This annual publication provides details of taxes paid on wages in all thirty-four member countries of the OECD.* The information contained in the Report covers the personal income tax and social security contributions paid by employees, the social security contributions and payroll taxes paid by their employers and cash benefits received by families. The objective of the Report is to illustrate how personal income taxes, social security contributions and payroll taxes are calculated and to examine how these levies and cash family benefits impact on net household incomes. The results also allow quantitative cross-country comparisons of labour cost levels and of the overall tax and benefit position of single persons and families.

The tax burden on wages continued to rise in OECD countries in 2013 by 0.2 percentage points to an average 35.9%. The rate of increase was higher than in 2012 but slower than in 2011. The tax burden or tax wedge is measured by taking the total taxes and social security contributions paid by employees and employers, minus family benefits received as a proportion of the total labour costs for employers. This makes it possible to examine how these levies and cash benefits affect net household income.

This Report provides unique information for each of the thirty four OECD countries on the income taxes paid by workers, their social security contributions, the family benefits they receive in the form of cash transfers as well as the social security contributions and payroll taxes paid by their employers. Results reported include the marginal and average tax burden for one- and two-earner households, and the implied total labour costs for employers. These data are widely used in academic research and in the formulation and evaluation of social and economic policies. The taxpayer specific detail in this Report enables it to complement the information provided annually in the Revenue Statistics, a publication providing internationally comparative data on tax levels and tax structures in OECD countries. The methodology followed in this Report is described briefly in the introduction section below and in more detail in the Annex. The tables and charts present estimates of tax burdens and of the tax “wedge” between labour costs and net take-home pay for eight illustrative family types on comparable levels of income. The key results for 2013 are summarised in Section 2 below. Part I of the Report presents more detailed results for 2013, together with definitive results for 2012 and discusses the changes between the two years. Part II of the Report reviews historical changes in tax burdens between 2000 and 2013.

This Special Feature analyses the changes in the progressivity of taxes on wage earnings in OECD countries over the 2000-12 period. This chapter also studies changes in progressivity over the 2000-07 and the 2007-12 periods, and whether changes in personal income taxes, benefits or social security contributions have been the drivers of these changes.

The personal circumstances of taxpayers vary greatly. This Report therefore adopts a specific methodology to produce comparative statistics covering taxes, benefits and labour costs across OECD member countries. The framework of the methodology is as follows: