The tax burden on labor grows in most OECD countries | Economy

A man works on a construction site, on February 10, 2022, in Madrid (Spain).
A man works on a construction site, on February 10, 2022, in Madrid (Spain).Eduardo Parra (Europa Press)

The covid has stopped hitting so hard and has led governments to reduce the stimuli designed to protect income and companies in the hardest moments of the crisis. One of the results of this progressive withdrawal is that, in 2021, the tax burden on labor increased in most of the member countries of the Organization for Economic Cooperation and Development (OECD), after registering in 2020 the greatest decline since The financial crisis. Even so, the increases have been contained, and have not managed to fully offset the decreases registered in some States: in the bloc as a whole, the tax burden for workers was slightly reduced in 2021 (0.06 percentage points), until 34.6% of salary.

the so-called tax wedge increased in up to 24 of the 38 states that make up the OECD, according to the report Tax Wages that the organism publishes this Tuesday. Among them is Spain, which during the health and economic crisis did not reduce labor taxes and chose the ERTE instrument to keep income afloat. The tax burden on salaries ―income tax and contributions, subtracting tax benefits― increased slightly, by 0.28 percentage points, to 39.3%. With this percentage, the country returns to pre-pandemic levels and remains in 16th place of the 38 OECD countries with the highest burdens, the same position it occupied in 2020.

In this calculation, the income tax that workers pay in Spain weighed 11.3% of the total labor cost, below the average for the bloc, of 13%. As for social contributions, those borne by the worker (8.2%) were average, while those borne by the employer were well above, accounting for 23% of the labor cost compared to an average of 13 ,5%.


Europe brings together the countries that bore the highest tax burden on labor in 2021: Belgium (52.6% of the total labor cost), Germany (48.1%), Austria (47.8%), France (47%) and Italy (46.5%). The lowest were registered in Colombia (zero), Chile (7%) and New Zealand. In 36 of the 38 countries analyzed, average wages increased, also contributing to the rise in wage costs.

the so-called tax wedge it increased in up to 24 of the 38 States that make up the OECD, in many of them due to an increase in personal income tax, in others due to a reduction in tax deductions; in 12 it was reduced and in two (Costa Rica and Colombia) it remained stable. The increases were moderate, exceeding one percentage point only in the United States and Finland; the most significant decline was recorded in the Czech Republic (-4.12 points), after reforming the tax base of income tax, followed by Greece (2.23 points), Latvia (1.73) and Australia (1.25 ). In more than half of the countries where the tax burden on labor fell, there were variations in income taxation.

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The role of this last tax, which in Spain is the most powerful tax in the entire system, varies greatly in the countries of the bloc. Its weight, as a percentage of total labor costs, is equal to zero in Colombia, Chile and Costa Rica, and less than 10% in the Czech Republic, Greece, Japan, Korea, Mexico, Poland and Slovakia. The highest figures are found in Denmark (35.5%). In terms of social contributions paid by the employee, Slovenia and Lithuania are at the top, in those paid by the employer the highest percentage is that of France (26.6%), although there are nine other countries in which they exceed 20%, including Spain.

The average tax burden in the case of a couple with children is usually lower than that of a single worker. On average, for a couple with two children in which both receive an income, it amounted to 28.8% of the total costs.

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