Complete side-by-side comparison of United Kingdom and German tax systems including PAYE vs German income tax, National Insurance vs social contributions, and total tax burden analysis for Brits considering a move to Germany.
Key differences between UK and Germany tax systems at a glance
| Category | <ì<ç United Kingdom | <é<ê Germany |
|---|---|---|
| Income Tax Range | 20% - 45% | 14% - 45% (+ 5.5% solidarity surcharge) |
| Tax-Free Allowance | £12,570 (Personal Allowance) | ¬11,604 (Grundfreibetrag) |
| Social Security Contributions | 12% National Insurance | ~20% (Pension + Health + Unemployment + Care) |
| Top Tax Rate Threshold | £125,140 (45%) | ¬277,826 (45% + 5.5% soli = 47.5%) |
| Healthcare | NHS (free at point of use) | Universal (mandatory insurance, 7.3% contribution) |
| VAT Rate | 20% standard | 19% standard (7% reduced) |
| Capital Gains Tax | 10% - 20% (depending on income) | 25% flat (Abgeltungsteuer) |
| Tax Year | April 6 - April 5 | January 1 - December 31 |
| Tax Filing Deadline | January 31 (online) | July 31 |
Bottom line: Germans pay 8-15% MORE in total taxes than Brits
" Lower incomes (£20k-30k): UK ~28-32% total, Germany ~35-40% total
" Middle incomes (£40k-60k): UK ~32-38% total, Germany ~42-48% total
" Higher incomes (£80k+): UK ~40-47% total, Germany ~48-55% total
" BUT: Germany offers lower cost of living in many cities, free university, better worker protections, and more generous parental leave
" Social contributions: Germany's 20% social insurance is nearly double UK's 12% National Insurance
| <ì<ç UK Income Tax Bands 2025/26 | ||
|---|---|---|
| Income Range | Tax Rate | Notes |
| £0 - £12,570 | 0% | Personal Allowance (tax-free) |
| £12,571 - £50,270 | 20% | Basic rate |
| £50,271 - £125,140 | 40% | Higher rate |
| £125,141+ | 45% | Additional rate |
| Note: Personal Allowance reduces by £1 for every £2 earned over £100,000 | ||
| <é<ê Germany Tax Brackets 2025 | ||
|---|---|---|
| Income Range | Tax Rate | Notes |
| ¬0 - ¬11,604 | 0% | Basic tax-free allowance (Grundfreibetrag) |
| ¬11,605 - ¬17,005 | 14% - 24% | Progressive rate zone |
| ¬17,006 - ¬66,760 | 24% - 42% | Progressive rate zone |
| ¬66,761 - ¬277,825 | 42% | + 5.5% Solidarity Surcharge = ~44.3% total |
| ¬277,826+ | 45% | "Rich tax" + 5.5% Soli = ~47.5% total |
UK (£50,000):
" Income tax: £7,486 (15%)
" National Insurance: £5,164 (10.3%)
" Total: £12,650 (25.3%)
" Take-home: £37,350 (74.7%)
Germany (¬58,000):
" Income tax + Soli: ¬15,950 (27.5%)
" Social insurance: ¬11,600 (20%)
" Total: ¬27,550 (47.5%)
" Take-home: ¬30,450 (~£26,293, 52.5%)
At £50k equivalent, UK taxpayers take home 42% MORE than Germans (£37k vs £26k)
| Country | Program | Employee Rate | What It Covers |
|---|---|---|---|
| <ì<ç UK | National Insurance | 12% (8% over £50,270) | State Pension, NHS, unemployment benefits |
| <é<ê Germany | Pension Insurance | 9.3% | State pension |
| Health Insurance | 7.3% | Universal healthcare | |
| Unemployment Insurance | 1.3% | Unemployment benefits (60-67% of salary) | |
| Care Insurance | 1.7% | Long-term care |
UK: NHS funded through National Insurance (included in 12% contribution). Free at point of use, but longer wait times for non-urgent care. Private insurance optional (~£50-200/month).
Germany: Mandatory health insurance (7.3% contribution). Choice of 100+ insurance providers. Very short wait times, excellent care quality. Covers dental, prescriptions (max ¬10 per script).
Both systems provide excellent universal healthcare, but you pay 7.3% explicitly in Germany vs 12% combined in UK
How much you actually keep at different income levels
| Scenario | <ì<ç UK Take-Home | <é<ê Germany Take-Home | Difference |
|---|---|---|---|
| £25,000 / ¬29,000 | £21,123 (84.5%) | ¬19,430 (~£16,774, 67%) | <ì<ç UK +26% more |
| £40,000 / ¬46,500 | £31,109 (77.8%) | ¬28,115 (~£24,277, 60.5%) | <ì<ç UK +28% more |
| £60,000 / ¬69,700 | £43,109 (71.9%) | ¬35,250 (~£30,432, 50.6%) | <ì<ç UK +42% more |
| £80,000 / ¬93,000 | £54,589 (68.2%) | ¬44,350 (~£38,292, 47.7%) | <ì<ç UK +43% more |
| £100,000 / ¬116,000 | £66,125 (66.1%) | ¬53,680 (~£46,339, 46.3%) | <ì<ç UK +43% more |
| £150,000+ (High earners) | ~60-65% take-home | ~45-50% take-home | <ì<ç UK +15-20% more |
Exchange rate: £1 = ¬1.16. Both countries include healthcare in calculations.
