Tax Freedom Day or how much time do you spend on others?

Have you heard of the term Tax Freedom Day? It is not a holiday or a day during which any tax is remitted. Each year, Tax Freedom Day determines how many days out of the calendar year we work for the state and how many we work only for ourselves.

How much of our income and expenditure is actually taxes?

Tax Freedom Day represents the tax burden on working people. It basically and simply divides the year into 2 periods. During the first part of the period we work only for the state, and in the second part we finally work only for ourselves.

The sooner the better

The sooner the imaginary day of tax freedom arrives, the lower our tax burden and, simply put, the better off we are. The sooner the day of tax freedom comes, the more money we will have left over for our own enjoyment and purchases (on which we again pay taxes).

For 5 months “To Panske!”

This year, Tax Freedom Day falls on 30.5.2018. So we’ve got it behind us, and we’ve already done our work for the state this year. However, when you consider that 5 months (151 days) out of twelve you are working for someone else, it doesn’t look so good anymore. In very simplistic terms: If you earned 365 euros in a year, you would have to give 151 to the state.

Who is better off?

Romania has the lowest number of tax burden days – it is only 124 days and the tax freedom day for them is 3.5.2018. For comparison, our Czech neighbours work for the state until 22.6.2018 (174 days) and the worst is Luxembourg, which has a tax freedom day on 28.9.2018 and works for the state for up to 271 days.

Don’t pay more than necessary

Many sole traders and entrepreneurs are unable to get a proper grip on their tax and levy burdens and because of this they are missing out on many benefits that could help them save their hard earned money. If you are interested in accounting, consulting or tax optimization, do not hesitate to contact us.