Taxing Wages 2025

This Report provides unique information for the 38 OECD countries on the income taxes paid by workers, their social security contributions, the transfers they receive in the form of cash benefits, as well as the social security contributions (SSCs) and payroll taxes paid by their employers. The taxpayer-specific detail in this Report complements the information provided annually in Revenue Statistics, which provides internationally comparable data on tax levels and tax structures in OECD countries.

Part I of the Report presents detailed information about the effective tax rates on labour income in OECD countries in 2024 for eight illustrative household types earning comparable levels of income as well as the implied total labour costs for employers. It also provides detailed analysis of changes in effective tax rates between 2023 and 2024 as well as changes since 2000. Part II provides detailed information on labour taxation systems in OECD countries. The methodology followed in this Report is explained in the Annex. The results for France for 2024 should be interpreted with caution because the indexation of the tax schedule and income tax parameters to inflation (of 1.8%) could not be incorporated into the Taxing Wages models for this Report. This omission, which was due to the late adoption of the 2025 budget bill, results in higher estimated tax rates in 2024 than those that were effectively in force.

This chapter begins with an introduction to the Taxing Wages methodology, which is followed by a review of the indicators of effective tax rates across OECD countries in 2024. The review analyses the tax wedge and the personal average tax rates for a single worker without children who earns the average wage. It also examines the corresponding indicators for a one-earner couple earning the average wage with two children and a two-earner married couple, also with two children, where one spouse earns the average wage and the other 67% thereof. The chapter concludes by analysing changes in nominal and real average wages as well as changes in post-tax income by country in 2024 and by setting out the industry classification on which the wage data is based.

The Taxing Wages methodology focuses on full-time employees. It is assumed that their annual income from employment is equal to a given percentage of the average full-time adult gross wage earnings for each OECD economy, referred to as the average wage (AW). This covers both manual and non-manual workers for either industry sectors C-K inclusive with reference to the International Standard Industrial Classification of All Economic Activities, Revision 3 (ISIC Rev.3) or industry sectors B-N inclusive with reference to the International Standard Industrial Classification of All Economic Activities, Revision 4 (ISIC Rev.4).1 Further details are provided in Table 1.8 as well as in the Annex of this Report. Additional assumptions are made about the personal circumstances of these wage earners in order to determine their tax and benefit position.

In Taxing Wages, the term ‘tax’ includes personal income tax, SSCs and payroll taxes (which are aggregated with employer SSCs in the calculation of tax rates) payable on gross wage earnings. Consequently, any income tax that might be due on non-wage income and other kinds of taxes – such as corporate income tax, net wealth tax and consumption taxes – are not taken into account. The transfers included are those paid by general government as cash benefits, usually in respect of dependent children.

For most OECD countries, the tax year is equivalent to the calendar year, the exceptions being Australia, New Zealand and the United Kingdom. In the case of New Zealand and the United Kingdom, where the tax year starts in April, the calculations apply a ‘forward-looking’ approach. This implies that, for example, the tax rates reported for 2024 are those for the tax year 2024-2025. However, in Australia, where the tax year starts in July, a ‘backward-looking’ approach is adopted to present more reliable results; the year 2024 in respect of Australia is the 2023-2024 tax year.

Taxing Wages presents several measures of taxation on labour. Most emphasis is given to the tax wedge, a measure of the difference between labour costs to the employer and the corresponding net take-home pay of the employee. This indicator is calculated by expressing the sum of personal income tax, employee plus employer SSCs together with any payroll tax, minus benefits as a percentage of labour costs. Employer SSCs and – in some countries – payroll taxes are added to the gross wage earnings of employees in order to determine a measure of total labour costs.

The average tax wedge measures that part of total labour costs which is taken in tax and SSCs net of cash benefits, while the marginal tax wedge measures that part of an increase in total labour costs that is paid in taxes and SSCs less cash benefits. The tax wedge only includes payments that are classified as taxes according to the OECD Interpretative Guide. Employees and employers may also make non-tax compulsory payments (NTCPs)2 that may affect the indicators presented in this Report, such as the tax wedge. An accompanying paper to Taxing Wages presents “compulsory payment indicators” that combine taxes and NTCPs. It is available at: https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/tax-policy/non-tax-compulsory-payments.pdf.

