How Much do Employers pay for Social Security Tax Rate in Europe?

The employer's social security tax rate for employers is a key factor in calculating total employment costs. Although each European country has its own social security framework and contribution rates, they are all required to follow certain shared standards. Both employers and employees must contribute to these social security taxes, making it essential to understand how these costs very across countries.

Because European social security systems differ significantly from those in the United States and Canada, it is advisable to familiarize yourself with the diverse contribution rates across Europe before planning an international expnasion.

In this blog, we provide a clear overview of the 2025 social security tax rates for employers across Europe.

How expensive can Social Security Tax Rates in Europe be?

As you may know, the total employment costs include more than just wages/ salary. The employer social security tax rate is an important element in the total employment costs. It consists of financial support for workers when they are unable to be employed (i.e. retirement, sickness, parental leave). It gives the stability Europe is known for.

In Europe, although every country has different obligatory social contributions for employers, there are also some commonly agreed-upon standards that they need to comply with. Before expanding overseas, it is recommended that you be aware of the different rates in the European continent.

Employer Social Security Tax Rate in Europe for 2025 compared to 2024

Table 1. The social security tax rates of 17 European countries, US and Canada for 2025 compared to 2024.

Note: Tax rates will be checked regularly in 2025. However, please confirm tax rates with the country's tax authority before using them to make business decisions. Source: tradingeconomics.com

What is the Impact of Social Security Tax Rates on the Employment Costs for North American SMEs?

Higher tax rates in Europe, contributing to overall employment costs, can influence the decision-making process when hiring internationally.

The social contributions are quite important for European countries and cannot be neglected.

Not only does the social security system depend on the region or country in Europe, but it also requires North American small and medium-sized companies' new strategies to navigate this complex landscape.

What should you know about Social Security Tax rates in Europe?

The Social Security Taxes and Contributions in Europe differ significantly. Especially in EU member states, there are commonly agreed-upon and legally binding obligations for employers; the welfare of employees is taken into serious account.

• France has the highest rate of social security (approx. 45%)
• Romania has the lowest rates (2.25%)
• On average, the social security tax rate for employers in Europe in 2025 is around 20 – 25%.
• Compared to the contributions of the North American employers, the European median is quite higher than the normal contributions of US and Canadian corporations.

These variations can be influenced by external factors such as political reformations, labour policies and EU regulations.

The above-mentioned contributions might differ should the employee opt for (if eligible) private health insurance and pension schemes.

How can North American Employers address these Costs effectively?

For U.S. and Canadian companies expanding to Europe, understanding and managing employer tax obligations is critical to maintaining profitability.

Key strategies:

• Use an EOR partner like EuroDev to handle payroll and compliance.
• Plan hiring cycles based on fiscal year thresholds in each country.
• Regularly monitor tax reforms to adjust budgets.
• Leverage EuroDev’s HR Outsourcing expertise to ensure compliance in 20+ European markets.

Interested in market-specific guidance? Contact EuroDev’s HR Outsourcing team for personalized assistance. And that's where we step in. Explore our HR Outsourcing services to find out more.

Written by Mervin Jansman, HR Outsourcing Business Development Manager at EuroDev.

Disclaimer: While we strive to provide accurate and timely information, please note that HR policies and regulations can change frequently. It is recommended that you seek guidance from our HR consultants to ensure that the data presented here is current and accurate.

Sources: KPMG, WorldOMeter