The average income per capita according to WorldData.info (note that figures for Slovakia, Slovenia, Estonia, Lithuania and Latvia were sourced from OECD data).
They say that money makes the world go round and that’s certainly true to some degree. While cultures and customs change around the world, we all rely on financial security in our lives, both in our careers and in retirement, and also all have to abide by the laws of the land and pay our taxes too!
But which countries have it best when it comes to their finances when we take into account factors such as average earnings, number of days worked, pension income and taxes paid?
The country with the
Perhaps the most important thing when it comes to your finances is of course, how much money you have coming in. In that respect, Switzerland is the country where you’re best off, with an average annual income per capita of $85,500. Switzerland has long been seen as one of the richest countries in the world, with a strong economy backed by its robust banking sector, with the largest city, Zürich, one of the most important financial and banking cities in the world. All of this leads to a prosperous economy for the country and in turn, locals enjoy some of the highest wages in the world.
The country with the
While it’s undeniable that everybody has to put in the hours to earn a living, some countries have to work a lot harder than others to earn their keep. For example, in Germany, the average person works for 1,354 hours a year, which is over 900 fewer than in the likes of Mexico. In Germany, there are strict laws which limit the number of hours a person can work, but given that they have a very successful economy, with a GDP of over $3 trillion, perhaps all the stereotypes about ‘German efficiency’ hold some truth?
The country with the
While your working life is understandably the most important period of your life when it comes to your finances, it’s also vital that you’re well looked after during your retirement. Countries all have very different systems when it comes to pensions, which makes them difficult to compare, but looking at ‘net replacement rates’, which show how much of your pre-retirement earnings you can expect to make from your pension, India comes out on top.
The country with the
Income tax is an expense that we all have to incur, but the rate which we’re charged at varies a lot depending on where in the world you live. Of course, there are certain ‘tax-haven’ nations which charge their residents no income tax at all, but of the countries which we looked at, it was Bulgaria and Romania which had the lowest rate, at just 10%.
The country with the
When it came to local VAT (value-added tax) rates, it was once again Switzerland that came out on top, with a standard rate of just 7.7% (with reduced rates of 3.8% and 2.5% which apply to things such as hotel accommodation and food and drink). However, the VAT rate was as high as 27% in countries such as Hungary.
The country with the
Despite having the highest VAT rate of any of the countries which we looked at, Hungary actually had the lowest rate when it comes to corporate tax, at just 9%. That’s almost four times lower than in Brazil, where companies pay up to 34% in tax!
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Norway ranked fifth overall in our ranking, scoring relatively highly on most of the factors that we looked at.
In particular, Norway was the country with the second-highest average earnings, at $82,500 a year, with a strong economy backed by the huge oil and gas sector in the country which has filtered through to average earnings.
Despite these generous wages, Norwegians also had some of the lowest working hours in the ranking, with the average person working 1,417 hours in a year, with most companies closing at 4pm, and a strong emphasis on efficiency, but also the importance of work-life balance.
$82,500
1,417 hrs
52%
38%
25%
22%
5.99
Average annual income
The average income per capita according to WorldData.info (note that figures for Slovakia, Slovenia, Estonia, Lithuania and Latvia were sourced from OECD data).
Average annual working hours
The average annual working hours per worker according to Our World in Data.
Average pension as a % of pre-retirement earnings
The net pension replacement rate according to OECD data. This shows the average individual net pension entitlement divided by net pre-retirement earnings, taking into account personal income taxes and social security contributions paid by workers and pensioners. (Note that for this section, an average of the male and female rates was taken from each country.)
VAT or equivalent (standard rate)
The standard VAT rate (or that of equivalent taxes such as goods and sales taxes), according to Avalara VATlive. In countries such as the USA, where the VAT rate differs slightly in different parts of the country, the highest rate was taken.
Personal income tax rate
The average personal income tax rate according to Trading Economics.
Corporate tax rate
The average corporate tax rate according to Trading Economics.