Germany's social insurance contributions are DOUBLE the UK's:
" UK: 12% National Insurance covers pension, NHS, unemployment
" Germany: ~20% social insurance (9.3% pension + 7.3% health + 1.3% unemployment + 1.7% care)
Plus Germany's tax rates kick in earlier:
" UK: 40% rate starts at £50,270
" Germany: 42% rate starts at just ¬66,760 (~£57,586)
Result: 10-20% lower take-home pay in Germany, but includes excellent healthcare and stronger social safety net
Compare UK and Germany taxes with your specific income and personal situation
=° Try Free Tax Calculator| Expense | <ì<ç London | <é<ê Berlin | <é<ê Munich |
|---|---|---|---|
| 1-Bed Apartment (City Centre) | £2,000-2,800/month | ¬1,200-1,600 (~£1,035-1,380) | ¬1,500-2,000 (~£1,295-1,725) |
| Public Transport (Monthly) | £164 | ¬49 (~£42) | ¬79 (~£68) |
| Restaurant Meal | £15-25 | ¬12-18 (~£10-15) | ¬15-22 (~£13-19) |
| Groceries (Monthly, 1 person) | £250-350 | ¬200-300 (~£172-259) | ¬220-320 (~£190-276) |
| Utilities (Monthly) | £150-200 | ¬150-220 (~£129-190) | ¬160-240 (~£138-207) |
| University Tuition (per year) | £9,250 (UK students) | ¬0 (Free!) | ¬0 (Free!) |
Scenario: £60,000 salary in London vs equivalent in Berlin
London:
" Take-home: £43,109
" Rent (1-bed): -£28,800/year
" Transport: -£1,968/year
" Remaining: £12,341
Berlin (¬69,700 equivalent):
" Take-home: ¬35,250 (~£30,432)
" Rent (1-bed): -¬16,800/year (~£14,504)
" Transport: -¬588/year (~£508)
" Remaining: ¬17,862 (~£15,420)
Despite 30% higher taxes, you end up with MORE disposable income in Berlin due to significantly lower living costs!
| Factor | <ì<ç United Kingdom | <é<ê Germany |
|---|---|---|
| Minimum Vacation Days | 28 days (5.6 weeks) | 20 days (4 weeks) + 9-13 public holidays |
| Sick Leave | SSP (£116/week after 3 days) | Full salary for 6 weeks, then 70% for 78 weeks |
| Parental Leave | 52 weeks (39 weeks paid) | 14 months paid at 67% of salary (both parents combined) |
| University Tuition | £9,250/year for UK students | Free (¬0) |
| Average Salary | ~£35,000 | ~¬50,000 (~£43,103) |
| Worker Protections | Good (Employment Rights Act) | Excellent (very strong dismissal protections) |
| Public Transport | Expensive, varies by quality | Excellent and affordable (¬49/month ticket) |
" Want to maximize take-home pay (20-40% more than Germany)
" Earn £80k+ (the gap widens at higher incomes)
" Prefer NHS and UK healthcare system
" Have family/social ties that are important
" Don't want to learn German (though many Germans speak English)
" Work in finance/consulting where London dominates
" Value lower cost of living (especially rent, which can be 40-60% cheaper)
" Want free university for your children (saving £27,750+ per child)
" Prefer excellent public transport (¬49/month for all Germany)
" Want better work-life balance and stronger worker protections
" Value job security (much harder to be fired in Germany)
" Are willing to accept 20-30% less take-home pay for better quality of life
" Work in tech/engineering (Berlin, Munich have booming job markets)
UK has significantly lower taxes. At £50k, you take home £37k in UK vs £26k equivalent in Germany (42% more). However, Germany has lower living costs (especially housing), free university, and better public transport that can offset the higher taxes.
UK: £12,650 total (25.3%) = £37,350 take-home
Germany (¬58,000 equivalent): ¬27,550 total (47.5%) = ¬30,450 (~£26,293) take-home
UK taxpayers keep £11,057 MORE per year (42% higher take-home pay).
Yes! While taxes are 10-20% higher, your total living costs may be LOWER due to: cheaper rent (40-60% less in Berlin vs London), ¬49 monthly transport pass, free university, cheaper healthcare. Many Brits find they have more disposable income in Germany despite higher taxes.
UK: 12% National Insurance covers state pension, NHS, unemployment
Germany: ~20% social insurance (9.3% pension + 7.3% health + 1.3% unemployment + 1.7% care)
German contributions are nearly double, but include excellent healthcare with short wait times.
For tech/multinational companies in Berlin/Munich, English is often sufficient. However, learning German significantly improves your quality of life, social integration, and job opportunities. Most Germans under 40 speak good English, but government services require German.
Explore other tax comparisons to make informed decisions