Top 5 Countries With The Highest Income Tax For Single People
If you could live anywhere in the world, wouldn’t you want to know the potential income taxes before moving and how that compared to the U.S. tax rates? Perhaps, but that’s not the only question to ask.
Your filing status of single or married is also a factor in determining which locations might have the highest income taxes. What's more, the countries with the highest taxes on high incomes Slovenia, Belgium, Sweden, Finland, and Portugal are mostly different from the countries with the highest taxes on average income earners.
Being married with children also can make a difference. Denmark has some of the highest taxes in the world on both single and married taxpayers, but the other top four countries in each of the two categories are completely different, though they’re all in Europe.
This article focuses on the taxes you could expect, depending on whether you are single or married. This data (the most recent available from 2019) comes from the Organisation for Economic Co-operation and Development (OECD), a forum that allows governments from 37 advanced and developing countries around the world—25 of which are in Europe—to work together toward people’s economic and social well-being.
Let’s look at the countries with the highest all-in average personal income tax rates at the average wage for a single person with no children. The top five are Germany (38.9%), Belgium (38.4%), Lithuania (35.8%), Denmark (35.3%), and Slovenia (33.7%).
Top 5 Countries With the Highest Income Tax for Single People
- Germany
- Belgium
- Lithuania
- Denmark
- Slovenia
1. Germany
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Germany has a progressive tax, which means that higher-income individuals pay more taxes than lower-income individuals. The country levies a progressive income and capital tax that caps out at 45%.
Sources of taxable income include agriculture, forestry, business ownership, self-employment, employment, savings and investments, rental property, capital gains, and other income. The first €801 in savings and investment income is not taxed, thanks to the saver’s allowance. There is a 25% withholding tax on interest and dividends and a 15% withholding tax on royalties.
Church tax in Germany is fully deductible, and the government allows for charitable contributions to be deducted as long as they are under 20% of the individual's adjusted gross income (AGI).
Income of up to €9,744 is considered a personal allowance and is not taxed.
Other deductions include a percentage of contributions to a statutory pension insurance plan; health insurance premiums; private accident, life, unemployment, and disability insurance premiums; donations to registered charities; and up to €6,000 per year in training for a future profession.
2. Belgium
Belgium's top progressive tax rate is 50%. Income from property, work, investments, and miscellaneous sources is all taxable. Capital gains tax rates depend on the type of capital.
Employees pay a social security tax of 13.07% of their income. The government allows deductions for business expenses, social contributions, and 80% of alimony payments, and there is a personal allowance based on filing status.
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For 2023, the allowance is €9,270.
Expats in Belgium were given new rules in January of 2022. They must have a minimum AGI of €75,000. The government allows for a maximum of 30% of the AGI as a tax-free allowance. It is a five-year program with the option to be extended.
3. Lithuania
Lithuania's taxes its income earners at rates that top out at 32% for earnings over €90,246. Personal income tax until that AGI is 20%. Taxable income includes employment, commercial activities, royalties, leasing assets, and other.
Income unrelated to employment—including royalties, interest, and gains from the sale of property—is taxed at a rate of 15% or 20%, as are capital gains. Dividends are subject to a tax rate of 15%. There is no withholding tax charged on interest unless the individual in question isn't a citizen of Lithuania, in which case the rate is 15%.
Lithuania seems to have given a huge break for certain earners, as the top income tax bracket was raised quite a bit. From 2022, that threshold is €90,246. In 2021, it was €81,162. All earnings over this amount are also subject to a lower social security tax of 6.98% and that’s why you should read on famous people that evade taxes how they evade it.
4. Denmark
Denmark’s progressive income tax tops out at 55.9%. The Danes pay an 8% Danish labor market contribution tax, an 8% healthcare tax, an average of 24.98% in municipal taxes, social security taxes of 1,135.8 kr. ($167.06) per year and capital gains taxes pegged to the normal personal income tax rate.
There is an inheritance and gift tax rate, both of 15%.
Employment income, bonuses, fringe benefits, business income, fees, pensions, annuities, social security benefits, dividends, interest, capital gains, and real estate rental income are all taxable. There is also a voluntary church tax of 0.70%.
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Tax deductions are available for limited contributions to approved Danish pensions, unemployment insurance, interest on the debt, charitable contributions, unreimbursed work travel, and double households.
There is an expat scheme in Denmark, but considering it still requires payment of the labor tax, the rate for those who meet the special expat requirements is 32.84%.
5. Slovenia
Slovenia levies an individual income tax that ranges from 16% to 45%. Residents are taxed on their worldwide income, while non-residents will only have their Slovenia-sourced income taxed. Six types of income are subject to taxation: employment; business; agriculture and forestry; rent and royalties; dividends, interest, and capital gains; and other.
A withholding tax of 15% is levied against rental income for 2022. In 2021, that rate was nearly double, at 27.5%.
The employee pays the lion's share of pension and disability insurance at 15.50%. Health insurance is roughly equal between employer and employee, at 6.36%. Social security as a whole in Slovenia totals 22.10%.
Capital gains, interest, and dividends are taxed at a flat rate of 25%. However, tax residents are allowed to choose between this flat rate or the progressive tax rates.