This Report also includes analysis of the personal average tax rate and the net personal average tax rate. The personal average tax rate is the term used when the personal income tax and employee SSCs are expressed as a percentage of gross wage earnings. The net personal average tax rate corresponds to the above measure net of cash benefits. The net personal marginal tax rate shows that part of an increase in gross wage earnings that is paid in personal income tax and employee SSCs net of cash benefits.

Table 1.1 shows that the tax wedge between the labour costs to the employer and the corresponding net take-home pay for single workers without children, at average wage earnings levels, varied widely across OECD countries in 2024 (see column 1). While the tax wedge exceeded 45% of labour costs in Austria, Belgium, France3, Germany and Italy, it was lower than 20% in Chile and Colombia. The largest tax wedge was observed in Belgium (52.6%) and the lowest in Colombia (0.0%). In Colombia, a single worker earning the average wage did not pay personal income taxes in 2024, while their contributions to pension, health and employment risk insurance are considered to be NTCPs4 and therefore not counted as taxes in the Taxing Wages models. Table 1.1 shows that the average tax wedge as a percentage of labour costs in OECD countries was 34.9% in 2024.

Changes in the tax wedge as a percentage of labour costs between 2023 and 2024 for a single worker earning the average wage without children are described in column 2 of Table 1.1. The OECD average tax wedge for this household type increased by 0.05 percentage points (p.p.) in 2024, having increased by 0.15 p.p. in 2023 and by 0.12 p.p. in 2022. Between 2023 and 2024, the tax wedge increased in twenty OECD countries and fell in fifteen while remaining the same in three (Colombia, Costa Rica and Hungary).

Hungary and Latvia are the only OECD countries where there was no change in the thresholds, rates and amounts for personal income tax, SSCs or cash transfers in 2024, implying that changes in the tax wedge were attributable solely to a change in the average wage. In Australia, Korea, Poland, Slovenia and the United Kingdom, there was no change in the rules concerning personal income taxes but there were adjustments to other components of the tax wedge. More in general, policy changes in 2024 (whether reforms or parametric adjustments) affected at least one of the components of the tax wedge in almost all countries. This makes it difficult to ascribe changes in the average tax wedge in a specific country to either a change in policies or in average earnings, especially since some policy rates might be automatically indexed to wage growth (OECD, 2023[1]).

Increases in the tax wedge for a single worker earning the average wage ranged from 0.04 p.p. in the United States to 1.61 p.p. in Italy. The increase in the tax wedge was larger than 0.5 p.p. in eight countries, while only Italy and Slovenia recorded an increase larger than 1 p.p. In Slovenia, a 1.44 p.p. increase in the tax wedge was mainly due to the introduction of a flat-rate compulsory employees’ health insurance contribution of EUR 420 per year in 2024. In Italy, the increase was mainly due to the fact that the average wage earner in 2024 no longer benefited from the reduced employee SSC rate as their salary was above the threshold of EUR 35 000, having been below this threshold in 2023.

In fourteen out of the twenty countries where the tax wedge increased, the rise was driven by higher personal income tax as a percentage of labour costs (see column 3 of Table 1.1). In the countries where the rules concerning the tax schedule did not change, such as Australia, Greece, Korea, Latvia, Mexico, Poland, Slovenia and Spain, this was due to increases in the nominal average wage between 2023 and 2024. Higher average wages increase personal income tax through the progressivity of income tax systems if income tax thresholds increase by less than average earnings (OECD, 2023[1]). In Estonia, the higher personal income tax was due to the removal of certain tax allowances while in Lithuania it was primarily the result of a higher proportion of earnings becoming subject to tax while the value of tax allowances and tax credits fell relative to earnings. Chapter 2 of this Report examines the role of tax reliefs in determining PIT rates in OECD countries.

