A chart depicting what employers must spend to pay each net Euro to an employee.
Damn you Cyprus!
Carlos the Worker writes:
“It appears us Irish workers are second cheapest in Europe… While you’re at it, check out Denmark…”
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Everything. As It Happens.
Belgium!
Jayney!
Am I missing something this is not about the price each worker earns but the cost of employing an individual based on tax etc. So the example every worker gets a euro and the rest of the cost is what GOV get??
Agreed. This is about the taxation load over employment.
Makes you think: we have a very low nominal corporation tax (and ridiculously low effective tax), we are 2nd lowest on employment related tax. We are not even the highest on VAT, and stamp duty has dropped a lot. So were is all the money coming from? I suspect they will have to go for the jugular with the property tax and water charges.
I suspect that incorporating those taxs wouldn’t change our position.
Exactly. We pay some of the lowest taxes in Europe, despite are moaning. Germany on the other hand get shafted in their pay checks.
The upside of course is they have all their medical care paid for, great public transport etc etc.
Yes that is what I would have thought too. I would have thought it included payments your Employer has to make to the govt. on your behalf e.g. any social insurance contributions, so Employers PRSI
this does not mean that we are the cheapest workers in europe – this is the total cost to the employer, per euro spent.
so a widget mechanic in IE who earns €50k per year, costs his/her employer €67k per year to employ, but the same worker who earns €25k a year in Cyprus costs the employer €29.5k per year.
I read your comment twice, but it’s a bit hard to understand. Please use a bit of punctuation to make it a bit clearer.
“Am I missing something this is not..”
This is in response to “Am i still On this Island” above
Tom, I’m dyslexic I apologises you find it so difficult but, I can assure you not half as hard as I find living with it
Puts the government spin of ‘No more taxes on work’ into perspective. Just crucify us “after tax”…
the High rates of Employer Social Security and Income tax are how the high standard of services are provided in much of Europe, viz France, German and Belgian Health Services. Here we pay (comparatively) low rates of Employer PRSI and Income Tax and have much inferior and underfunded services as a result.
Which would you rather have slightly more money in your pocket that still won’t allow you to afford proper health insurance or higher taxes and the knowledge that if you get sick you won’t spend 3 days on a trolley in a corridor waiting for a bed?
I appreciate that we are all taxed to the hilt as it is and its not as simple as raising taxes but people need to understand that the reason why other countries in the EU have such good welfare and health services is because they pay a higher percentage of their income for them.
Do they really though? Or do their employers pay a larger chunk so they escape the likes of a health levy, insurance levy, social charge, PRSI, PAYE, household charge (not a council tax, the HC isn’t use for local government) etc etc?
I’d really like to see case studies of an average worker from each country and who pays what to whom. I’m not saying we’re overtaxed or undertaxed, and like many I’d be happy to pay more for a decent set of state services. I just always get the feeling the gap between what we pay versus what a Swede pays isn’t as large as the gap in quality and range between our services and theirs.
You’re probably right that the gap in services isn’t as large as the gap in taxation and that is no doubt down to other variables such as efficiency of public service, economies of scale etc but the fact remains that the countries that have better services pay much higher rates of tax and employers make more contributions also. That is a double edged sword however as it is a barrier to creating employment, I recall that was an issue in France a few years ago with Employers groups saying they couldn’t afford to employ people because of the levels of contributions they had to make.
I spent some time in Belgium a few years ago and was very impressed by the services/public transport etc, it was pointed out to me that they had an upper tax bracket of somewhere around 61% iirc and their net tax rate was much higher than ours at the time.
Currently living and working over in Germany, and I can tell you Germans pay a shedload in charges and taxes, it’s actually just under 45% for anyone earning over €800 and up to €4,500 a month. When you break it down, it works out around 10% for your health insurance, 8% for your pension, 22% tax, and then the rest is made up from church tax and social insurance. And your employer matches what you pay on health insurance, pension, church tax and social insurance. So if you earn €2000 a month, then your employer has to pay €2440 in total.
At first I was taking aback by how much is gone already at the end of the month, but knowing that whatever happens to you health wise, that your covered, and that you’ll get first rate service, and won’t have to sit in A&E for 24hrs to get a bed, or wait 3 months to see a consultant, is an unbelievable weight off your back!
“what employers must spend to pay each net Euro to an employee”
That is gibberish.
‘Must spend’ should be ’employment cost’, and a better indication of this cost would be a percentage of an employee’s gross salary, specifying the employer costs only.
The chart above is not just employer costs.
Income tax is paid by the employee, as is employee social security.
The employees take home net pay is affected by this, not the employer cost.
