Social security contribution rates among world’s highest

By Thanos Tsiros

Employers’ and employees’ social security contributions may be going down by 3.9 percentage points as of July 2014, but Greece remains among the countries with the highest rates, according to figures from the Organization for Economic Cooperation and Development (OECD).

Contributions by employers will drop by 2.9 percentage points in July, having also declined by 1.1 percentage points in November 2012. As a result, they will amount to 24.56 percent, compared to 28.56 percent before November 2012. Despite this considerable decline, Greece will remain in the top 10 on the chart with the highest rates among OECD member states, ranking at No 9.

Besides the rates level, comparing the Greek system with that of other states highlights other issues: For instance, Greece does not vary its rates for the calculation of contributions depending on the level of annual salaries, while developed economies such as Germany, France, the US and Japan apply lower rates for employees with high salaries in order to reduce the motivation to hide their incomes.