In Canada, Czechia, Germany, Italy, the Slovak Republic and Slovenia, the increase in the tax wedge was mostly due to higher employee or employer SSCs. In Canada, employee and employer SSCs increased mainly due to the introduction of a second bracket for pension contributions at a rate of 4%. In Czechia, employee SSCs increased due to the re-introduction of sickness insurance. In Germany, the increase in both employee and employer SSCs was mainly due to the increase in the sickness insurance rate. In the Slovak Republic, the employer health contribution is being gradually increased from 10% to 11% between 2024 and 2027 inclusive while the contribution rate to Pillar I of the pension system was increased from 8.5% to 10% in 2024. The causes of the increases in Italy and Slovenia are discussed above.

In ten of the fifteen OECD countries where the tax wedge decreased as a percentage of labour costs, the decrease was mostly derived from lower personal income tax (Austria, Belgium Iceland, Ireland, Luxembourg, Japan, New Zealand, Portugal, Sweden and Switzerland).

The decreases in the tax wedge observed in 2024 exceeded 1 p.p. in Finland (-1.57 p.p.), the United Kingdom (-1.74 p.p.) and Portugal (-1.75 p.p.). In Finland, the decrease in the tax wedge was due to a reduction in employee and employer health-related SSCs. In the United Kingdom, similarly to the case of Finland, the decrease was mainly due to the reduction in employee SSCs, from a rate of 12% to 8%. In Portugal, the main driver of the decrease was a revision of the tax schedule in 2024 that reduced the tax rates applied to the first six brackets.

Table 1.2 and Figure 1.1 show the components of the tax wedge across OECD countries in 2024: personal income tax, employee SSCs and employer SSCs (including payroll taxes where applicable), as a percentage of labour costs for a worker without children earning the average wage. Labour costs in Table 1.2 are expressed in US dollars with equivalent purchasing power.

The percentage of labour costs paid in personal income tax varied considerably across OECD countries in 2024. The lowest figures were in Colombia and Costa Rica (both 0.0%) and Chile (0.2%), with Czechia, Greece, Japan, Korea, Mexico, Poland and the Slovak Republic also below 10%. The highest share was in Denmark (35.4%), with Australia, Belgium, Iceland, Ireland and New Zealand also above 20%. The percentage of labour costs paid in employee SSCs also varied widely, ranging from 0.0% in Australia, Colombia, Denmark and New Zealand to 19.2% in Lithuania and 20.3% in Slovenia. Employers in France5 paid 26.7% of labour costs in SSCs, the highest amongst OECD countries. Employer SSCs accounted for more than 20% of labour costs in nine other countries: Austria, Belgium, Costa Rica, Czechia, Estonia, Italy, the Slovak Republic, Spain and Sweden.

Combined employee and employer SSCs exceeded 20% of labour costs in 23 countries and represented at least one-third of labour costs in Austria, Czechia, France6, Germany, Slovak Republic and Slovenia.

The personal average tax rate is defined as personal income tax plus employee SSCs as a percentage of gross wage earnings. Table 1.3 shows the personal average tax rate in 2024 for a single worker without children at the average wage level, with the average worker’s gross wage earnings expressed in US dollars with equivalent purchasing power. Figure 1.2 provides a graphical representation of the personal average tax rate decomposed between income tax and employee SSCs.

Table 1.3 and Figure 1.2 show that, on average, the personal average tax rate for a single worker at average earnings in OECD countries was 25.0% in 2024. Belgium had the highest rate, at 39.7% of gross wage earnings; Denmark, Germany, Lithuania and Slovenia were the other countries with rates above 35%. The lowest personal average tax rates were in Mexico (12.2%), Costa Rica (10.7%), Chile (7.2%) and Colombia (0.0%). The personal average tax rate was zero for Colombia as the single worker did not pay personal income tax at the average wage level in 2024, as discussed above.7

The impact of taxes and benefits on a worker’s take-home pay varies greatly among OECD countries. Such wide variations in the size and make-up of the tax wedge in different countries partly reflect differences in:

• The overall ratio of aggregate tax revenues to Gross Domestic Product; and

• The share of personal income tax and SSCs in the national tax mix.

In 2024, the share of income tax within the personal average tax rate was higher than the share of employee SSCs for 23 of the 38 OECD member countries. No employee SSCs were levied in Australia, Colombia, Denmark and New Zealand and their level was below 5% of gross earnings in Estonia, Iceland, Ireland and Mexico. In contrast, a single worker at the average wage level paid substantially more in employee SSCs than in personal income tax (i.e., more than six p.p.) in five countries: Chile, Costa Rica, Japan, Poland and Slovenia. In seven countries – Czechia, Greece, Korea, Lithuania, Portugal, the Slovak Republic and Türkiye – the respective shares of personal income tax and employee SSCs as a percentage of gross earnings were very close (i.e., differences smaller than 3 p.p.).

Many OECD countries provide a fiscal benefit to households with children through advantageous tax treatment and/or cash benefits. Table 1.4 compares the tax wedge as a percentage of labour costs for a one-earner married couple with two children with that of a single individual without children, at average wage levels. The tax wedge for the couple with children is generally smaller than that observed for the individual without children: the OECD average tax wedge as a percentage of labour costs for the one-earner married couple with two children was 25.7% in 2024, compared with 34.9% for the single worker. This gap decreased by 0.11 p.p. between 2023 and 2024 due to the fact that the average tax wedge for the one-earner married couple with two children increased slightly more than the tax wedge for the single worker without children between 2023 and 2024.8

The tax savings realised by a one-earner married couple with two children compared with a single worker without children was at least 20% of labour costs in Poland and the Slovak Republic, and it exceeded 15% of labour costs in Belgium and Luxembourg. The tax wedge for a one-earner married couple with two children was the same as for a single worker on the average wage in Costa Rica, Mexico and Türkiye.

The tax wedge of a one-earner married couple with two children increased by 0.16 p.p. on average and rose in 16 countries between 2023 and 2024 (column 4). In 20 countries, there was only a small change (not exceeding plus or minus one percentage point). There were increases of more than one percentage point in seven countries: Czechia, Estonia, Hungary, Italy, Latvia, the Slovak Republic and Slovenia.

In Czechia, the tax wedge of an average one-earner married couple with two children increased by 7.38 p.p. due to the removal of the pre-school tax credit and because the tax credit for a dependent spouse was limited to families with children under the age of three, which meant that the households considered by the Taxing Wages models were no longer eligible.9 In Estonia, the increase (3.72 p.p.) was caused by the cessation of the supplementary basic allowance and the child allowance, which were targeted at families with children. In Hungary, the increase (1.11 p.p.) was due to growth in labour costs while cash transfers remained unchanged in nominal terms. In Italy, the increase (1.53 p.p.) was mainly due to the loss of the reduced employee SSC rate for this household due to their gross earnings exceeding the eligibility threshold. In Latvia, the increase (1.60 p.p.) was partly due to higher employee SSCs. In the Slovak Republic, the tax wedge increased by 2.52 p.p. due to the temporary increase of the employer’s health insurance contribution. In Slovenia, the increase for the one-earner married couple with two children (3.07 p.p.) was mainly due to the introduction of the flat-rate compulsory health SSC of EUR 420 per year.

Decreases of at least one percentage point in the tax wedge of a one-earner married couple receiving the average wage with two children occurred in eight countries: Finland, Iceland, Japan, Korea, the Netherlands, Poland, Portugal and the United Kingdom. In Finland (-1.61 p.p.), the tax wedge decreased due to lower employee and employer SSCs, in Iceland (-1.48 p.p.), the decrease was due to an increase in the supplementary child allowance and in Japan (-2.20 p.p.) it was due to the introduction of special tax credits for central and local taxes. In Korea (-1.72 p.p.), the decrease was due to a reform of the refundable child tax credit, which became more generous for lower-earning households with two children. In the Netherlands (-1.11 p.p.), it was due to an increase in the child-related cash transfers while in Poland (-4.03 p.p.) it was due to an increase of cash transfers provided via the Family 500 Plus programme. In Portugal (-2.36 p.p.), it decreased due to the lower tax rates applied to the first six brackets of the tax schedule as well as an increase in the generosity of the child-related cash transfer. In the United Kingdom, the decrease (-1.35 p.p.) was driven by a reduction in employee SSCs, from 12% to 8%.

