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• Basic Methodology and Main Results
  This section briefly introduces the methodology employed for this Report, which focuses on employees. It is assumed that their annual income from employment is equal to a given fraction of the average gross wage earnings of adult, full-time both manual and non-manual workers covering industry Sectors C-K inclusive with reference to the International Standard Industrial Classification of All Economic Activities, Revision 3 (ISIC Rev. 3)1 of each OECD economy, also referred to as the average wage. Additional assumptions are made regarding other relevant personal circumstances of these wage earners to enable their tax/benefit position to be determined. The taxes included in the present Report are confined to personal income tax, social security contributions and payroll taxes (which, in this Report, are aggregated with employers’ social contributions in the calculation of tax rates), payable on gross wage earnings. Consequently, any income tax that might be due on non-wage income, as well as all other kinds of taxes – e.g. corporate income tax, net wealth tax and consumption taxes – are not taken into account in this Report. The benefits included are those paid by general government as cash transfers, usually in respect of dependent children.
• Special Feature: Part-time Work and Taxing Wages
  In the tax calculations presently used in Taxing Wages, it is generally assumed that all employees are working full-time irrespective of their level of earnings. Section 2 shows that this is an unrealistic assumption in the two household types presented in Taxing Wages where the second earner has an income of 33 per cent of average earnings. In fact, this income level is below the equivalent minimum wage for full-time employees in most of the OECD countries having such provisions.
• Tax Burdens, 2005 (Tables)
• Tax Burdens, 2004 (Tables)
• Tax Burdens, 2005 (Charts)
• Tax Burden Trends, 2000-2005
• Country Details, 2005
• Methodology
  The personal circumstances of taxpayers vary greatly. To identify representative taxpayers and to calculate the amount of their taxes, this Report uses a specific methodology. The focus is on employees. It is assumed that their annual income from employment is equal to a given fraction of the average gross wage earnings of adult, fulltime workers in a broad range of industry sectors of each OECD economy. Additional assumptions are made regarding other relevant personal circumstances of these wage earners to enable their tax/benefit position to be determined. Table V.1 sets out the terminology used in this Report, while Table V.2 provides information on the industry sectors covered.
• Limitations
  The simple approach of comparing the tax/benefit position of example families avoids many of the conceptual and definitional problems involved in more complex international comparisons of tax burdens and transfer programmes. However, a drawback of this methodology is that the earnings of an average worker will usually occupy a different position in the overall income distribution in different economies, although the earnings relate to workers in similar jobs in various OECD member countries.
• A Note on the Tax Equations
  Each country chapter contains a section that describes the of equations in a standard format which show the calculations required to derive the amounts of income tax, social security contributions and cash transfers. These algorithms represent in algebraic form the legal provisions described in the chapter and are consistent with the figures shown in the country and comparative tables. This section describes the conventions used in the definition of the equations and how they could be used by those wishing to implement the equations for their own research.
• Annexes
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