Taxes: The average French worker had to work until July 22 to pay taxes to the government

The Molinari Economic Institute has published the 17th edition of its “Tax Freedom Day” report. With an effective tax rate of 55.6%, France remains the European leader. And the date has moved back another four days compared to 2025.
 

It’s a recurring topic. Every summer, the Molinari Economic Institute (IEM) calculates—based on data provided by EY—the “social and tax liberation day”: the date from which the average employee theoretically stops paying social security contributions and taxes and is free to dispose of the fruits of their labor as they see fit. In 2026, for the 17th edition, this day falls on July 22 in France. That’s four days later than in 2025: the date is pushing back, a sign that the pressure is mounting.
 

France Takes the Top Spot on the Podium
With an effective tax rate of 55.6% on the average worker (including social security contributions, CSG-CRDS, income tax, and VAT), France retains its title as the European Union’s leader in compulsory levies. The tax burden has risen by 1.2 percentage points year-over-year, reaching a level not seen since 2019, driven in particular by the reduction in employer contribution relief. Rounding out the top three are Austria (54%) and Belgium (53.99%), both of which will be released on July 17.
 

The raw figures are staggering. The average employee costs their employer 65,777 euros, but is left with only 29,232 euros after taxes and social security contributions, meaning 36,545 euros in deductions. Social security contributions alone (31,487 euros) account for 108% of disposable income after taxes and weigh far more heavily than income tax (8% of the total, or 3,026 euros) or VAT (6%, or 2,032 euros). To put it another way: an employer must pay 225 euros to provide 100 euros in additional income to an employee. This is a European record.
 

The Case Against the Pay-As-You-Go Pension System
Beyond simply stating the facts, the study puts forward a thesis: this record-high pressure is partly due to a pension financing system based almost exclusively on the pay-as-you-go method. In the absence of a funded system, France would face a “shortfall” of approximately 3,400 euros per year per working or retired person, compared to countries that have relied most heavily on retirement savings (Denmark, the Netherlands, Sweden). On a national scale, the IEM estimates this shortfall at 160 billion euros per year, or 6% of GDP. The institute also points out that, for the same employer cost, the average French employee receives 20% less net pay than their Finnish or Swedish counterparts.
 

However, the picture in Europe deserves to be nuanced. Over the past year, seventeen EU countries have seen their tax burden increase: France is therefore not the only one tightening the screws. But it starts from the highest level, which makes every increase all the more noticeable. At the other end of the spectrum, five countries—including Denmark, Finland, and Sweden—have, on the contrary, regained days of tax freedom, often thanks to better control of public spending.
 

For French savers, this assessment has very concrete implications: supplementing a pay-as-you-go pension system on their own, as its future replacement rate is set to decline. Retirement savings plans (PER), life insurance, employee savings plans… in this context, individual savings accounts are becoming increasingly important—not to replace the public system, but to cushion the loss of income upon retirement. This mindset is still not widespread enough in France, where long-term savings remain underinvested in long-term assets.
 

“It is urgent to expand the use of funded pension plans,” argues Nicolas Marques, executive director of the IEM, who believes that “without widespread collective funded pension plans, it is impossible to finance attractive pensions without undermining competitiveness and purchasing power.” This is a stance the institute—a liberal think tank that accepts no public subsidies—openly champions. Conversely, advocates of the pay-as-you-go system point out that this system has proven its resilience in the face of financial crises and that it ensures intergenerational solidarity—something that the funded system, exposed to market fluctuations, does not guarantee. The study also notes that France, a leader in taxation, ranks only 21st in Europe in terms of life satisfaction. The debate, for its part, promises to dominate the presidential campaign.