A comparison of changes in the tax wedge between 2023 and 2024 for one-earner married couples with two children and single persons without children, at the average wage level, is shown in column 6 of Table 1.4. The fiscal preference for families increased in seventeen of the 38 OECD countries: Australia, Belgium, Colombia, Denmark, Finland, France10, Greece, Iceland, Italy, Japan, Korea, Lithuania, the Netherlands, New Zealand, Norway, Poland and Portugal.

Figure 1.3 compares the net personal average tax rate for a single worker earning the average wage with that of a one-earner married couple with two children at the same income level. Due to tax reliefs and cash benefits for families with children, the one-earner married couple’s disposable income exceeded that of the single worker by more than 20% of earnings in the Slovak Republic (31.2%), Poland (26.6%) and Luxembourg (22.5%); and by more than 15% in Belgium (19.8%), Austria (18.2%), Germany (17.6%), Italy (15.4%) and Portugal (15.2%). The disposable income of the one-earner married couple exceeded that of the single worker by less than 10% of earnings in 15 countries: Hungary (9.7%), Denmark (9.4%), the Netherlands (8.9%), Estonia (8.0%), Japan (8.0%), Australia (7.2%), Sweden (5.9%), Spain (5.9%), Israel (5.3%), Norway (4.7%), Chile (4.6%), Finland (4.5%) Colombia (4.4%), the United Kingdom (4.32%) and Greece (2.4%). The disposable income was the same for both household types in Costa Rica, Mexico and Türkiye, as in each country their net personal average tax rates were identical.

The preceding sections focused on two households with comparable levels of income: the single worker at 100% of the average wage and the married couple with one earner at 100% of the average wage, with two children. This section extends the analysis to examine the tax wedge and personal average tax rate for a third household type: the two-earner married couple, earning 100% and 67% of the average wage respectively, with two children.

For this household type, the OECD average tax wedge as a percentage of labour costs was 29.5% in 2024 (Figure 1.4 and Table 1.5). Belgium had a tax wedge of 44.8%, which was the highest among OECD countries for this household type. The other countries with a tax wedge exceeding 40% were France11 and Germany (41.0% and 40.9%, respectively). The lowest tax wedge for this household type was observed in Colombia (-5.2%). In Colombia, the tax wedge was negative because this household type did not pay income taxes at that level of earnings (although it paid contributions that are not considered to be taxes) and received cash benefits that were paid on top of their wages. The other countries where the tax wedge for this household type was below 20% were New Zealand (18.6%), Korea (18.3%), Switzerland (17.1%), Israel (15.6%) and Chile (4.4%).

Figure 1.4 shows the average tax wedge and its components as a percentage of labour costs for the two-earner married couple in 2024. On average across OECD countries, income tax represented 10.6% of labour costs and the sum of the employee and employer SSCs represented 21.4%. The OECD tax wedge is net of cash benefits, which represented 2.5% of labour costs in 2024. The cash benefits that are included in the Taxing Wages models are those universally paid to workers in respect of dependent children between the ages of six to eleven inclusive. In-work benefits that are paid to workers regardless of their family situation are also included in the calculations.

The OECD average tax wedge of the two-earner married couple increased by 0.01 p.p. in 2024 from the previous year, as indicated in Table 1.5 (column 2). For this household type, the tax wedge increased in 17 countries and decreased in 20. The increase exceeded one percentage point in six countries: Türkiye (1.10 p.p.), Latvia (1.34 p.p.), Estonia (1.78 p.p.), the Slovak Republic (1.91 p.p.), Slovenia (1.96 p.p.) and Czechia (2.43 p.p.). In Türkiye, the tax wedge increased due to the progressivity of the tax schedule, as the average wage increased by a larger proportion than the earnings thresholds in the tax schedule. Similarly, in Latvia, the increase was mostly due to the fact that the tax schedule did not change between 2023 and 2024. In Estonia, the tax wedge increased primarily due to the elimination of the supplementary basic allowance and the child allowance, as mentioned above. In the Slovak Republic, the increase was mainly due to higher employer SSCs while cash transfers did not change. In Slovenia, the average tax wedge increased due to the introduction of a flat-rate compulsory health SSC, as mentioned above. In Czechia, the increase was primarily due to the removal of the pre-school tax credit.

