In a progressive tax system, income is divided into brackets each taxed at an increasing rate. Only income within each bracket is taxed at that bracket's rate — not the total income.

A marginal rate of 45% does not mean you pay 45% of everything earned, only 45% of the portion above the relevant threshold. Most EU countries use progressive income tax.

Notable exceptions: Czech Republic (flat 15%/23%) and Estonia (flat 20%). Progressive systems are generally considered more equitable as effective rates rise gradually with income.