Taxing Wages 2015

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Taxing Wages provides unique information on the taxes paid on wages in OECD countries. It covers personal income taxes and social security contributions paid by employees; social security contributions and payroll taxes paid by employers and cash benefits paid by in-work families. The purpose is to illustrate how these taxes and benefits are calculated in each member country and to examine how they impact on household incomes. The results also enable quantitative cross-country comparisons of labour cost levels and the overall tax and benefit position of single persons and families on different levels of earnings.

The publication shows this information for eight household types which vary by income level and household composition and the results reported include the marginal and average tax burdens for one and two earner families and the total labour costs of employers. These data are widely used in academic research and in the preparation and evaluation of social and economic policy making.

Taxing Wages 2015 includes a special feature entitled: ‘Modelling the tax burden on labour income in Brazil, China, India, Indonesia and South Africa.'

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Executive summary

The tax burden on wages continued to rise in OECD countries in 2014 by 0.1 percentage point to an average of 36.0%. The rate of increase was lower than in 2013 and has slowed since a significant increase 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 measure provides an analysis of how these levies and cash benefits combine together to impact on net household income.

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