US vs UK vs Canada: Complete Salary Comparison Guide 2025

Considering a job offer in the US, UK, or Canada? Understanding how each country's tax system affects your take-home pay is crucial for making informed decisions. This comprehensive guide compares all three countries with real examples, edge cases, and practical insights for different income levels.

Who Should Care About This Comparison?

This guide is essential for:

• Job Seekers: Comparing international job offers
• Relocating Employees: Understanding financial impact of moving countries
• Remote Workers: Choosing where to establish tax residency
• High Earners: Tax differences can be $10,000-$30,000+ annually
• Expatriates: Planning international careers
• Students: Understanding post-graduation salary expectations

Overview: Three Very Different Tax Systems

United States

• System: Progressive federal + state taxes + FICA
• Key Features: Standard deduction, state tax variation (0-13%+), Social Security/Medicare
• Complexity: High (federal + 50 different state systems)

United Kingdom

• System: Progressive income tax + National Insurance
• Key Features: Personal allowance, PAYE system, pension auto-enrollment
• Complexity: Medium (unified system, but NI is separate)

Canada

• System: Federal + provincial taxes + CPP/EI
• Key Features: Two-tier system, provincial variation, mandatory pension/insurance
• Complexity: Medium-High (federal + 10 provinces + 3 territories)

Side-by-Side: $75,000 Salary Comparison

Let's compare a $75,000 salary (or equivalent) across all three countries:

United States (Single, California)

• Gross Salary: $75,000 USD
• Standard Deduction: $15,000
• Taxable Income: $60,000
• Federal Tax: ~$6,500
• State Tax (CA): ~$4,500
• Social Security: $4,650 (6.2% on $75,000)
• Medicare: $1,088 (1.45% on $75,000)
• Total Deductions: ~$16,738
• Net Salary: ~$58,262 USD
• Effective Tax Rate: 22.3%

United Kingdom (Single)

• Gross Salary: £60,000 GBP (~$75,000 USD)
• Personal Allowance: £12,570 (tax-free)
• Taxable Income: £47,430
• Income Tax: £7,486 (20% on £37,700 + 40% on £9,730)
• National Insurance: £4,772 (12% on £39,770)
• Total Deductions: £12,258
• Net Salary: £47,742 GBP (~$59,678 USD)
• Effective Tax Rate: 20.4%

Canada (Single, Ontario)

• Gross Salary: $100,000 CAD (~$75,000 USD)
• Basic Personal Amount: ~$15,000
• Taxable Income: ~$85,000
• Federal Tax: ~$12,500
• Provincial Tax (ON): ~$5,300
• CPP: ~$3,800 (5.95% on $71,500)
• EI: ~$1,050 (1.66% on $63,100)
• Total Deductions: ~$22,650
• Net Salary: ~$77,350 CAD (~$58,013 USD)
• Effective Tax Rate: 22.7%

Winner for $75,000: UK (slightly), but differences are minimal at this income level.

High Income Comparison: $150,000 Salary

For high earners, differences become more pronounced:

United States (Single, Texas - No State Tax)

• Gross: $150,000 USD
• Federal Tax: ~$26,000
• State Tax: $0
• Social Security: $10,453 (capped at $168,600)
• Medicare: $2,175
• Total Deductions: ~$38,628
• Net: ~$111,372 USD
• Effective Rate: 25.8%

United Kingdom (Single)

• Gross: £120,000 GBP (~$150,000 USD)
• Income Tax: £35,486
• National Insurance: £5,772
• Total Deductions: £41,258
• Net: £78,742 GBP (~$98,428 USD)
• Effective Rate: 34.4%

Canada (Single, Ontario)

• Gross: $200,000 CAD (~$150,000 USD)
• Federal Tax: ~$42,000
• Provincial Tax: ~$18,000
• CPP: ~$3,800 (capped)
• EI: ~$1,050 (capped)
• Total Deductions: ~$64,850
• Net: ~$135,150 CAD (~$101,363 USD)
• Effective Rate: 32.4%

Winner for $150,000: United States (Texas) - significantly lower taxes, especially in no-tax states.

Detailed Tax System Comparison

Tax-Free Thresholds

United States:

• Standard Deduction: $15,000 (single), $30,000 (married)
• First $15,000-$30,000 is effectively tax-free

United Kingdom:

• Personal Allowance: £12,570 (~$15,700)
• First £12,570 is completely tax-free
• Reduces by £1 for every £2 earned above £100,000

Canada:

• Basic Personal Amount: ~$15,000 CAD (~$11,250 USD)
• Varies slightly by province
• First ~$15,000 is effectively tax-free

Winner: United States (married) - highest tax-free threshold at $30,000.

