# How does Italy compare to France in terms of Taxes and social security



## EUROASH (Jan 27, 2014)

Hello

I was hoping that someone could tell me how Italy compares to France as far as Taxes and social security is concerned.

I'm doing some research and everyone says that it is the social security payments that make it hard to make money in France.

Can someone tell me how Italy compares.

thanks


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## NickZ (Jun 26, 2009)

No better. Maybe worse.

I think the payments now reach 33%. On top of that whatever taxes you need to pay


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## BBCWatcher (Dec 28, 2012)

According to PWC, and assuming a non-executive staff employee, the total social insurance tax rate is about 40% of gross salary. (It varies slightly depending on the size of company and other factors.) The employer pays about 30 percentage points, and the employee pays about 10. About 33 percentage points go into the National Pension Fund, the rest into other funds (unemployment, sickness, maternity, etc.) Social insurance tax applies only to the first 100,123 euro of salary (2014 figure).

Executives (_dirigenti_) and self-employed individuals are treated differently.

According to PWC, France's social insurance tax rate is substantially higher.


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## NickZ (Jun 26, 2009)

IIRC France funds health care with a separate tax.

He needs to compare the total hit.


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## Bevdeforges (Nov 16, 2007)

NickZ said:


> IIRC France funds health care with a separate tax.
> 
> He needs to compare the total hit.


Total hit in France for an employed person runs about 23 to 28% depending on the specifics of what the employer offers. (The employer pays considerably more than that.) 

If you are considered an "independent" things work differently. For a simple AE (auto-entrepreneur), social charges run 23% of turnover (i.e. not net income - gross revenue), while for other forms of "independence" count on about 35 to 40% of income going to the owner's social charges.

Income tax is on top of that - but most social insurance charges are deducted in arriving at "taxable income." (Which is probably also the case in Italy.)
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

EUROASH said:


> I'm doing some research and everyone says that it is the social security payments that make it hard to make money in France.


In France's favor, its labor market is currently a bit tighter than Italy's -- and likely to improve somewhat as France overreacts to the attacks in Paris. The social insurance taxes owed on zero salary are zero. It's at least harder to make money without a job.

Germany currently has Western Europe's lowest official unemployment rate.


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## Bevdeforges (Nov 16, 2007)

BBCWatcher said:


> In France's favor, its labor market is currently a bit tighter than Italy's -- and likely to improve somewhat as France overreacts to the attacks in Paris. The social insurance taxes owed on zero salary are zero. It's at least harder to make money without a job.
> 
> Germany currently has Western Europe's lowest official unemployment rate.


In France, however, your entitlement to social insurance benefits is usually tied to your recent contributions, too. Sure, you don't contribute if you aren't working, but you also don't get health coverage or the other benefits (unless those contributions are being covered by unemployment benefits). 

The other thing is to consider Italy's benefits with relation to what you pay for those benefits: health, retirement, unemployment, etc.
Cheers,
Bev


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## NickZ (Jun 26, 2009)

Bevdeforges said:


> The other thing is to consider Italy's benefits with relation to what you pay for those benefits: health, retirement, unemployment, etc.
> Cheers,
> Bev


Basically no unemployment insurance. Very little chance of a pension. Health is paid from your income taxes in theory.

No point talking about national averages in unemployment. It depends on your skills . Then you have the fact Germany is full of mini jobs. I doubt anybody here would be moving to work for €1-2 a hour


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## BBCWatcher (Dec 28, 2012)

NickZ said:


> No point talking about national averages in unemployment.


Oh, I think there's very much a point. (Do you want to ignore Greece's national unemployment rate in your consideration? ) The national averages set the overall economic stage, and the overall stage clearly matters. There are extremely highly qualified individuals, with doctorate degrees and years of experience, who cannot find jobs in both countries, but (percentage wise) the problem is currently a bit worse in Italy.

Moreover, there is more limited labor mobility between countries in Europe compared to, for example, between U.S. states. If you're moving from France to Italy, and (as typical) your professional experience is French (and "French"), you have to be _that much better_ than already resident job seekers in Italy who have ample Italian professional experience and language proficiency (or settle for below market compensation, or some combination).

Compensation levels will reflect local labor market conditions, tax rates, etc. Average wages are higher in France than they are in Italy. If I'm reading the tables correctly (I think so), net take home pay averages about 150 euro per month more in France than in Italy at present. What too many people forget is that the tax rate itself doesn't matter. What matters is the after tax take home pay, its purchasing power, and the environment and amenities you enjoy, including government-provided goods and services.


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## Bevdeforges (Nov 16, 2007)

It's still a tricky business to compare salaries and "take home pay" between countries. Cost of living between the various countries varies enough so that a "150€ a month more" in France may or may not mean anything substantive in actual spending power. (In France there are no income taxes withheld - you settle up a year in arrears - plus all the "other" taxes you wind up having to pay throughout the year.)

Unemployment averages give you an overall idea - but what's important is if you can find a job in a specific area that will hire YOU at a salary you can live on (and if the employer can get you the necessary visa, should you need one). 

Some problems don't boil down to simply running the numbers.
Cheers,
Bev


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## NickZ (Jun 26, 2009)

BBCWatcher said:


> (Do you want to ignore Greece's national unemployment rate in your consideration? )
> 
> 
> Compensation levels will reflect local labor market conditions, tax rates, etc. Average wages are higher in France than they are in Italy. If I'm reading the tables correctly (I think so), net take home pay averages about 150 euro per month more in France than in Italy at present. What too many people forget is that the tax rate itself doesn't matter. What matters is the after tax take home pay, its purchasing power, and the environment and amenities you enjoy, including government-provided goods and services.


Yes I'd ignore Greece national rate unless I had a need to find jobs for ten million Greeks. 

There are people with no problem finding a job. Others with no chance at all. There is a reason you've got Germans working on the Greek islands or the south of Spain. Areas with unemployment rates far worse then the German national average.

But even with in Germany the rates vary quite a bit.

On the average take home pay you've got the same issue. Those pay rates are inflated by the older people working under previous systems. It doesn't mean you could expect the same treatment.


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## NickZ (Jun 26, 2009)

Bevdeforges said:


> you can live on


Which ends up being the only test. There are things in France that sell for a fraction of the Italian price and there are items that sell for multiples of the Italian price. There is a reason when I take a road trip to France I return with the car packed to the roof


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## BBCWatcher (Dec 28, 2012)

NickZ said:


> Yes I'd ignore Greece national rate unless I had a need to find jobs for ten million Greeks.


Ah, but you're also Greek if you want to find and keep a job in Greece, and finding jobs for ten million Greeks starts with finding one more job: yours.

Yes, it is _possible_ for an individual currently living in France (for example) to relocate and to find employment in Greece. It is also possible to find a palm tree north of the Arctic Circle, to win Spain's El Gordo lottery, to have a long career as a well paid professional soccer player, and, for a few lucky salmon, to swim upstream and survive long enough to spawn.

The overall employment statistics summarize and aggregate the individual probabilities of finding employment, holding employment, and enjoying particular levels of employment compensation. Every prospective and current employee operates within aggregate labor market conditions.


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