Among the countries where the tax wedge rose for two-earner married couples with children in 2024, the increase in income tax as a percentage of labour costs accounted for most of the increase in twelve: Australia, Czechia, Estonia, France12, Germany, Hungary, Korea, Latvia, Mexico, Spain, Türkiye and the United States. Meanwhile, an increase in SSCs was the main factor behind the higher tax wedge for this household type in four countries: Canada, Italy, the Slovak Republic and Slovenia. In Ireland, the increase (0.16 p.p.) was driven by a decrease in the cash transfers received by this household.

In most countries where the tax wedge for families with children decreased between 2023 and 2024, this resulted from changes in income tax systems and SSCs, as observed for the single workers, as well as from increased cash benefits or tax provisions for dependent children. Decreases of more than one percentage point were observed in six countries: Japan (-1.27 p.p.), Portugal (-1.28 p.p.), Iceland (1.54 p.p.), Finland (-1.66 p.p.), the United Kingdom (-1.66 p.p.) and Poland (-2.39 p.p.). As observed in previous sections, the decrease in the tax wedge resulted from a reduction of SSCs in Finland and the United Kingdom, an increase in tax reliefs for families in Iceland and Japan, an increase in cash benefits in Poland and a reduction of tax rates in Portugal.

The net personal average tax rate for a two-earner married couple with two children where one spouse earns the average wage and the other earns 67% thereof, was 18.6% of gross wage earnings on average in 2024. Table 1.6 shows the net personal average tax rate for each OECD country and its components as a percentage of gross wage earnings. Household gross wage earnings in column 5 are expressed in US dollar terms with equivalent purchasing power. Unlike the results shown in Table 1.3, cash benefits are taken into account in Table 1.6 and reduce the impact of income taxes and employee SSCs (column 2 plus column 3, minus column 4).

The net personal average tax rate of the two-earner married couple varied greatly among OECD countries in 2024, ranging from -5.2% in Colombia to 31.1% in Denmark. In Colombia, the net personal average tax rate was negative because this household type did not pay income taxes at that level of earnings, paid contributions that are not considered to be taxes13 and received cash benefits that were paid on top of their wages. The disposable income of the household after tax represented 105.2% of the couple’s gross wage earnings in Colombia while it represented 68.9% in Denmark. The net personal average tax rate was equal to or lower than 10% in Poland (9.6%), Korea (9.2%), the Slovak Republic (7.4%) and Chile (4.4%).

The Taxing Wages indicators focus on the structure of labour taxation. To assess the overall impact of the government sector on people’s welfare, other factors including indirect taxes (such as value added tax) should also be taken into account, as should taxation of other forms of income, such as capital income (Hourani et al., 2023[4]). NTCPs are not included in the calculations presented in this Report but further analysis of those payments is presented in the accompanying online paper: https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/tax-policy/non-tax-compulsory-payments.pdf.

The average wage increased in 37 OECD countries between 2023 and 2024 in nominal terms, and it increased in 33 of the 38 countries in real terms. The real post-tax income for a single worker earning the average wage increased in 28 countries in real terms over the same period, having declined in 21 countries in 2023 and in 33 countries in 2022.

Table 1.7 shows gross wage earnings in national currency of the average worker across OECD countries in 2023 and 2024. The figures for 2024 are estimated by the OECD Secretariat by applying the change in the compensation per employee in the total economy as presented in the OECD Economic Outlook Volume 2024 Issue 2 database (OECD, 2024[2]) to the final average wage values provided for previous years by OECD countries. More information on the value of the average wage and the estimation methodology is included in the Annex of this Report.

