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Taxes on labour income: Belgium, Germany, Hungary and France highest

Apr 12, 2017 | News

(11 April 2017) – Taxes on labour income for the average worker across the OECD continued to decrease for the third consecutive year during 2016, dropping to 36% of labour costs, according to a new OECD report.


Taxing Wages 2017 measures the level of personal income tax and social security contributions in each OECD country by calculating the ‘tax wedge’ – the total taxes on labour income paid by employees and employers, minus family benefits received, as a percentage of the labour costs of the employer. The tax wedge is calculated for a range of different family types and at different income levels.

The tax wedge on the income of the average worker decreased slightly, to 36%, in 2016. Last year’s decline follows a multi-year trend, partially reversing tax wedge increases reported in the years immediately following the global economic crisis.

In 2016, the highest average tax wedges for childless single workers earning the average national wage were in Belgium (54.0%), Germany (49.4%), Hungary (48.2%) and France (48.1%). The lowest were in Chile (7%), New Zealand (17.9%) and Mexico (20.1%).

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