In this Britain, the payslip is European.
Every argument about the NHS, social care, childcare or defence ends the same way: other European countries manage it. And that's true. They do. This series exists to finish the sentence nobody finishes: manage it with whose money?
So we ran the counterfactual. Same job. Same gross salary. Same Britain. One change: your earnings are taxed the way the average EU economy taxes them, including the part of the bill your employer pays on your behalf, which most people never see. This is not an argument for or against. It is an invoice.
The measure that makes countries comparable is the tax wedge: income tax, plus employee social contributions, plus employer social contributions, as a share of what your job costs in total. The OECD publishes it every year for a single worker with no children. The 2026 edition (data year 2025) looks like this at the average wage:
The tax on being employed, at the average wage
TAX WEDGE, SINGLE WORKER NO CHILDREN, 100% OF AVERAGE WAGE, 2025 · % OF TOTAL LABOUR COST
SOURCE: OECD TAXING WAGES 2026, TABLE 1.1 (DATA YEAR 2025). EU-13 = UNWEIGHTED AVERAGE OF THE 13 EU MEMBER STATES SHOWN. AT 67% OF THE AVERAGE WAGE THE UK IS 28.0% VS EU-13 37.0%.
Read that chart again, because it is the opposite of the national mood. Britain's tax burden is at a post-war high. The UK's tax wedge rose faster in 2025 than in any other OECD country, up 2.45 points in a single year, courtesy of the employer NI rise and frozen thresholds. And yet the British worker is still the lightest-taxed in that entire list, below even Ireland, and the gap to the EU average is still nearly ten points of labour cost.
How can both be true? Because Britain's tax rises have gone almost everywhere except the ordinary payslip: employers, dividends, capital gains, VAT-able spending, fiscal drag at the top. The one thing no British government has dared do for two decades is tax the median worker the way Germany, France or Belgium does. The top 10% already pay about six of every ten pounds of income tax. The gap between Britain and Europe is not at the top of the payslip distribution. It is in the middle. At you.
No vibes. Here is exactly what we did, and what we deliberately did not do.
ASSUMPTIONS, IN PLAIN ENGLISH
- Comparator: "EU-13", the unweighted average of the 13 EU member states in the OECD's comparative tables (Germany, France, Belgium, Italy, Spain, Netherlands, Austria, Denmark, Sweden, Finland, Ireland, Poland, Portugal). No cherry-picking Belgium; Poland and Ireland pull the average down.
- Both layers counted: the headline includes employer social contributions, because they are part of what your labour buys whether or not they print on your payslip, and because the EU loads much of its worker taxation there (France's employer contributions alone can approach 45% of gross pay; UK employer NI is 15%). Economists broadly agree the employer side is substantially borne by wages over time. We show the payslip layer separately throughout.
- UK side is exact: 2025–26 rules (personal allowance £12,570; basic rate 20%; employee NI 8%/2%; employer NI 15% above £5,000). Our UK engine reproduces the OECD's published UK figures to 0.1 point at both reference wages.
- EU rates between the OECD's two published wage points (67% and 100% of the average wage) are interpolated on a straight line; below 67% we extend the same line, which is conservative: most EU systems charge flat-rate social contributions from near-zero, so real EU taxes on low pay sit above our line (Eurostat's euro-area wedge at 67% of the average wage is 39.5% vs our 37.0%).
- Static model. No behavioural response, no growth effects, in either direction. Single worker, no children (families: see below).
- Scope: "lower and middle earners" means the 30.4 million taxpayers between the personal allowance and £50,000. Everyone above £50,270 is untouched: Britain's marginal rates up there are already European. Aggregates count only the working-age 77.7% of taxpayers.
- VAT is excluded from the headline (UK standard rate 20% vs EU average 21.9%; the gap is real but small next to the payroll gap).
What the EU-13 average tax system would take from three British salaries, next to what Britain actually takes. First the payslip you'd see; then the full wedge, counting the employer's line.
Notice the split. At the median salary, only about a third of the extra European tax would show up as deductions you can see. The other two-thirds arrives on the employer's line: invisible to you, but paid out of what your job costs, which is to say, over time, out of your wages. This is the European settlement's quiet genius: the worker funds the state without ever quite seeing the bill.