+1
I agree.
To state that income tax is a cost to the employer is plain wrong, it is incurred by the employee.
Who is “paying” for the taxes is irrelevant in this analysis. This is about how much money leaves an employer’s bank account for every euro the employee takes home. i.e., taxation load (government cut) over employment.
A more tangible approach would be to make a chart
posted before finishing… I meant to say that “A more tangible approach would be to make a chart showing government cut on every euro gone towards labour costs”. Essentially the same, but easier to read.
+1
http://newdirectionfoundation.org/documents/public/attachments/New%20Direction%20-%202014%20Tax%20Burden%20of%20Typical%20Workers%20in%20the%20EU.pdf
That is a link to the PDF of the report this image is contained in.
Exactly. Page 8 says exactly that. Thanks.
A more tangible approach would be to make a chart showing government cut on every euro gone towards labour costs
Government cut.. ok.
You have additional costs to the employer on top of the gross salary they pay an employee, and employee taxes also on their gross pay.
However the person who used that chart – ‘Carlos the worker’, stated it was what employers must spend. It’s misleading and inaccurate.
Hey Anne,
Actually Carlos the Worker didnt say that, just that we’re “second cheapest” which may be overly-simplified, but isn’t what you claim he said. Pedant. I am.
Hey Anne, actually I didn’t write that. i referred to irish workers as “2nd cheapest” in Europe, which may in itself be an over-simplification, but that’s it. Truthfully I felt I had only a very basic understanding of the chart, but I do think the supposition that we are therefore “cheaper” to our employers (in a “per cent” sense) is based in fact. You know what would be cool, more debate about this kind of stuff in our everyday lives and less of the bread and circus stuff. Ah, but I digressssss.
Sure, no bother Carlos.
I’ll have to have a think about this some more.
In terms of us being one of the “cheapest”. I’m not sure that’s the case.
Ok, for example, you have an employee earning 50k in Ireland & another earning the same, in let’s say Denmark.
Their gross salary, in both countries is 50k.
The additional costs to the employer in each country is the ’employer social security’.
Now in Denmark, there seems to be low or no employer social security. So there is no additional cost on top of the 50k salary to the employer in Denmark.
Their income tax is much higher than ours though.
So, the employees net salary after taxes in Denmark is less, compared to Ireland, but in Ireland it has cost the employer more (50K + employer social security).. So we’re not in fact “cheaper to our employers”.
The chart gives an average indication of how much needs to be earned gross, for every net euro, but it’s not a cost to the employer as such.
given that i lose 56% of my gross earnings this chart makes me confused.
am i in the minority?
either this graphic bollix or there’s a lot of people not paying much income tax.
which is it?
You certainly are in a minority in your gross income level to pay that level of tax (unless you are paying emergency tax).
Yes, a lot of people pay very low taxes in Ireland.
really!? (and i’m not being sarcastic).
not very financially savvy so will check it out.
thanks!
It takes an average rate of tax and doesn’t include things like income levies.
The aim of the exercise was to create a metric for comparing the cost of employing people across a range of different countries.
Comparing it to your pay packet is missing the point.
The aim of the exercise was to create a metric for comparing the cost of employing people across a range of different countries.
Wrong. Again.
Income tax is given in the metric. This is not a ‘cost of employing’ anyone.
PAYE – Pay as you earn. You – the employee.
You’re an idiot, Anne.
It sucks being wrong, I know.
Move on and learn from it.
Think harder, going forward.
I’d suggest you read the report and see what an absolute fool you just made of yourself, but I reckon you’d just rather carry on being an ignorant shit-heel.
I did read the report.
You googled the image used, well done. Did you read it yourself?
Nowhere in it does it state- “The aim of the exercise was to create a metric for comparing the cost of employing people across a range of different countries”
Nowhere.
Here. Page 4. You must have missed this bit –
Objective of the study
The purpose of this study is to compare the tax and social security burdens of salaried employees in the 28 Member States of the European Union and, in doing so, determine a “tax liberation day” for individuals who are working in those countries.In addition, the study tracks year-to-year trends in the taxation of labour.
And yet you say to Rosie “Comparing it to your pay packet is missing the point”.
If you had read that page until the end you would have encountered:
This study aims to create an “apples to apples” comparison of tax rates, with data that reflect the reality experienced by real, working people in the European Union. Further, it serves as a guide to the true cost of hiring employees in each state.
jesus, guys, chill. now i feel bad for this…. :(
i’m thinking there’s a bit of sexual tension here with you two… but that might just be the weed talking.
It’s the weed talking.
i would just like to say that the minimum wage 8.65 is too low .its not an incentive to work