany seems very generous here - in the UK you start paying 40% once you cross £50k/pa.
    - selfmodruntime 1y ago
      > You just said that "anywhere in Germany" you will pay 50% of your income in taxes, so I'm asking if your average worker actually pays that I earn about 60k (the government pays me, so you can look this up) and that is my effective rate of tax.
  - deleted 1y ago
    [deleted]
- alexey-salmin 1y ago
  I don't know about Germany, but in France for 100k gross salary, the employer social contributions will be around 40k, the employee social contributions another 20.5k, then 15.5k income tax. In the end 140k that employer pays result in less than 64k take-home salary. The real tax rate is around 54%. So, I can't verify what OP says about Germany but I can easily believe it. You can see chatgpt calculations here (and they do match my experience): https://chatgpt.com/share/68e64456-020c-800b-8443-1a2726e9a3e4 https://chatgpt.com/share/68e64456-020c-800b-8443-1a2726e9a3...
  - gambiting 1y ago
    Right, but I've never met anyone who looks at it this way - this part: "the employer social contributions will be around 40k" Is not your salary. This is what the employer has to pay to keep you. So even in your example your tax on your earnings is around 35%. The fact that the employer has to pay another 40k to keep you employed is......well, shocking, but I wouldn't say that's a tax rate on your earnings - for the simple reason that if the government reduced the employer contribution to zero it wouldn't change anything about your take home salary(unless your employer decided to be generous and give you a raise).
    - alexey-salmin 1y ago
      > Right, but I've never met anyone who looks at it this way - this part: "the employer social contributions will be around 40k". Is not your salary. I don't know, maybe you should speak more to people about this. Literally everyone who I discussed it with (like dozens of people) see it in the same way: * There's the money your employer spends to pay your salary * There's the money you take home * Everything in between is the government tax. There's absolutely no difference between "employer social contributions" and "employee social contributions" except in the name Well now I kind of know one person who sees it differently, but this PoV still doesn't make sense to me. > for the simple reason that if the government reduced the employer contribution to zero it wouldn't change anything about your take home salary(unless your employer decided to be generous and give you a raise). Believe it or not, but for multi-national companies job offers in France are smaller for this very reason: you have a fixed budget to hire an employee, you subtract the "employers contributions" and calculate the gross salary you can offer in various countries where you have legal entities. There's also the "adjust to local market part", it's not a single-factor formula of course, but "contributions" play a huge role in it. After all budget is budget, you can go lower if you like but you can't go higher.
KPGv2 1y ago
> They call it a "gross employer contribution" It feels disingenuous to me to see "someone else pays tax, so that counts as a tax on me" leveled as a serious argument. Maybe it's just my cold pragmatism speaking, but if your employer suddenly didn't have to pay that tax, I don't think they would bump your salary up. Americans make this same argument (they call it "trickle down economics"). So far, it doesn't seem to have worked out for them.
- selfmodruntime 1y ago
  > It feels disingenuous to me to see "someone else pays tax, so that counts as a tax on me" leveled as a serious argument. They don't pay tax. They pay half of the social insurance fee for their employer. Of course that half is part of the wage you're being paid. > Maybe it's just my cold pragmatism speaking, but if your employer suddenly didn't have to pay that tax, I don't think they would bump your salary up. I could certainly use that range to negotiate my salary. > Americans make this same argument (they call it "trickle down economics"). So far, it doesn't seem to have worked out for them. None of this has anything to do with trickle down economics. The trick is that if social insurance payments go up, which they do a lot, my employer is charged automatically and I no longer have that room for negotiating a raise.

gambiting 1y ago

I mean sure, but does that actually add up to over 50% of your income? Here in the UK it works exactly the same as you described, but the NI is 10% of your income - even if you are in the highest band for incomne tax(also 45%) you wouldn't get to 50% overall, maybe if you make millions a year that average would start getting close to 50% (and if you do, congrats!) And can I comment on the fact that Germany seems to be incredibly generous with their bands - the 45% band only kicks in at 280k euro, so like maybe 0.00001% of all workers are in that band? Here in the UK you start paying 45% from £125k and up. Anyway - the reason why I'm asking is because UK taxes and social obligations seem to be crazy high as it is, but even they won't get you to 50% total, not unless you literally make millions in income per year.

