France and Germany: a dead heat with a strange crossover

OECD tax wedge tables place both countries near the European ceiling for the cost of employing someone. Those tables include employer contributions, though, and no employee has ever laid eyes on that money. What counts on payday is the route from gross to net, and there the two systems behave like mirror images arriving at nearly the same answer by opposite paths.

Boiled down to one line: France edges it below roughly €70,000 gross, Germany takes over above that, and keeps stretching its lead. Below six figures neither gap amounts to much, but the direction of travel surprises almost everyone, including people with payslips from both countries sitting in a drawer.

Two shelters, one outcome

Germany never applies its brackets to gross pay. Social insurance, around 21% of gross covering pension, health, unemployment and long-term care, is removed from the tax base first, along with the €1,230 Werbungskostenpauschale and the €12,096 Grundfreibetrag. So an €80,000 salary is assessed as though it were roughly €63,400. The infamous 42% band opens at about €68,430 of taxable income, which means it scarcely reaches someone at that level.

France shelters at the other end. A flat 10% professional expense deduction comes off before income tax, leaving €72,000 assessable on that same €80,000, a broader base than Germany's, but the barème is gentler: 30% carries the long middle stretch and 41% waits until roughly €84,000 of taxable income. The generosity ends at the social layer, where employee contributions of nearly 22% apply to every euro earned, with no ceiling that anyone in this bracket will ever reach.

Run the numbers and the two income tax bills nearly converge: on €80,000, Lohnsteuer comes to around €16,100 and impôt sur le revenu to around €14,800. Everything then turns on what happens to contributions once the German ceilings are cleared, which is exactly where the crossover sits.

Side by side at three salary levels

Every figure here assumes a single worker with nothing unusual attached: célibataire, one fiscal part, no special credits on the French side, Steuerklasse I with no church tax on the German. That keeps the comparison honest. Marriage and children move both systems substantially, France through the quotient familial and Germany through the Steuerklassen and Kinderfreibetrag.

Notice how slender the middle-range gaps are. The French lead at €45,000 buys a decent dinner; the German lead at €80,000 buys the same dinner in the other direction. Choosing between Lyon and Frankfurt on net pay at those levels means choosing on statistical noise. Push up to €120,000 and it stops being noise, because €514 a month is more than €6,000 a year.

The €66,150 line that settles it

German contributions have ceilings. Health and long-term care halt at the Beitragsbemessungsgrenze of €66,150, while pension and unemployment run on to €90,600. Beyond those points only income tax applies, so the effective marginal rate actually falls once €66,150 is behind you. France gives employees nothing equivalent: that 22% social layer keeps pace with every euro all the way up, with the 41% and 45% income tax bands stacking on afterwards.

A single structural quirk accounts for the whole gap at the top, and it flips the familiar expat line about France paying better net completely on its head for senior engineers, doctors and managers. The saying only ever held in the salary range where newcomers tend to run the comparison, which is the beginning of a career.

Where France genuinely comes out ahead

• Below €70,000: modestly but consistently, thanks to the 10% deduction and the gentler barème through the middle bands.
• Families: the quotient familial divides taxable income across household "parts" - a married couple with two children on one €80,000 salary pays dramatically less income tax in France than the single-earner figures above suggest. Germany's Steuerklasse III splitting helps single-earner couples too, but the French child effect is stronger.
• Freelancers under the microentreprise regime (up to €77,700 for services): simplified contributions of roughly 22-23% of revenue, all-in. Germany has no equivalent, and German freelance administration is famously heavier.
• Time, not money: France's 35-hour framework means many cadres accumulate 36-40 days of annual leave including RTT days, against a German standard of 30. That gap has real monetary value that never shows up in a payslip comparison.

Where Germany does

• Above €70,000: increasingly with income, as the contribution ceilings do their work - €500+ a month by €120,000.
• Investment income: Germany's flat 25% Abgeltungssteuer is simpler and usually lighter than France's 17.2% prélèvements sociaux plus income tax treatment, which can push past 45% for high earners.
• Predictability: German payroll deducts everything at source with no year-end surprises for standard employees; France's prélèvement à la source still reconciles against the household declaration each spring.