Germany has a reputation for high taxes, particularly when it comes to people on above‑average incomes. But new figures for 2026 show that while Germany does tax high earners more heavily than many countries, it is far from an outlier among developed economies.
A look at the international data reveals that Germany sits firmly in the upper middle of the pack when it comes to personal income tax rates. Just as importantly, only a relatively small proportion of taxpayers actually pay these headline rates.
How Germany compares with other European countries
Across Europe, tax rates for the highest earners vary widely. According to figures reported by Euronews, top personal income tax rates in 2026 range from as little as ten percent in countries such as Bulgaria and Romania to more than 60 percent in Denmark.
Nordic and Western European countries tend to apply some of the highest rates, reflecting a long‑standing preference for high taxation alongside generous public services.
Germany’s position is more moderate. With a top rate in the mid‑40 percent range, it sits alongside countries such as Italy, Ireland, Finland and the UK.
This places Germany above the European average but well below countries including Denmark (60.5 percent), France (55.4 percent) and Austria (55 percent).
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How Germany compares globally
Looking beyond Europe, data from the World Population Review shows that Germany’s top personal income tax rate of 45 percent is higher than that of several major economies, including the United States, where the federal top rate is 37 percent. It’s worth bearing in mind, though, that this excludes state taxes in the US which can add as much as 13 percent to the final rate for some.
It also exceeds the top tax rates in countries such as Canada, Australia and South Korea.
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At the same time, Germany taxes high earners less aggressively than Japan, where the top rate is close to 56 percent.
Large emerging economies show a wide spread of tax rates: India’s top rate is just under 40 percent, while Brazil’s stands at only 27.5 percent. China, meanwhile, applies a top rate broadly in line with Germany’s.
Who is liable to pay the top income tax rate in Germany?
The headline rates in Germany apply only to slices of income rather than to someone’s entire earnings.
In 2026, only earnings above €277,825 are subject to the maximum tax rate of 45 percent, sometimes known as the “rich tax” or Reichensteuer.
The next income tax rate of 42 percent – the standard top rate of tax – applies to the portion of taxable annual income between €69,878 and €277,825. (The thresholds are adjusted each year to account for inflation).
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Only income within this band is taxed at 42 percent, while income below this level is taxed at lower rates. Finanz.de estimates that about four million taxpayers fall into the 42 percent tax band.
For people on lower and middle incomes, the picture is very different. The first €12,348 of taxable income is covered by the basic allowance and is completely tax‑free.
Income above this amount is taxed gradually, starting at 14 percent and rising step by step through the tax brackets.
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