Glossary · Salary and tax
Social security contribution
Mandatory payroll deduction funding state pension, public healthcare, and unemployment programs — distinct from income tax.
Social security is a separate deduction from income tax. It funds the state pension system, public healthcare (in countries that have one), unemployment insurance, and parental leave. Rates vary widely: Spain employees pay ~6.5%, Germany ~20%, France ~22%, the US ~7.65% (FICA), Singapore 20% (CPF).
In some countries the contribution is capped above a certain salary; above the cap, additional income only pays income tax. In others (Portugal, Spain) it applies on the full salary. This is why high earners benefit disproportionately from moving to countries with cap-and-fall-off systems.
Social security contributions usually entitle you to local public benefits — state pension accrual, public healthcare access, unemployment if let go. When relocating, check whether your home country has a totalization agreement with the destination, otherwise years of contributions can be split across systems with neither qualifying for full benefits.
Where Mundevo uses this
- Methodology — /methodology
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