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#138421 - 09/07/03 08:01 AM Taxes / Insurance / Health
pauluk Offline
Member

Registered: 08/11/01
Posts: 7693
Loc: Norfolk, England
Prompted by the health insurance thread in the General Discussion area.

We've touched upon some of the costs involved with regard to the sales tax (VAT) systems that operate in Europe, so I thought it might be an idea to compare some of the other costs in different places.

Here in the U.K., there are private health schemes available for anyone who wants to join them, but we've had a National Health Service since the late 1940s, along with an accompanying (and ever-expanding) welfare system.

Here's a brief outline of what somebody working self-employed here has to pay into the system in the way of direct taxes. Rates are for the current fiscal year, and I've converted amounts into U.S. dollars as I think they'll be more widely understood than pounds Sterling. Those of you in Euro-land can deduct about 10% to get the Euro equivalents.

INCOME TAX

Personal tax-free allowance $7300.
First $3100 of taxable income, 10%.
Next $45,000 taxed at 22%.
Anything above that, 40%.

Those rates aren't too bad on a world scale, although obviously there are many complications on those basic rates. The big drawback is that despite successive governments advocating their "Support of the family," the married allowance has been effectively wiped out.

NATIONAL INSURANCE CONTRIBUTIONS
A misnomer if ever there was one, for the last word implies a voluntary payment. The "contributions" are mandatory, so it's really just another tax. In theory, it is the National Insurance payments which provide for health care and welfare, although in practice it all just goes into one big bucket for allocation to evrything the givernment spends our money on.

Self-employed pay a "Class 2 contribution" which is a flat-rate of $3.20 per week.

Income in excess of $7300 then attracts an additional "Class 4" payment of 8%. (Up to a maximum of $48,900 income, over which the additional tax is just 1%, not that I'd know about that! ).

There are many other factors to consider, of course, but this is a starting point. For employees, the income tax rates are the same, but national insurance works in a different way.


Some links:
http://www.inlandrevenue.gov.uk/pdfs/irinsert.htm
http://www.inlandrevenue.gov.uk/pdfs/cwl2.pdf


[This message has been edited by pauluk (edited 09-07-2003).]

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#138422 - 09/07/03 09:05 AM Re: Taxes / Insurance / Health
C-H Offline

Member

Registered: 09/17/02
Posts: 1508
Loc: Stockholm, Sweden
In Sweden, the exact tax varies with municipality and changes (read: increases) each year, but here are the are approximate levels:

Annual income
Up to $25 000: 30% tax
$25 000 - 40 000 : 50% tax
above $40 000 : 55% tax

In addition, your employer pays the following (calculated on the income):

1. Health insurance 11.08%
2. Occupational injury insurance 0.68%
3. Pension plan 10.21%
4. Survivor's pension plan 1.70%
5. Parental benefit 2.20%
6. Jobmarket fee 3.70% (More tax)
7. General wage fee 3.25% (Even more tax)

{Edited to correct the figures. Too many zeros on the income first time.}

[This message has been edited by C-H (edited 09-07-2003).]

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#138423 - 09/09/03 03:56 PM Re: Taxes / Insurance / Health
pauluk Offline
Member

Registered: 08/11/01
Posts: 7693
Loc: Norfolk, England
 Quote:
Annual income
Up to $25 000: 30% tax

Don't you get an allowance, i.e. no tax on the first few thousand?

Those health & welfare taxes!

In round figures, it looks like if I wanted to employ someone in Sweden and pay him $300 per week I'd have to actually shell out $400 per week total.

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#138424 - 09/09/03 04:09 PM Re: Taxes / Insurance / Health
pauluk Offline
Member

Registered: 08/11/01
Posts: 7693
Loc: Norfolk, England
For our friends coming in here from the general thread on U.S. health insurance, I should point out that the U.K. govt. raises much higher indirect taxes on many items compared to the States, so the direct taxes don't tell the whole story.

VAT (sales tax equivalent) runs 17.5% on most items here, duty on alcohol, tobacco, and gasoline is very much higher, and so on. The health system takes quite a big chunk of those taxes, or so I'm led to believe.

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#138425 - 09/10/03 06:01 AM Re: Taxes / Insurance / Health
C-H Offline

Member

Registered: 09/17/02
Posts: 1508
Loc: Stockholm, Sweden
 Quote:

Don't you get an allowance, i.e. no tax on the first few thousand?


Only for the first $1000.

 Quote:

In round figures, it looks like if I wanted to employ someone in Sweden and pay him $300 per week I'd have to actually shell out $400 per week total.


Right on. And that's provided the union doesn't get into it. If it does, you'll have to pay even more.

And we have 25% VAT

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