This annual publication provides details of taxes paid on wages in all thirty-four member countries of the OECD.Previous editions were published under the title The Tax/Benefit Position of Employees (1996-1998 editions) and The Tax/Benefit Position of Production Workers (editions published before 1996). 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 2012, but more slowly than in 2011, rising by 0.1 percentage points to an average 35.6%. 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 Annex A.

The statutory progressivity of the income taxes paid by wage earners, net of the standard cash benefits they receive, depend on the design and interaction of personal income taxes, social security contributions (SSCs) and cash benefits. In order to capture their combined impact, this paper presents statutory tax progressivity indicators for the 34 OECD member countries on the basis of average effective income tax rates and tax wedges which are calculated using the OECD’s Taxing Wages framework. The analysis shows a decreasing pattern of tax progressivity across income levels. In some countries, the tax system becomes regressive when the SSC ceiling has been reached. Also, child benefits increase progressivity (especially at low income levels) and their effect is larger than the flattening impact of SSCs, except at top income levels. Reductions in SSCs targeted at low-incomes and dependant spouse allowances increase progressivity in some OECD countries. Income-splitting systems typically have the opposite effect. This paper was first published under the title: D. Paturot, K. Mellbye and B. Brys (2013), “Average Personal Income Tax Rate and Tax Wedge Progression in OECD Countries”, OECD Taxation Working Papers, No. 15, OECD Publishing, doi:http://dx.doi.org/10.1787/5k4c0vhzsq8v-en.

This Section presents detailed results of the evolution of the tax burden between 2000 and 2012. It provides information for each of the 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 over this period.