ZEW Update 2007 of BAK Taxation Index for Highly Qualified Manpower

The effective tax rate on the income of highly qualified workers is calculated using a simulation model. The calculation includes the costs to an employer of providing a highly qualified worker with a certain disposable income after tax and other deductions. A distinction is made between various levels of income, salary components and the marital status of the highly qualified manpower. The BAK Taxation Index also takes account of subsequent taxes and deductions pertaining to the salary paid. This includes in particular the pension entitlements acquired as a result of the social security contributions paid as well as the taxes charged thereto.