Industrialized countries in comparison: Germans pay higher social security contributions and taxes than almost everyone else

The tax burden for employees' households is higher in Germany than in most other industrialized countries - and there is no sign of any noticeable relief.

Although the solidarity surcharge has been abolished for most taxpayers over the past year, the last comprehensive tax reform was a decade and a half ago. In 2005, the third stage of the red-green relief package came into force.

And when it comes to social security contributions, the only question now is when the feared sharp increase will begin.

Dietrich Creutzburg

Business correspondent in Berlin.

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Manfred Schäfers

Business correspondent in Berlin.

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The Organization for Economic Development and Cooperation (OECD) provides new comparative figures with a study presented on Tuesday.

It confirms that workers with average earnings in Germany are among the most heavily burdened in the world.

It is only a little different for married sole earners: They benefit from the fact that the tax authorities mentally distribute the income between both spouses (splitting).

Second highest total exposure

According to the evaluation, the German single without children, who earned 71,157 gross last year, had to pay 17.5 percent of this to the tax office and 20.2 percent to social security.

In comparison, the total exposure of 37.7 percent is the second highest among the industrialized countries examined.

It is only higher in Belgium at 39.8 percent.

Significantly lower social security contributions are noticeable in France, where the total burden of the average earning single person (without children) is 27.8 percent, around 10 percentage points lower than for their German colleagues.

In Switzerland it is another 10 percentage points less.

Typical dual earners with two children in Germany deduct relatively less from their gross salary than childless singles, but in an international comparison they are not in a better position - their burden is only surpassed by the Belgians: At 118,832 euros, they pay an average of 9.1 percent in taxes and 20 percent social security contributions.

The typified Belgian family has a total burden of 30.5 percent.

It is significantly lower in France (21 percent), Great Britain (19.5 percent) and the Netherlands (18.6 percent).

It is noticeably lower again in Switzerland (11.5 percent) and America (11.2 percent).

Traditionally, the OECD also examines the total burden of labor costs, i.e. gross earnings of employees plus employers' social security contributions.

This difference gives an idea of ​​the hurdles to be overcome if jobs are to be created.

In this regard, too, the picture is not very edifying from a German point of view: for childless singles, the burden is 48.1 percent, again it is only higher in Belgium.

The OECD calculates a “tax wedge” of 40.9 percent for German couples with two wage earners and two children.

Also in this case it is only higher in Belgium, France and Italy have exactly the same rate as Germany.

Difficult situation of the health and long-term care insurance funds

However, there are currently no noticeable reductions in taxes for employee households in sight.

The coalition agreement does not provide for any change in the income tax rate.

Federal Finance Minister Christian Lindener (FDP) is committed to ensuring that at least the hidden additional burdens from the interaction of inflation and progressive tax rates are compensated.

And in the case of social security contributions, which make up the majority of the total burden for small and medium-sized incomes in particular, an increase is looming in the coming years.

The traffic light coalition has not given a guarantee that they will continue to be limited to 40 percent of gross wages.

It is already stipulated by law that the contribution to unemployment insurance will increase from 2.4 to 2.6 percent on January 1, 2023.

With an annual salary of EUR 50,000, that is EUR 100 more for employees and employers.

In the pension insurance system, the government is currently expecting a stable contribution rate of 18.6 percent for 2023 and 2024 because the pension fund still has reserves.

After that, however, there is a risk of a jump of 0.9 points to 19.5 percent.

In the example, that would be 225 euros more per year for employees and employers.

However, the situation of the health and long-term care insurance funds is even more difficult.

As the AOK warned in April, statutory health insurance is facing a financial gap of 17 billion euros in 2023. Unless the government transfers additional grants, the additional contributions at the turn of the year would have to increase from an average of 1.3 percent to 2.4 percent.

In the example, that would be an additional burden of a further 275 euros, each for employees and employers.

It looks similarly bleak with the nursing care funds.

The CEO of the AOK Federal Association, Carola Reimann, has therefore already asked Linder to add the missing billions from the federal budget.

The finance minister should not wait until the fall, but must "immediately make it clear" how he intends to protect the contributors from further burdens.

Of course, that would leave all the less room for tax relief.