Most countries’ personal income taxes have a progressive structure, meaning that thetax rate paid by individuals increases as they earn higher wages. The highesttaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. rate individuals pay differs significantly across European countries.

The top statutory personal income tax rate applies to the share of income that falls into the highest tax bracket. For instance, if a country has fivetax brackets, and the top income tax rate of 50 percent has a threshold of €1 million, each additional euro of income over €1 million would be taxed at 50 percent.

Governments can generally generate revenue more efficiently by leveragingmarginal tax rates at the lower end of the income distribution than by using higher top rates. This is because applying a higher rate to a tax bracket negatively affects the incentive to earn more or less income only for individuals in that bracket, while also raising revenue from all taxpayers in higher brackets. In contrast, high top rates negatively affect the earning incentives of all individuals from whom they raise revenue.

Among European OECD countries, the average statutory top personal income tax rate lies at 43.4 percent in 2026.Denmark (60.5 percent),France (55.4 percent), andAustria (55 percent) have the highest top rates.Hungary (15 percent), theCzech Republic (23 percent), andEstonia (24 percent) have the lowest top rates.

European countries that are not part of the OECD tend to feature lower rates and tax personal income at asingle rate. Bulgaria and Romania (10 percent) levy the lowest rate, followed by Moldova (12 percent),Ukraine (19.5 percent), andGeorgia (20 percent).

For comparison, the simple average combined state and federal top income tax rate for the 50 US states andthe District of Columbia lies at 42.14 percent as of January 2025, with rates ranging from 37 percent in states without a state income tax to 50.3 percent inCalifornia.

Several European countries have changed their top personal income tax rates from last year.Denmark hasadded one more income tax bracket for incomes above DKK 2.8 million (EUR 375,000), increasing its top rate from 55.6 to 60.5 percent.Estonia increased its flat income tax rate from 22 to 24 percent, while theSlovak Republic added twotax bracketsA tax bracket is the range of incomes taxed at given rates, which typically differ depending on filing status. In a progressive individual or corporate income tax system, rates rise as income increases. There are seven federal individual income tax brackets; the federal corporate income tax system is flat. to its schedule, shifting its top rate from 25 to 35 percent. In contrast,Finland reduced its top personal income tax rate from 51.5 to 45 percent.

Other European countries are due for potential changes to their top personal income tax rates in the coming years.Austriapostponed the planned expiration of its highest tax bracket in 2026 to the year 2030, leaving its top income tax rate at 55 percent instead of reverting back to 50 percent.