Irish employees carry the lightest direct tax burden in Europe, according to the latest employee remuneration survey carried out by Deloitte.

The survey found, on average, employee tax and social insurance costs equated to just 6.4 per cent of Irish employees' total remuneration - the lowest rate in Europe. The tax element was based on a married couple with one earner and two children.

Pat Cullen, tax partner at Deloitte, said this showed "the continued commitment of the Irish Government to keep the tax and social welfare costs down and hence keep the costs of employment down". However the survey confirms that Ireland remains expensive from an employer perspective.

When employer social security costs were calculated as a percentage of total remuneration paid, Ireland lay in fifth position with a rate of 9.71 per cent. Denmark had the lowest level at 1.36 per cent.

Average remuneration costs in Ireland were also relatively high at €36,852 in 2006, up 5.3 per cent from €34,997 the previous year.

Mr Cullen warned that Ireland remained exposed to pressures from Eastern Europe where employment costs were still low. "As those economies gather pace and start to compete more effectively for international mobile investment, Ireland will be at a considerable disadvantage."