Employer contributions
The portion of payroll taxes paid by the employer on top of gross salary — not part of take-home but part of total labour cost.
Employer contributions are the social-insurance and payroll taxes the employer pays on top of the employee's gross salary. They do not appear in the employee's payslip or affect their net pay, but they significantly raise the total cost of employment. Continental European countries impose much higher employer contributions than the UK or US.
Indicative employer-side rates: France ~42% (the heaviest in the OECD), Spain ~30%, Germany ~21% (roughly mirroring the employee side of Sozialversicherung), UK ~14% (Class 1 secondary NI at 15% from April 2025, threshold £5,000), US ~7.65% (employer-matched FICA, plus federal/state unemployment insurance varying by state).
Employer contributions matter when comparing job offers across countries: a €60k gross job in France costs the employer ~€85k all-in, vs. ~€70k for the same gross in the UK. This calculator models the EMPLOYEE side only — what arrives in the bank account. The tax-wedge concept captures the gap between total labour cost and net take-home.
Calculator pages that use this term
See also
- Tax wedge — The OECD measure of the gap between an employee’s total labour cost and their net take-home — capturing both employee and employer contributions.
- Sozialversicherung (German social insurance) — Germany's four-branch mandatory social insurance — KV, RV, AV, PV — funded by ~20% combined employee + employer share each.
- FICA (Social Security + Medicare) — The US payroll tax that funds Social Security and Medicare — flat-rate, applies before federal income tax.
- Seguridad Social (Spanish social security) — Spain's social-insurance scheme — 6.35% employee contribution on brut up to the base máxima.
- CSG + CRDS (French social-contribution levies) — Two French levies — CSG (~9.2%) + CRDS (0.5%) — funded by gross pay before income tax.