And if you'd rather be specific than average: put the median British earner on German rules and their payslip deductions go from £7,400 to £13,444 a year, and take-home pay falls by £503 a month. On French rules the payslip deduction looks gentler, but the total tax on employing them nearly doubles, from £12,500 to £21,174.
| £39,000 EARNER UNDER… | PAYSLIP DEDUCTIONS /YR | TAKE-HOME /MO | TOTAL LABOUR TAX /YR |
|---|---|---|---|
| UK rules (actual, 2025–26) | £7,400 | £2,633 | £12,500 |
| EU-13 average | £9,385 | £2,468 | £17,683 |
| Germany | £13,444 | £2,130 | £21,601 |
| France | £9,378 | £2,468 | £21,174 |
(CENTRAL £98BN; RANGE £91–114BN · EQUIVALENT TO ROUGHLY 14P ON THE BASIC RATE OF INCOME TAX)
One hundred billion pounds a year is the size of the hole between what Britain wants and what Britain pays. It is nearly a third of the entire income tax take (£329bn) again. It is more than half of VAT (£181bn). It is, not coincidentally, roughly the scale of the borrowing Britain does instead, the subject of our public-finances coverage, where the OBR's forecasts go to be exceeded.
SINGLE WORKER, NO CHILDREN. UK: EXACT 2025–26 RULES. COMPARATOR: OECD TAXING WAGES 2026 EFFECTIVE RATES, LINEAR BETWEEN THE 67%/100% AVERAGE-WAGE POINTS (CONSERVATIVE BELOW 67%). MODEL SCOPE ENDS AT £50,000. ABOVE THAT, BRITISH MARGINAL RATES ARE ALREADY EUROPEAN.
Honesty cuts both ways, so here is the other side of the ledger. That money in Europe is not incinerated. It buys healthcare systems where waiting for treatment is measured in weeks, not years. It buys childcare that costs a fraction of a British nursery bill, earnings-linked state pensions two and three times more generous than Britain's, unemployment insurance that actually replaces income, and public transport that arrives. German workers get back a state that visibly works; that is precisely why they tolerate a 49% wedge.
Nor is the European model painless: Germany's contribution rates are straining under an ageing population, and France's pension arithmetic triggered a small revolution. The point of this file is not that Europe is right. The point is that Europe is consistent: European services, European taxes, paid by the broad middle of the earnings distribution, because that, not the boardroom, not the billionaires, is where the money is.
Britain is the anomaly: it promises the European column of services while charging the ordinary worker something closer to the American column of taxes, and puts the difference on the national credit card.
Neither main party will say the number in this file out loud. Both are committed, publicly and permanently, to European-quality services. Both are committed, publicly and permanently, to never charging the median voter for them. The residual of those two promises is roughly £100 billion a year, and it shows up in the borrowing figures, the tax-burden records, and the quiet degradation of everything the state does.
"Tax the rich" cannot close it. The arithmetic has been done to death, including by us: the top 1% already supply about 30% of income tax, the top 10% about 60%, and every European country that actually funds a big state does it the same way: from the middle, at rates Britain has never dared to propose. If someone promises you Scandinavian services without touching your payslip, they are not describing a policy. They are describing a deficit.
You can have the European state. This is the invoice. Or you can have your payslip. Britain has spent twenty years pretending it doesn't have to choose. The £100 billion of borrowing is what pretending costs.
- OECD, Taxing Wages 2026 (published 22 April 2026, data year 2025): tax wedge and net personal average tax rate, single worker no children, at 67% and 100% of the average wage, in Tables 1.1, 1.3, 1.4 and the country tables. UK average wage 2025: £55,983 (OECD Secretariat estimate).
- OECD Data Explorer, labour taxation comparative tables: machine-readable country values used in the model.
- HMRC, Income Tax liabilities statistics (June 2025): 2025–26 projections. 39.1m taxpayers, 30.4m basic rate, counts by income range, 8.72m over state pension age, £323bn total liabilities.
- ONS, Employee earnings in the UK: 2025 (ASHE): median full-time gross annual earnings £39,039, April 2025.
- HMRC, Direct effects of illustrative tax changes (June 2025): 1p on the basic rate ≈ £6.9bn (2026–27), used to sanity-check the aggregate.
- HMRC, tax receipts annual bulletin (June 2026): 2025–26 outturn. Income tax ≈ £329bn, VAT £180.7bn.
- Tax Policy Associates (June 2026) and Resolution Foundation (October 2025): independent corroboration that UK taxes on average and low-paid workers sit far below comparable countries.
- IFS, "How do other countries raise more in tax than the UK?" (R160): the UK median earner would pay ~20pp more of labour cost under the French system; same conclusion, earlier data.
- Tax Foundation, 2026 VAT rates in Europe: EU average standard rate 21.9% vs UK 20%.
- Full model code and assumptions: static microsimulation, EU-13 unweighted average, linear interpolation between OECD wage points, working-age share 77.7% applied to HMRC range counts. UK engine validated to ±0.1pp against OECD's published UK wedge and payslip rates at both reference points.