According to the KPMG International’s Individual Income Tax and Social Security Rate Survey 2009 released on Monday, Slovenia tops the world's list of personal income tax rate and social security rates for employees earning US$ 100,000 gross annually with 54.9 per cent. The country is followed by Croatia (53.5 per cent) and Hungary (48.1%). The overall tax rate for Croatia includes a 34 per cent income tax and a 19.5 per cent social security rate.

The report, however, was concluded before 1 August 2009 and Croatia’s 53.5 per cent did not include the latest, so-called crisis tax. If the new 4 per cent crisis tax is added to the income tax and social security rate for employees with incomes of up to USD 100,000, Croatia takes the lead on a list.

For employees earning US 300,000, the countries with the highest rates were Slovenia (60.4 per cent ), Denmark (57.1 per cent) and Croatia (54.5 per cent ).

The report, which covered 86 countries for the period 2003-09, also concludes that, although in decline, the highest personal income taxes in the world are still paid by the citizens of the European Union (EU). In 2009, they were on average 36 per cent.

“In the current economic environment where countries face increasing budget deficits and need funding for various economic stimulus packages, it is becoming clear that some are turning to those in the highest income brackets amongst their current tax bases to increase revenue,” said Rosheen Garnon, global head of KPMG’s International Executive Services practice and a partner in the Australian firm.

KPMG’s 2009 Individual Income Tax and Social Security Rate Survey is a cross-border survey of personal tax and social security rates with historical data from 2003-2009. The report covers 86 countries, concentrating on the highest level of personal tax payable to the central government. For ease of comparison, the survey has excluded, where possible, other taxes such as state and municipal taxes.

View the survey