Progressive Tax Brackets

United States (Federal):

• 10%: $0-$11,925
• 12%: $11,925-$48,475
• 22%: $48,475-$103,350
• 24%: $103,350-$197,300
• 32%: $197,300-$250,525
• 35%: $250,525-$626,350
• 37%: Above $626,350

United Kingdom:

• 20%: £12,571-£50,270
• 40%: £50,271-£125,140
• 45%: Above £125,140

Canada (Federal):

• 15%: $0-$55,867
• 20.5%: $55,867-$111,735
• 26%: $111,735-$173,205
• 29%: $173,205-$246,752
• 33%: Above $246,752

Key Difference: UK has fewer brackets but higher rates. US has more brackets with lower top rate (but state taxes add significantly).

Additional Payroll Taxes

United States:

• Social Security: 6.2% on first $168,600
• Medicare: 1.45% on all income
• Additional Medicare: 0.9% above $200,000
• Total FICA: 7.65% (or 8.55% for high earners)

United Kingdom:

• National Insurance: 12% on £12,570-£50,270, 2% above
• Effective Rate: ~9-10% for most earners

Canada:

• CPP: 5.95% on $3,500-$68,500
• EI: 1.66% on first $63,100
• Total: ~7.6% for most earners

Winner: Depends on income level. US FICA is capped, UK NI has a lower rate above threshold, Canada CPP/EI are both capped.

State/Provincial Tax Comparison

United States: Massive Variation

• No Tax States: 9 states (Texas, Florida, Nevada, etc.)
• Low Tax States: Pennsylvania (3.07%), Indiana (3.1%)
• High Tax States: California (up to 13.3%), New York (up to 10.9%)
• Range: 0% to 13.3%

United Kingdom: Unified System

• No Regional Variation: Same rates across England, Scotland, Wales, Northern Ireland
• Scotland: Slightly different brackets (not covered in detail here)
• Range: N/A (unified)

Canada: Moderate Variation

• Low Tax Provinces: Alberta (10% flat), British Columbia (progressive, lower rates)
• High Tax Provinces: Quebec (up to 25.75%), Nova Scotia (up to 21%)
• Range: ~10% to ~26% (combined federal + provincial)

Winner: United States (if in no-tax state), otherwise Canada has more moderate variation.

Real-World Examples by Income Level

Example 1: Entry-Level ($50,000)

US (Texas):

• Net: ~$41,000
• Effective Rate: 18%

UK:

• Net: ~£38,000 (~$47,500)
• Effective Rate: 24%

Canada (Ontario):

• Net: ~$38,000 CAD (~$28,500 USD)
• Effective Rate: 24%

Winner: United States (Texas) - significantly better for entry-level.

Example 2: Mid-Career ($100,000)

US (California):

• Net: ~$67,650
• Effective Rate: 32.4%

UK:

• Net: ~£65,000 (~$81,250)
• Effective Rate: 35%

Canada (Ontario):

• Net: ~$70,000 CAD (~$52,500 USD)
• Effective Rate: 30%

Winner: United States (if in low-tax state), otherwise Canada.

Example 3: Senior Professional ($200,000)

US (Texas):

• Net: ~$138,400
• Effective Rate: 30.8%

UK:

• Net: ~£115,000 (~$143,750)
• Effective Rate: 42.5%

Canada (Ontario):

• Net: ~$135,000 CAD (~$101,250 USD)
• Effective Rate: 32.5%

Winner: United States (Texas) - significantly better for high earners.

Edge Cases and Special Situations

Married Couples

United States:

• Married filing jointly: $30,000 standard deduction, wider brackets
• Benefit: Significant tax savings for married couples

United Kingdom:

• Marriage allowance: Can transfer £1,260 of personal allowance to spouse
• Benefit: Modest savings (~£250/year)

Canada:

• Spousal amount credit available
• Benefit: Moderate savings

Winner: United States - best benefits for married couples.

High Earners ($300,000+)

United States:

• Top federal rate: 37%
• State taxes: 0-13%+
• Total: 37-50%+ effective rate

United Kingdom:

• Top rate: 45%
• NI: 2% above threshold
• Total: ~47% effective rate

Canada:

• Top federal rate: 33%
• Provincial: 10-26%
• Total: 43-59% effective rate

Winner: United States (in no-tax or low-tax state) - best for ultra-high earners.

