Taxing Wages 2024
Tax and Gender through the Lens of the Second Earner
This annual publication provides details of taxes paid on wages in OECD countries. This year’s edition focuses on fiscal incentives for second earners in the OECD and how tax policy might contribute to gender gaps in labour market outcomes. For the year 2023, the report also examines personal income taxes and social security contributions paid by employees, social security contributions and payroll taxes paid by employers, and cash benefits received by workers. It illustrates how these taxes and benefits are calculated in each member country and examines how they impact 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 average and marginal effective tax rates on labour costs for eight different household types, which vary by income level and household composition (single persons, single parents, one or two earner couples with or without children). The average tax rates measure the part of gross wage earnings or labour costs taken in tax and social security contributions, both before and after cash benefits, and the marginal tax rates the part of a small increase of gross earnings or labour costs that is paid in these levies.
Also available in: French
Executive Summary
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.
Also available in: French