Which Europeans pay the most income tax and where do children make the biggest difference?

Personal income tax rates vary widely across Europe. Policies and tax structures contribute to these differences.

Income level, marital status and the number of dependent children all play a significant role in determining how much of gross wage earnings goes to tax.

So, which European countries levy the highest and which the lowest personal income taxes on gross wages?

Based on the OECD’s Taxing Wages 2026 report, Euronews Business takes a closer look at income tax rates. Social security contributions are not included in these rates.

Single person without children

The first scenario is a single person without children, earning 100% of the average wage. In 2025, for this option, personal income tax (PIT) varies from 6.6% in Poland to 35.3% in Denmark among 27 European countries, 22 of which are EU members.

The EU-22 average stands at 17.2%, while the OECD average is slightly lower at 15.5%.

Denmark is the only country exceeding 30%, while Iceland (27.1%) and Belgium (25.6%) are above 25%. Tax rates also exceed 20% in Estonia (21.6%), Finland (21.1%), Ireland (21%) and Norway (20.4%).

Among Europe’s top economies, Italy (19.1%) and the UK levy above the EU average while Germany (17.2%) matches it. Spain (17.1%) and France (16.7%) are slightly below.

In addition to Poland, Czechia (9.7%) is also in single digits. Switzerland and Slovakia also remain below 12%.

One-earner couple with two children

In most cases, a one-earner couple with two children pays less tax than a single person without children. The EU (17.2% vs 11%) and OECD (15.5% vs 11%) averages reflect this.

In this scenario, income tax rates vary from -6.5% in Slovakia to 31.8% in Denmark. A negative tax rate means taxes are refunded rather than deducted. Germany comes close to that threshold, imposing just a 0.7% rate.

A one-earner couple with two children also pays less than 5% in Poland (1.1%), Czechia (3.3%), Portugal (4.5%) and Slovenia (4.7%).

In this scenario, the rate still exceeds 20% in Estonia (21.6%), Finland (21%), Iceland (20.4%) and Norway (20.4%).

Two-earner couple with two children

In the third scenario, a two-earner couple with two children, both earning 100% of the average wage, pays slightly less tax than a single person without children. The EU-22 and OECD averages are 15.5% and 14.3% respectively.

In this scenario, rates range from 4.7% in Slovakia to 35.3% in Denmark.

Alex Mengden, economist at Tax Foundation, explained that in general, under a flat income tax system, households with two children are subject to the same PIT whether one or two earners. With progressive tax systems, two-earner couples pay higher taxes.

Why tax mix matters for country differences

Edoardo Magalini, analyst and statistician at OECD and also co-author of the report, points to various reasons for country-level differences.

“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,” he told Euronews Business.

“Some countries might depend more on the use of VATs or taxes on different types of income (such as corporate income taxes, capital income taxes, etc.), while others might depend more on labour taxes.”

Income tax alone does not tell the whole story

Magalini noted that the total tax burden on labour income also depends on other payments than PITs, such as social security contributions (SSC) paid by both employees and employers.

For example, Denmark stands out as the country with the highest PIT rate. However, workers there pay almost no social security contributions. On the other hand, France appears below the EU-22 average while they have a significant share of SSCs.

Mengden also pointed out that differential reliance on social contributions is the main driver of country-level differences. Social security contributions vary significantly across countries, affecting the overall take-home pay ratio.

John Hurley, senior research manager at Eurofound emphasised that generally countries with higher labour tax shares tend also to have more progressive tax systems – taxing higher earners more heavily and low wage earners less or not at all.

Where do children matter the most?

Comparing a single person without children and a one-earner couple with two children, the difference is notable in some countries. In Slovakia, the gap reaches 17.4 percentage points (pp), followed by Germany (16.5 pp), Luxembourg (12 pp) and Belgium (11.8 pp), all above 10 pp.

As the chart shows, the tax rate is the same in Estonia, Norway, Lithuania, the UK, the Netherlands, Sweden and Turkey.

Mengden noted that the difference in income tax rate for a childless single worker and a married couple with two children mostly reflects the generosity of child benefits that are channeled through the income 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 added.