Self-Employment

United States:

• Self-employment tax: 15.3% (both employer and employee FICA)
• Can deduct business expenses
• Challenge: Higher tax burden

United Kingdom:

• Class 2 and Class 4 NI contributions
• Can deduct business expenses
• Challenge: Complex NI calculations

Canada:

• Must pay both employer and employee CPP
• Can deduct business expenses
• Challenge: Higher CPP contributions

Winner: Depends on specific situation, but all three have significant self-employment tax burdens.

Cost of Living Considerations

Taxes are only part of the picture. Consider total cost of living:

United States

• Housing: Varies dramatically ($200k-$2M+)
• Healthcare: Employer-provided or private insurance
• Education: Public (free) or private ($10k-$50k+/year)
• Overall: Highly variable by location

United Kingdom

• Housing: High in London, moderate elsewhere
• Healthcare: NHS (free at point of use)
• Education: Public (free) or private (£10k-£30k+/year)
• Overall: High in London, moderate elsewhere

Canada

• Housing: High in major cities, moderate elsewhere
• Healthcare: Public (free, but wait times)
• Education: Public (free) or private ($10k-$30k+/year)
• Overall: High in major cities, moderate elsewhere

Key Insight: Lower taxes don't always mean more disposable income. Factor in cost of living, especially housing and healthcare.

Retirement and Pension Systems

United States

• Social Security: Government pension (based on contributions)
• 401(k)/IRA: Private retirement accounts (tax-advantaged)
• Employer Match: Common (3-6% of salary)
• Retirement Age: 67 for full Social Security

United Kingdom

• State Pension: Government pension (based on NI contributions)
• Workplace Pension: Auto-enrollment (employee 5%, employer 3%)
• Private Pension: SIPP (Self-Invested Personal Pension)
• Retirement Age: 66-67 (increasing)

Canada

• CPP/QPP: Government pension (based on contributions)
• OAS: Old Age Security (universal, income-tested)
• RRSP: Registered Retirement Savings Plan (tax-advantaged)
• Employer Pension: Common (defined benefit or contribution)
• Retirement Age: 65 for full CPP

Winner: Depends on preferences. US has more flexibility, UK/Canada have more guaranteed income.

Healthcare Costs

United States

• Employer-Provided: Common, but employee pays portion
• Cost: $5,000-$15,000+/year for family coverage
• Out-of-Pocket: Deductibles, copays, coinsurance
• Challenge: High costs, especially without employer coverage

United Kingdom

• NHS: Free at point of use (funded by taxes)
• Private Insurance: Optional (~£1,000-£3,000/year)
• Cost: Included in taxes (no additional premium for basic care)
• Benefit: Universal coverage

Canada

• Public Healthcare: Free at point of use (funded by taxes)
• Private Insurance: For extras (dental, vision, prescriptions)
• Cost: Included in taxes (no additional premium for basic care)
• Benefit: Universal coverage

Winner: UK and Canada - universal healthcare is a significant benefit, especially for families.

Making the Decision: Key Factors

Choose United States If:

• You're a high earner ($150,000+)
• You can live in a no-tax state (Texas, Florida, etc.)
• You value flexibility and lower overall tax burden
• You have good employer healthcare coverage
• You're comfortable with higher healthcare costs

Choose United Kingdom If:

• You value universal healthcare
• You prefer a simpler tax system
• You're in the middle-income range (£40,000-£80,000)
• You value strong worker protections
• You want guaranteed pension benefits

Choose Canada If:

• You value universal healthcare
• You're in the middle-income range ($60,000-$120,000 CAD)
• You prefer moderate tax rates
• You value strong social safety net
• You want guaranteed pension benefits

Tools for Comparison

1. Our Calculators:

• US Salary Calculator
• UK Salary Calculator
• Canada Salary Calculator

1. Cost of Living Calculators: Numbeo, Expatistan

1. Currency Converters: Use current exchange rates for accurate comparisons

1. Tax Professionals: Consult with experts in each country

Conclusion

The "best" country for take-home pay depends on your income level, location within the country, family situation, and priorities. Key takeaways:

• United States: Best for high earners in no-tax states, but healthcare costs are significant
• United Kingdom: Best for middle-income earners who value universal healthcare
• Canada: Best for middle-income earners who want moderate taxes and universal healthcare

For $75,000 salary: Differences are minimal (~$1,000-$3,000 annually)

For $150,000+ salary: United States (in no-tax state) can save $10,000-$20,000+ annually

Overall: Consider total compensation (salary + benefits + healthcare + retirement), not just take-home pay. The country with the highest net salary might not be the best choice if healthcare costs are $15,000/year higher.

Use our country-specific calculators to model your exact situation and make an informed decision.