This annual publication provides details of taxes paid on wages in all 35 member countries of the OECD.1 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 Report shows the amounts of taxes, social security contributions, payroll taxes and cash benefits for eight family-types, which differ by income level and household composition. It also presents the resulting average and marginal tax rates. Average tax rates show that part of gross wage earnings or total labour costs which are taken in personal income taxes (before and after cash benefits), social security contributions and payroll taxes. Marginal tax rates show the part of an increase of gross earnings or total labour costs that is paid in these levies.

The focus of the Report is the presentation of new data on the tax/benefit position of employees in 2016. In addition, the new data is compared with corresponding data for the year 2015. The average worker is designated as a full-time employee (including manual and non-manual) in either industry sectors B-N inclusive with reference to the International Standard Industrial Classification of All Economic Activities, Revision 4 (ISIC Rev.4) or industry sectors C-K inclusive with reference to the International Standard Industrial Classification of All Economic Activities, Revision 3 (ISIC Rev.3).

The Report is structured as follows:

  • Chapter 1 contains an overview of the main results for 2016.

  • Chapter 2 contains the Special Feature on “Taxation and Skills”.

  • Part I (International Comparisons) reviews the main results for 2015 and 2016 and is divided into 3 chapters (Nos. 3 to 5). Chapter 3 reviews the main results for 2016, which are summarised in comparative tables and figures included at the end of that section. Chapter 4 presents a graphical exposition of the estimated tax burden on labour income in 2016 for gross wage earnings between 50% and 250% of the average wage. Then Chapter 5 reviews the main results for 2015, which are summarised in the comparative tables at the end of the chapter and compares them with the 2016 figures.

  • Part II (Chapter 6) focuses on the historical trends in the tax burden for the period 2000-16.

  • Part III contains individual country tables specifying the wage levels considered and the associated tax burdens for eight separate family types, together with descriptions of each tax/benefit system.

  • The Annex describes the methodology and its limitations.

The Report has been prepared under the auspices of the Working Party on Tax Policy Analysis and Tax Statistics of the Committee on Fiscal Affairs. This document has been produced with the financial assistance of the European Union Programme for Employment and Social Innovation “EaSI” (2014-20). The views expressed herein can in no way be taken to reflect the official opinion of the European Union.

← 1. Previous editions were published under the title The Tax/Benefit Position of Employees (1996-98 editions) and The Tax/Benefit Position of Production Workers (editions published before 1996).