Family Incomes in Europe: Where Salaries Are Highest—and How Much Taxes Take Away

Photo: Visual Capitalist

The Visual Capitalist platform has published a comparison of family incomes across European countries, factoring in taxes and social contributions. The ranking is based on Eurostat data and shows how much money remains after mandatory payments. Analysts examined 2024 figures for four-person households to highlight the gap between gross and net earnings.

Across the European Union, the average gross income for a family with two children is €86.3k per year, of which €63.5k remains after taxes and social charges. In other words, European families keep about 74% of what they earn. This share reflects the balance between higher taxes in Northern and Western Europe and lighter fiscal policies in the south. The average combined tax and social-contribution burden in the EU is about €22.8k per year, illustrating the typical pressure on working households.



Switzerland tops the list, with an average gross family income of €208.8k. After taxes and social charges, €178.6k remains—86% of earnings, one of the highest retention rates in Europe and globally. High salaries combined with robust tax deductions, family benefits, and childcare subsidies make Swiss families the most financially secure on the continent.

Iceland ranks second: families earn €158.2k gross and keep €116.4k net (74%). Strong wages plus comprehensive public benefits maintain a high standard of living. Housing allowances and generous parental-support programs further bolster real household incomes.

Luxembourg is third with €148.6k gross and €110.4k net (74%). The country offers extensive social benefits, including monthly child allowances and partial reimbursement of education costs. Taxes are among the highest in Europe, yet generous credits and transfers lift net incomes to levels comparable with Iceland and the Netherlands.

In fourth place is Denmark—average family income €136.5k, with €91.7k net (67%). Free education, accessible healthcare, and strong parental support offset the heavy tax burden, sustaining high real living standards.

Rounding out the top five are the Netherlands—€131.6k gross and €101.5k net (77%). Dutch taxation combines moderate rates with effective redistribution: tax credits, family benefits, and support for working parents return a meaningful share of income. As a result, Dutch families outperform larger economies like Germany, France, and Italy on a net basis.

Norway ranks sixth: €131.4k gross, €97.6k net (74%). Ireland is close behind at €128.3k and €95.8k (75%). Germany sits eighth with €126.6k gross and €86.4k net (68%). In Austria, families keep €93.7k of €123.4k (76%), while in Belgium they retain €80.1k of €121.7k (66%), reflecting a heavy tax load alongside stable social guarantees.



Next come countries with still-solid results. Finland ranks 11th: €105.8k gross, €76.1k net (72%). Sweden is 12th: €94k and €75.1k (80%). France posts €89.9k and €68.2k; Italy €71.2k and €54.5k (76%). In Spain, taxes and contributions total €13.3k; from €63.4k gross, families keep €50k net (79%).



Among other states, Slovakia stands out with a 89% retention rate, though at much lower levels: €32.9k net from €37.1k gross. Poland ranks second by retention at 87% (€39.1k of €44.8k). Cyprus matches Switzerland’s 86% retention but at far lower amounts—€49.3k from €57.4k. Despite lower wages, these countries deliver standout tax efficiency, allowing families to keep most of their income.



A substantial share also remains in Estonia (84%) and the Czech Republic (82%). Bulgaria retains 82% as well, yet sits among the lowest-income countries: €28.5k gross per family, €23.4k net. In the same low-income bracket is Türkiye—€31.9k and €22.9k (72%).

Romania shows relatively modest pay (€40.1k) and a lower retention rate of 67% (€26.8k). Lithuania is lower still at 66%: average family income €51.5k, with €34.1k left after taxes and social charges.



The study suggests that in some countries, tax-and-transfer systems fail to redistribute effectively—and can even worsen outcomes for the poor. Low-income households pay taxes (especially flat or indirect ones) that can outweigh the benefits they receive. Less progressive tax regimes and weaker social safety nets intensify pressure on low-income families—a pattern seen mainly in parts of Eastern Europe.

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