How long does it take to earn money for yourself instead of the taxman? “Tax Freedom Day” varies greatly by country, but good tax planning can help reduce your tax burden, wherever you live.
If you ever had the feeling that you have spent half your working life just paying tax, you may not be far wrong. What with income tax, national insurance/social security, capital gains tax, VAT, council tax, excise duties and so on, a considerable amount of our income goes to the taxman each year.
Even if you are retired, you are still faced with tax on savings, investments and pensions, not to mention the amount payable in VAT each year. Having paid so many taxes all your life, you will not want to pay more than necessary – that’s why tax planning plays such an important part in protecting your wealth and legacy.
Tax freedom days across the EU
Each year, the Institut Economique Molinari compares the taxes payable by the average wage earner across EU member states (now EU plus the UK), measuring how many days of the year are devoted to paying taxes. While this study mainly focuses the ‘average worker’ and payroll taxes (income tax and social security), it illustrates the general tax burden of each country and how they compare to each other.
The study calculates a “Tax Freedom Day” for each country – the date on which an employee has earned enough to pay off all taxes for the year and can start to “use the fruit of their labour as they please”.
Institut Economique Molinari’s methodology takes the average real gross salary (gross income + employer social security contributions) as the base, and deducts all social security payments, personal income taxes and estimated VAT paid over the year to establish the ‘real net salary’. From this we can determine the ‘real tax rate’.
For 2025, the average tax freedom day across the EU was 11 June. 13 countries had an earlier day this year, with Maltese taxpayers gaining 17 days, but 15 countries are experiencing a higher tax burden.
While Cyprus had the lowest date for many years, this year it was overtaken by Malta. Malta’s tax freedom day fell on 15 April in 2025, followed by Cyprus with 24 April. France once again has the latest tax freedom day with 18 July, followed by Belgium and Austria with 16 and 14 July respectively.
How did countries fare?
France
With a tax freedom day of 18 July, one later than last year, French employees worked 199 days in 2025 just to pay their taxes. While the average real gross salary is €62,282, their real tax rate is 54%. This leaves them with a real net salary of just €28,400.
Portugal
The study reveals that Portugal’s tax freedom day landed on 7 June this year, six days earlier than 2024, placing it 11th in the rankings. While a noticeable improvement, the average Portuguese employee still worked for 158 days of 2025 just to pay their tax bill.
The average real gross salary in Portugal is €29,347, but after the real tax rate of 43%, workers in the country are left with just €16,664 to spend on themselves and their families.
Spain
According to the study, Spain’s tax freedom day fell on 14 June 2025, four days later than the previous year, and 16th in the rankings. For the first 165 days of 2025, every cent earned by the average Spanish employee was taken by the government in tax.
The average real gross salary in Spain is €39,481, but after tax workers are only left with €21,733, making a real tax rate of 45%.
Cyprus
Cyprus has the second lowest tax burden in the EU according to the study. Its tax freedom day of 24 April is three days later than in 2024, and workers have paid off their taxes after 114 days.
The real gross salary is €32,723 and the real tax rate 31%, giving workers a real net salary of €22,506.
Malta
Employees in Malta now benefit from the earliest tax freedom day in the EU. It landed on 15th April in 2025, just 105 days into the year and 17 days earlier than in 2024 thanks to an expansion of income tax brackets. Malta’s real tax rate is now 29%.
The UK: “Things are only getting worse”
According to the Institut Economique Molinari study, the UK’s tax freedom day landed on 8 May, with a real tax rate of 35%.
However, many think tanks undertake their own research using different methodologies. In the UK, the Adam Smith Institute (ASI) establishes tax freedom day by measuring the entire tax take, including indirect taxes.
The ASI’s approach places the UK’s 2025 date more a month later, on 12 June. This is six days later than in 2024, and 21 days later than before the pandemic.
And it warns that “things are getting worse”. Based on current taxation and government spending plans, and Office for Budget Responsibility projections, ASI research concludes that the UK’s tax freedom day will fall on 24 June by 2028, higher than during World War II. By 2030 it could fall over halfway through the year, with taxation surpassing 50% of Net National Income. The ASI explains that in-year taxation hasn’t reached such heights before, “not even during wartime, the economic crisis of the 1970s and reforms of the 1980s”.
Its research also shows that this tax burden is increasingly carried by the rich. The top 1% paid 28.2% of the UK’s total tax burden in the last tax year, with the top 5% paying 48.8% and the top 10% contributing 60.2%. With wealthy taxpayers leaving the UK as a result, the Adam Smith Institute predicts “the UK is on course to lose the greatest proportion of millionaires in the world within this parliament, raising questions about the viability of our current tax regime”.
How much tax are you paying in 2025?
Of course, the research is just indicative of the average taxpayer in each country. Higher earners will generally have a later tax freedom day. Retirees don’t have to worry about social/national insurance contributions, but still face taxation on their savings, investments and pensions, as well as indirect taxes. Some countries also impose a full or partial (eg. on property) wealth tax.
Every taxpayer is different, but if you feel you are paying too much tax this year, now is the time to take action to establish if you can mitigate your liabilities for 2026 and beyond. Look beyond your annual tax liabilities to determine if you can improve inheritance taxes for your family too.
In many cases, there are steps you can take to lighten your tax burden, especially on your capital investments and pensions, and your estate for your heirs. While of course we all have to pay our share of taxes, cross-border taxation is highly complex – do not risk getting it wrong or paying more than you actually have to. Take personalised, specialist advice on the compliant tax mitigation opportunities available in your country of residence and the UK – you may be surprised at how you can improve your tax situation. If you are considering leaving the UK, take cross-border tax advice before putting any plans into action.
Blevins Franks has 50 years of experience advising UK nationals moving to and living in Europe on effective, cross-border wealth management solutions. We have in-depth knowledge of the tax regimes in France, Spain, Portugal, Cyprus and Malta, and how to use the local systems to your advantage. Our strategic financial planning, using approved arrangements, enables many of our clients to save a significant amount of tax. If you are considering leaving the UK, speak to our advisers before putting any plans into action. The earlier you get in touch, the more tax you may be able to save.
Contact Blevins Franks today
Summarised tax information is based upon our understanding of current laws and practices which may change. Individuals should seek personalised advice.
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