The annual change in gross nominal wages in 2024 – shown in column 3 – ranged from -0.03% in Finland to 82.9% in Türkiye. To a large extent, changes in nominal wage levels in OECD countries were higher than inflation rates (see column 4 of Table 1.7). The annual change in real wage levels (before personal income tax and employee SSCs) was within the range of -2% to +2% in 19 countries (see column 5 of Table 1.7). The real wage decreased the most in Belgium (-1.02%), while real wages increased by more than 2% in 19 countries.

By combining changes in the average wage in 2024 with the changes in the net personal average tax rate discussed earlier in this chapter, it is possible to calculate changes in workers’ post-tax real income between 2023 and 2024. However, it should be noted that this indicator provides only a partial view of changes in workers’ overall disposable income because it does not take into account government policies that do not meet the criteria for inclusion in the Taxing Wages models. These government policies may nonetheless have a significant impact on workers’ disposable income, thereby offsetting declines in real wages. Such ‘non-standard’ measures are typically linked to consumer spending and may include policies to reduce the cost of staple goods or to lower the cost of health and education. Further information on the benefits included in the Taxing Wages models is provided in Annex A, while country-specific information can be found in the country chapters located in Part II of the Report.

In ten OECD countries, the average single worker without children had lower real post-tax income in 2024 than in 2023, either because the personal average tax rate (column 6) increased or remained unchanged while the real wage before tax decreased (column 5), or because the personal average tax rate increased by more than the real wage before tax.

In contrast, the average single worker without children had higher real post-tax income in 2024 in 28 countries: Austria, Canada, Chile, Colombia, Costa Rica, Denmark, Finland, Germany, Hungary, Iceland, Ireland, Israel, Japan, Latvia, Lithuania, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Sweden, Switzerland, Türkiye, the United Kingdom and the United States.

• The real wage before tax decreased by less than the personal average tax rate in Finland, Iceland and Luxembourg.

• The personal average tax rate decreased or remained unchanged while the real wage before tax increased in Austria, Colombia, Costa Rica, Hungary, Ireland, Israel, the Netherlands, New Zealand, Norway, Portugal, the Slovak Republic, Sweden, Switzerland and the United Kingdom.

• The personal average tax rate increased by less than the real wage before tax in Canada, Chile, Denmark, Germany, Latvia, Lithuania, Poland, Slovenia, Türkiye and the United States.

When comparing wage levels, it is important to note that the definition of average wage earnings may vary between countries due to data limitations. For instance, some countries do not include the wages earned by supervisory and managerial workers or do not exclude the wage earnings of part-time workers (see Table A.4 in the Annex).

Table 1.8 provides more information on whether average wages for the years 2000 to 2024 are based on industry sectors C-K inclusive with reference to the International Standard Industrial Classification of All Economic Activities, Revision 3 (ISIC Rev.3), industry sectors B-N inclusive with reference to the International Standard Industrial Classification of All Economic Activities, Revision 4 (ISIC Rev.4), or on alternative classification systems where countries are not able to provide data in line with the two previously mentioned approaches.14

[4] Hourani, D. et al. (2023), “The taxation of labour vs. capital income: A focus on high earners”, OECD Taxation Working Papers, No. 65, OECD Publishing, Paris, https://doi.org/10.1787/04f8d936-en.

[2] OECD (2024), OECD Economic Outlook, Volume 2024 Issue 2, OECD Publishing, Paris, https://doi.org/10.1787/d8814e8b-en.

[5] OECD (2024), Taxing Wages 2024: Tax and Gender through the Lens of the Second Earner, OECD Publishing, Paris, https://doi.org/10.1787/dbcbac85-en.

[3] OECD (2023), OECD Economic Outlook, Volume 2023 Issue 2, OECD Publishing, Paris, https://doi.org/10.1787/7a5f73ce-en.

[1] OECD (2023), Taxing Wages 2023: Indexation of Labour Taxation and Benefits in OECD Countries, OECD Publishing, Paris, https://doi.org/10.1787/8c99fa4d-en.