Which European countries have the lowest taxes on wages?

Which European countries have the lowest taxes on wages in 2026? - Portugal Business News

Financial News Europe - Here are the European countries with the lowest taxes on wages, including Income Tax plus employee Social Security contributions as a percentage of gross wage earnings, according to the OECD report Taxing Wages 2026. The data is for the total tax wedge for a single individual without children earning the average wage in US dollars with equal purchasing power.

What is the OECD average tax wedge including Income Tax & Social Security contributions as a percentage of gross wage earnings?

The OECD average tax wedge including Income Tax and Social Security contributions as a percentage of gross wage earnings is 35.1% of average wage earnings that amount to USD 74,072 for a single person.

Top 10 European countries with the lowest taxes on wages including Income Tax & Social Security contributions as a percentage of gross wage earnings:

1 - Switzerland

Switzerland ranks No. 1 European country with the lowest taxes on wages including Income Tax & Social Security contributions as a percentage of gross wage earnings.

Switzerland has a total tax wedge of 23% of average wage earnings that amount to USD 113,350 for a single person.

2 - Iceland

Iceland ranks 2nd European country with the lowest taxes on wages including Income Tax & Social Security contributions as a percentage of gross wage earnings.

Iceland has a total tax wedge of 31.5% of average wage earnings that amount to USD 88,869 for a single person.

3 - United Kingdom

The United Kingdom ranks 3rd European country with the lowest taxes on wages including Income Tax & Social Security contributions as a percentage of gross wage earnings.

The United Kingdom has a total tax wedge of 32.4% of average wage earnings that amount to USD 93,576 for a single person.

4 - Ireland

Ireland ranks 4th European country with the lowest taxes on wages including Income Tax & Social Security contributions as a percentage of gross wage earnings.

Ireland has a total tax wedge of 32.6% of average wage earnings that amount to USD 90,018 for a single person.

5 - Poland

Poland ranks 5th European country with the lowest taxes on wages including Income Tax & Social Security contributions as a percentage of gross wage earnings.

Poland has a total tax wedge of 35.0% of average wage earnings that amount to USD 62,288 for a single person.

6 - Denmark

Denmark ranks 6th European country with the lowest taxes on wages including Income Tax & Social Security contributions as a percentage of gross wage earnings.

Denmark has a total tax wedge of 35.8% of average wage earnings that amount to USD 89,045 for a single person.

7 - Netherlands

The Netherlands ranks 7th European country with the lowest taxes on wages including Income Tax & Social Security contributions as a percentage of gross wage earnings.

The Netherlands has a total tax wedge of 35.9% of average wage earnings that amount to USD 104,614 for a single person.

8 - Norway

Norway ranks 8th European country with the lowest taxes on wages including Income Tax & Social Security contributions as a percentage of gross wage earnings.

However, Norway´s total tax wedge is above the OECD average that is 35.1%.

Norway has a total tax wedge of 36.4% of average wage earnings that amount to USD 99,126 for a single person.

9 - Greece

Greece ranks 9th European country with the lowest taxes on wages including Income Tax & Social Security contributions as a percentage of gross wage earnings.

Greece has a total tax wedge of 39.3% of average wage earnings that amount to USD 62,082 for a single person.

10 - Portugal

Portugal ranks 10th European country with the lowest taxes on wages including Income Tax & Social Security contributions as a percentage of gross wage earnings.

Portugal has a total tax wedge of 39.3% of average wage earnings that amount to USD 56,779 for a single person.