selfmodruntime 1y ago
No, it adds up to almost 50% of your wage. People who make millions of dollars (freelancers, company shareholders, etc) pay capital gains taxes of 25%. High earning people have capital, not a wage, either by way of company shares or asset payouts. They pay a tiny bit more tax and no social obligations You forget that the 42% band kicks in at 68000 (up until 280k) not 10k from the median wage. You pay this with 1.2% of the median wage, when in the distant past (around 1960) you had 42% at 15 times the median wage. They never changed these bands to adjust for inflation.
- gambiting 1y ago
  >> People who make millions of dollars (freelancers, company shareholders, etc) pay capital gains taxes of 25%. High earning people have capital, not a wage, either by way of company shares or asset payouts. They pay a tiny bit more tax and no social obligations Yes, obviously - it works the same way here. You just said that "anywhere in Germany" you will pay 50% of your income in taxes, so I'm asking if your average worker actually pays that, or even a high earning IT worker/lawyer/doctor, or just somone who takes home millions in pay(not capital gains) so that the averages catch up. >>You forget that the 42% band kicks in at 68000 (up until 280k) not 10k from the median wage. I didn't forget, but like I said 3 comments earlier - your average will work out closer to 30% not 50%(I'd guess) because you only pay it on anything above the threshold, not on your entire income. Again, Germany seems very generous here - in the UK you start paying 40% once you cross £50k/pa.
  - selfmodruntime 1y ago
    > You just said that "anywhere in Germany" you will pay 50% of your income in taxes, so I'm asking if your average worker actually pays that I earn about 60k (the government pays me, so you can look this up) and that is my effective rate of tax.
- deleted 1y ago
  [deleted]
alexey-salmin 1y ago
I don't know about Germany, but in France for 100k gross salary, the employer social contributions will be around 40k, the employee social contributions another 20.5k, then 15.5k income tax. In the end 140k that employer pays result in less than 64k take-home salary. The real tax rate is around 54%. So, I can't verify what OP says about Germany but I can easily believe it. You can see chatgpt calculations here (and they do match my experience): https://chatgpt.com/share/68e64456-020c-800b-8443-1a2726e9a3e4 https://chatgpt.com/share/68e64456-020c-800b-8443-1a2726e9a3...
- gambiting 1y ago
  Right, but I've never met anyone who looks at it this way - this part: "the employer social contributions will be around 40k" Is not your salary. This is what the employer has to pay to keep you. So even in your example your tax on your earnings is around 35%. The fact that the employer has to pay another 40k to keep you employed is......well, shocking, but I wouldn't say that's a tax rate on your earnings - for the simple reason that if the government reduced the employer contribution to zero it wouldn't change anything about your take home salary(unless your employer decided to be generous and give you a raise).
  - alexey-salmin 1y ago
    > Right, but I've never met anyone who looks at it this way - this part: "the employer social contributions will be around 40k". Is not your salary. I don't know, maybe you should speak more to people about this. Literally everyone who I discussed it with (like dozens of people) see it in the same way: * There's the money your employer spends to pay your salary * There's the money you take home * Everything in between is the government tax. There's absolutely no difference between "employer social contributions" and "employee social contributions" except in the name Well now I kind of know one person who sees it differently, but this PoV still doesn't make sense to me. > for the simple reason that if the government reduced the employer contribution to zero it wouldn't change anything about your take home salary(unless your employer decided to be generous and give you a raise). Believe it or not, but for multi-national companies job offers in France are smaller for this very reason: you have a fixed budget to hire an employee, you subtract the "employers contributions" and calculate the gross salary you can offer in various countries where you have legal entities. There's also the "adjust to local market part", it's not a single-factor formula of course, but "contributions" play a huge role in it. After all budget is budget, you can go lower if you like but you can't go higher.

KPGv2 1y ago

> They call it a "gross employer contribution" It feels disingenuous to me to see "someone else pays tax, so that counts as a tax on me" leveled as a serious argument. Maybe it's just my cold pragmatism speaking, but if your employer suddenly didn't have to pay that tax, I don't think they would bump your salary up. Americans make this same argument (they call it "trickle down economics"). So far, it doesn't seem to have worked out for them.

selfmodruntime 1y ago
> It feels disingenuous to me to see "someone else pays tax, so that counts as a tax on me" leveled as a serious argument. They don't pay tax. They pay half of the social insurance fee for their employer. Of course that half is part of the wage you're being paid. > Maybe it's just my cold pragmatism speaking, but if your employer suddenly didn't have to pay that tax, I don't think they would bump your salary up. I could certainly use that range to negotiate my salary. > Americans make this same argument (they call it "trickle down economics"). So far, it doesn't seem to have worked out for them. None of this has anything to do with trickle down economics. The trick is that if social insurance payments go up, which they do a lot, my employer is charged automatically and I no longer have that room for negotiating a raise.