Taxing Wages Earlier 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). is an annual publication that provides details of taxes paid on wages in the 38 member countries of the OECD. 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 family benefits impact on net household incomes. The results also allow quantitative cross-country comparisons of labour costs and of the overall tax and benefit position of different household types.

Effective tax rates on labour income edged up across the OECD in 2023 while inflation remained above historic levels. With tax systems in many OECD countries not fully adjusting to inflation, the average tax wedge The tax wedge is the primary indicator presented in this Report. It measures the difference between the labour costs to the employer and the corresponding net take-home pay of the employee. It is calculated as the sum of the total personal income tax and social security contributions paid by employees and employers, minus cash benefits received, as a proportion of the total labour costs for employers. for all eight household types covered in this Report increased in a majority of countries between 2022 and 2023, driven in most cases by higher income taxes. For the second consecutive year, post-tax incomes at the average wage level declined across a majority of OECD countries.

The personal circumstances of taxpayers vary greatly. This Report adopts a specific methodology to produce comparative statistics covering taxes, benefits and labour costs across OECD member countries. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. The framework of the methodology is as follows: