Amounts of income tax and social security contributions

The amount that has to be paid annually in income tax and social security contributions is based on the household’s taxable income. The taxable income  takes into account the  income dependent tax rates, the compensation of specific costs, exemptions, tax deductible items and tax credits. The burden is determined by relating the amount paid to the household’s gross income. The gross income consists of the primary income (income from labour, enterprise and wealth) plus all transfers received including benefits, pensions, rent allowance and income related child benefits.

Besides income tax and social security contributions the household income is also burdened by the indirect taxes such as  excise duties, VAT, motor vehicle tax, insurance tax and local tax (municipal and water board). These indirect and local taxes are not taken into account in these calculations of the tax burden.