It’s a common confusion: someone sees that Germany has a 47.9% tax wedge and assumes a German worker keeps barely half their salary. That’s not what the numbers say. Take-home pay and the tax wedge measure different things, against different baselines.
Two different fractions
- Take-home pay is built on your gross wage. The OECD’s net personal average tax rate is income tax plus your own social-security contributions, as a share of gross. Keep-rate = 100% − that.
- The tax wedge is built on total labour cost — gross plus the employer’s social-security contributions. It includes money you never see.
Because the denominators differ (gross vs labour cost), the two percentages don’t add up to 100%.
See it in the data
For a single average worker (2023):
| Country | Net avg tax rate (of gross) | You keep (of gross) | Total tax wedge |
|---|---|---|---|
| Germany | 37.4% | 62.6% | 47.9% |
| France | 27.5% | 72.5% | 46.8% |
| Spain | 22.1% | 77.9% | 40.2% |
| United States | 24.3% | 75.7% | 29.9% |
| Denmark | 36.0% | 64.0% | 36.4% |
Look at France: a worker keeps 72.5% of their gross wage — more than a German worker — yet France’s tax wedge (46.8%) is almost as high as Germany’s. The reason is the enormous French employer contribution (36.3% of labour cost), which inflates the wedge without touching the worker’s take-home share.
Spain is even starker: workers keep 77.9% of gross, close to the US, but the wedge is 40.2% versus the US’s 29.9% — again, employer contributions.
Which number matters?
- If you’re negotiating a salary or budgeting, the take-home share of gross is closest to your lived experience.
- If you’re comparing how heavily countries tax labour, or thinking about hiring costs, the tax wedge is the honest measure, because employer contributions are real money spent on your job.
Our country pages and the estimator show both, so you can see the gap for yourself.
Related reading
Figures from OECD Taxing Wages (2023 data year), CC BY 4.0. Modelled averages — not personal tax advice.