Where is the Work Taxed the Most?

April 15, 2016
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Excel Sheet

Belgium taxes the work the most within the OECD countries, according to the organization’s new Taxing Wages 2016 report. A childless, single worker earning the average national wage in Belgium has an average tax wedge of over 55%! At the other end of the scale, average earners in Chile pay just 7% tax.

The tax wedge refers to personal income tax, employer and employee social security contributions, minus family benefits received as a proportion of total employer labour costs.

Across the OECD, the tax wedge on the average worker was 35.9% in 2015 – the same as the year before.

The percentage of labour costs paid in income tax varies considerably within OECD countries. The lowest figures are in Chile (zero) and Korea (4.9%). The highest values are in Denmark (35.8%), with Australia, Belgium and Iceland all over 20%.

The percentage of labour costs paid in employee social security contributions also varies widely ranging from zero in Australia, Denmark and New Zealand to 17.2% in Germany and 19.0% in Slovenia.

Employers in France pay 27.5% of total labour costs in social security contributions, the highest amongst OECD countries.