A high price is not a problem. A high price for mediocre delivery is. Germany ranks second of 38 OECD states on the tax burden on labour and 17th of 27 in the EU digital index — 22nd on the digitalisation of public administration. This article sets both sets of figures side by side without adjectives. They work better without them.
What the location costs
The most robust comparative measure for the burden on labour is the OECD tax wedge: the share of income tax and social contributions in the total labour cost of a single average earner without children.
According to the OECD survey for 2025, published in April 2026, Belgium leads with 52.5 percent, Germany follows at 49.3 percent in second place, ahead of France at 47.2 and Austria at 47.1 percent. The average across all 38 OECD states is 35.1 percent.
Of every euro of labour cost in Germany, therefore, barely 50 cents reach the employee. That is one half of the equation.
What is delivered for it
The other half sits in the EU digital index. The 2026 assessment places Germany at 51.1 of 100 points and 17th of 27 member states — three places worse than the previous year, when 14th place was still enough. Denmark leads with 76.4 points, followed by Finland, the Netherlands, Malta and Luxembourg.
| Germany | Comparator | |
|---|---|---|
| Rank in the 2026 EU digital index overall score across all dimensions | 17 of 27 | Denmark in 1st place |
| Overall score a gap of a good 25 points to the leader | 51.1 of 100 | Denmark 76.4 of 100 |
| Rank the previous year the direction is downward, not upward | 14 of 27 | A decline of three places |
| Digitalisation of public administration the weakest single dimension | 22 of 27 | — |
| Fibre to the premises second to last in the Union | 43.98% of households | EU average 74.13% |
The most telling single value is not the overall rank but the administration dimension at 22nd place. Because that is precisely the dimension a business touches daily — permits, filings, certificates, applications.
How far the gap reaches shows in a single figure: at the start of 2026, of 7,509 individual public services, only 823 were available digitally nationwide. That is barely one ninth. At the implementation pace to date this produces a remaining runtime of over 19 years to full digitalisation.
A company founded today would be almost two decades old on completion.
What sits on the other side
Georgia is no benchmark for the density of social provision — it is one for administrative speed, and there the difference is not incremental.
| Germany | Georgia | |
|---|---|---|
| Registering a limited company an express option in one business day is available in Georgia | Multi-stage via notary and register court | 1–3 business days at the Public Service Hall |
| Physical presence at formation a video appointment instead of attending in person | Notary appointment required | Remote formation by power of attorney |
| Small business tax rate Small Business Status, Art. 90(1) Georgian Tax Code | Standard taxation | 1% on turnover up to GEL 500,000 |
| Personal income tax Art. 81(1) Georgian Tax Code | Progressive | 20% flat |
| Foreign investment income for individuals territorial principle, Art. 82 Georgian Tax Code | Taxable | 0% |
The difference is not a question of ideology but of construction. Georgia rebuilt its administration over the past twenty years rather than digitalising one that had grown organically. That is a head start Germany cannot make up — but it is real, and it has daily effects.
What follows from this
The question is not whether 49.3 percent is too much. A price is arguable. The question is whether the ratio holds — and whether it is moving in the right direction.
On the digital index it has demonstrably moved the other way over a single year: from 14th place to 17th. On the tax burden no relief has been adopted. That is the starting position for any location decision, and it can be looked up regardless of political preference.
What that means for the overall balance sheet is in Government Ratio 50.3% and Bureaucracy: 96,876 Rules; the Austrian account is kept separately in Austrian Bureaucracy, because it looks different.
Frequently asked questions
Where does the 49.3 percent figure come from?
From the OECD Taxing Wages survey for 2025, published in April 2026. What is measured is the tax wedge: the share of income tax and social contributions in the total labour cost of a single average earner without children. Belgium leads at 52.5 percent, Germany follows at 49.3, then France at 47.2 and Austria at 47.1. The OECD average is 35.1 percent.
How badly does Germany really score on digitalisation?
In the 2026 EU digital index Germany reaches 51.1 of 100 points, placing it 17th of 27 member states — three places worse than the previous year. The weakest single dimension is the digitalisation of public administration at 22nd place. Fibre to the premises reaches 43.98 percent of households against an EU average of 74.13 percent, which is second to last.
What does 823 of 7,509 services mean?
At the start of 2026, of 7,509 individual public services capable of digitalisation, only 823 were available nationwide — barely one ninth. Extrapolating the implementation pace to date produces a remaining runtime of over 19 years to full digitalisation of the German administration.
Is the comparison with Denmark not unfair?
It has a recognisable limit, yes. Denmark has barely six million inhabitants and a centralised administrative structure; German federalism is a real factor, not a pretext. Among the five most populous EU states Germany ranks second behind Spain. That qualifies the overall rank — but it changes nothing about the mismatch between 2nd place on price and 22nd on administrative delivery.
Why is Georgian administration faster?
Because an administration was rebuilt there over the past twenty years rather than an organically grown one being digitalised. In practice that means: registration of a limited company at the Public Service Hall in one to three business days, an express option in one business day, and formation from abroad by power of attorney without attending in person. That is a head start, not a merit of the tax system.
What do I not get in Georgia?
The scope of benefits of a central European social insurance system. The German contribution ratio funds health, pension, long-term care and unemployment insurance to a depth that does not exist there. Anyone moving has to budget for private health cover and retirement provision — that belongs in any honest calculation and is routinely omitted in the relevant advertising.
This article is general information and does not constitute legal or tax advice. The tax data comes from the OECD Taxing Wages survey for 2025 (published April 2026) and the digitalisation data from the 2026 EU digital index; the Georgian tax rates follow the consolidated Georgian Tax Code (Art. 81, 82 and 90). As of July 2026, subject to changes in the law.