In 19 EU Countries the State Is the Single Biggest Source of Welfare Funds

Four sources of money

Every Member State runs social protection schemes: the pensions, health insurance, sickness and disability benefits, family allowances and unemployment benefits that together make up a welfare state. Eurostat records what those schemes receive under ESSPROS, the European System of integrated Social Protection Statistics, a common set of accounts to which every Member State reports. The money is sorted into four types according to who provides it, and each type is expressed as a share of the country's GDP.

The four are employers' social contributions; the contributions of protected persons, meaning the employees, self-employed people, pensioners and others who pay into the schemes that cover them; general government contributions, the money public authorities put into the schemes from taxes earmarked for the purpose or from general revenue; and other receipts, which cover property income, meaning the interest, dividends and rents the schemes earn on what they own, together with miscellaneous items.

Across the EU in 2024, general government put in 12.13% of GDP, employers 10.36%, protected persons 6.15% and other receipts 0.97%, all four of them provisional. Added together they come to 29.61% of GDP, a sum computed here, and every share of receipts quoted on this page is derived the same way, by dividing one type by that sum. The state is the biggest single payer, with 41.0% of the total, yet the two kinds of social contribution, added together in the same way, bring in 16.51% of GDP, or 55.8% of receipts. Taken as a whole, the Union still pays for social protection mainly through contributions rather than out of the public budget.

Behind the EU figure the national mixes diverge widely. At the edges of the table sit three countries, each leaning on a different payer.

Denmark: the public budget pays

Denmark's general government contributions reach 25.42% of GDP, the highest figure in the Union; Finland is second at 16.63%. Danish employers contribute 3.91% of GDP and protected persons 2.62%, so the state supplies 77.6% of everything the Danish schemes receive, the largest share in the EU on the derived figures.

Finland and Sweden, the next two in absolute terms with Sweden at a provisional 15.66%, do not resemble Denmark. Swedish employers pay 11.89% of GDP, also provisional and the third-highest employer contribution in the EU, and Finnish employers 9.86%. In each, the state provides roughly half of receipts: 50.7% in Sweden and 49.9% in Finland.

Measured by share rather than by size, Denmark's nearest neighbour is Malta. Maltese general government contributions are a modest 9.75% of GDP, but the schemes there receive so little from anyone else that the state's part comes to 72.8% of the total. Ireland follows at 59.3%. Denmark, Malta, Ireland, Sweden and Italy are the only five Member States where the state provides more than half of receipts, and the last two cross that line on provisional values: Italy's share is 50.5%. Finland is the nearest country below it.

In six Member States the state on its own outweighs both kinds of contribution put together: Denmark, Finland, Ireland, Italy, Malta and Sweden.

Estonia: the employer pays

Estonian employers contribute 12.46% of GDP. That is not the highest figure in the Union: French employers pay 13.48%, a provisional value, and Sweden's 11.89% comes third. What sets Estonia apart is how little arrives from anyone else. Estonian protected persons pay 0.26% of GDP, the lowest figure in the Union, and the Estonian state 4.74%, also the lowest, so employers supply 71.3% of what Estonia's schemes receive, a derived share. No other Member State draws even half of its receipts from employers: Czechia comes closest at 48.0%, then Slovakia at 47.4%. France, for all the size of its employer contribution, takes 39.1% of its receipts from employers, a share computed from provisional values, because its state puts in more still, a provisional 14.80% of GDP.

Employers are the largest of the four sources in six Member States: Estonia, Czechia, Slovakia, Poland, Germany and the Netherlands. Spain was on that list for 2023 by four hundredths of a percentage point and leaves it for 2024 by fifteen hundredths, with 11.29% of GDP from the state against 11.14% from employers, both provisional. A margin that thin can be reversed by a revision.

The three lowest employer contributions are Romania's 1.66% of GDP, Malta's 2.37% and Lithuania's 2.88%. In Romania and Lithuania most contributions are recorded in the protected persons' column instead: 10.95% and 6.73% of GDP, both above the EU's 6.15%.

Romania and Slovenia: the insured pay

Romania collects 10.95% of GDP from protected persons, more than any other Member State, and they provide 59.4% of its schemes' receipts, also the highest share. Slovenia, at 9.50% of GDP and 39.7% of receipts, is the only other country where protected persons are the largest source. Germany's protected persons pay 9.86%, the second-highest amount and a provisional one, but German employers pay more, at 11.07%, also provisional.

Protected persons outpay employers in five Member States: Croatia, Hungary, Lithuania, Romania and Slovenia. In Cyprus and Luxembourg employers stay ahead by about a tenth of a point or less. At the bottom sit Ireland at 1.78%, Malta at 0.82% and Estonia at 0.26%.

Germany is the case of balance. On shares derived from its provisional figures, employers provide 34.2% of German receipts, the state 33.4% and protected persons 30.5%: of all 27, Germany shows the narrowest distance between the largest and the smallest of the three main sources, a spread of 3.7 percentage points against 7.5 in the Netherlands, the next most even.

The split can change within a year

Romania did not always look like this. In 2017 Romanian employers paid 6.76% of GDP and protected persons 4.48%. In 2018 the employers' figure was 1.93% and the protected persons' 10.28%. Added together, the two moved far less, from 11.24% to 12.21% of GDP, figures computed here.

Lithuania took a similar step a year later. Employers' contributions there fell from 9.30% of GDP in 2018 to 2.63% in 2019, while protected persons' contributions rose from 3.17% to 6.82% and general government contributions from 4.43% to 7.96%.

The table records these changes, not their causes. What it does establish is that the line between what employers pay and what the insured pay can shift by several points of GDP from one year to the next. That is the reason this page reads the two kinds of contribution together as well as apart: a ranking of employers' contributions alone can reorder countries without any change in how much their schemes collect.

The size of the total is another matter

What a country's schemes receive in total is a separate question from who supplies it. On the four types added together, French schemes receive 34.50% of GDP, a sum of provisional values, Finnish 33.36% and Dutch 33.04%, the three largest totals. Maltese schemes receive 13.39%, Irish 14.42% and Hungarian 16.49%, the three smallest.

Ireland's figure needs its denominator attached. Irish GDP includes profits and intellectual-property income of multinational groups with little counterpart in domestic activity, so any ratio to it understates the domestic effort. The shares used above do not depend on GDP, which is why Ireland's 59.3% from the state can be set beside Denmark's 77.6% even where the ratios to GDP cannot.

Other receipts are the smallest of the four types in every Member State, and 0.97% of GDP across the EU. They count for most in the Netherlands, at 4.49% of GDP and 13.6% of Dutch receipts, the highest share in the Union, followed by Cyprus at 2.47% of GDP and 11.0% of receipts.