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Employees pay tax, similar to the U.S. system under the Pay As You Earn (PAYE) system. This means that tax is deducted by the employer weekly or monthly depending on how frequently you are paid. If you make more than the variable gross yearly income, tax is paid at the standard rate (20%) up to the cut-off point. Any income over the cut-off point is taxed at the higher rate of tax (42%). Unlike the U.S. system or taxation, this system seems more fair, especially because you are not paying tax on any wages that are paid towards healthcare or Old Age Pension (similar to social security).
One nation that set the standard for the tax outline currently used in most countries is Ireland...
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