Income tax is high in Denmark, but the total tax wedge is much lower than in Germany (36.6% in of labour costs in Denmark vs. 49.4% in Germany for a single worker of average salary) [1]. The total employee contributions are similar - in Denmark 35.8% (as percent of labour cost), vs. 33.3% in Germany [2]. The rest is borne by the employer - 0.8% in Denmark vs 16.2% in Germany.
I don't know how this translates into differences in welfare spending (so it is possibly that Denmark spends more on welfare but that Germany just spends far more on other things - I haven't looked), or why the differences are so large, but of the OECD countries, Germany comes in only after Belgium (who always throne high above the rest on these lists) and Austria when it comes to the size of the tax wedge relative to total labour costs. Denmark meanwhile comes in near the OECD average, which was 35.9% in 2015.
I don't know how this translates into differences in welfare spending (so it is possibly that Denmark spends more on welfare but that Germany just spends far more on other things - I haven't looked), or why the differences are so large, but of the OECD countries, Germany comes in only after Belgium (who always throne high above the rest on these lists) and Austria when it comes to the size of the tax wedge relative to total labour costs. Denmark meanwhile comes in near the OECD average, which was 35.9% in 2015.
[1] http://www.keepeek.com/Digital-Asset-Management/oecd/taxatio...
[2] http://www.keepeek.com/Digital-Asset-Management/oecd/taxatio...