Tax burdens

OECD Observer

Click for a bigger, clearer graph (61k)

Income tax on wage earnings, child cash transfers and contributions to finance social security systems continue to vary widely from country to country. Average tax rate figures, calculated as a percentage of gross wage earnings of the average production worker, known as the APW for short, also differ significantly across various types of households.

The graph illustrates the combined burden of income tax and employee social security contributions, less child cash transfers, at the APW wage level in OECD countries in 1998. The average burden for single individuals without children ranges from 2.6% in Mexico to 43.4% in Denmark. With the exception of Turkey and Greece, reduced average tax rates apply to married one-earner couples with two children, with negative rates found for Iceland (-3.9%), the Czech Republic (-3.4%) and Luxembourg (-0.2%). This means that cash benefits in these countries bump up net take-home pay so much so that it exceeds gross wage earnings.

The underlying data show income tax as a percentage of gross APW wage earnings ranging from a low of zero in Mexico to 33.7% in Denmark, in the case of single persons without children. Add on employee social security contributions and the average tax burden of a single person without children exceeds 40% in Denmark (43.4%), Germany (42.1%) and Belgium (41.8%). At the other extreme, the average tax rate excluding transfers remains below 20% in Mexico (2.6%), Korea (6.4%), Japan (13.8%), Poland (15.8%), Portugal (18.1%) and Greece (18.3%). Cash transfers are found to lower average tax rates, in some cases significantly, in those countries with child cash benefit programmes.  

For an exhaustive comparative study on taxation and other deductions on wages across the OECD area, see the new report, Taxing Wages, available at

ISBN 92-64-05878-8,2686,en_2649_37425_1_1_1_1_37425,00.html 

©OECD Observer No 220, April 2000 

Economic data


Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly

Online edition
Previous editions

Don't miss

  • Read some of the insightful remarks made at OECD Forum 2017, held on 6-7 June. OECD Forum kick-started events with a focus on inclusive growth, digitalisation, and trust, under the overall theme of Bridging Divides.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • How do the largest community of British expats living in Spain feel about Brexit? Britons living in Orihuela Costa, Alicante give their views.
  • Brexit is taking up Europe's energy and focus, according to OECD Secretary-General Angel Gurría. Watch video.
  • OECD Chief Economist Catherine Mann and former Bank of England Governor Mervyn King discuss the economic merits of a US border adjustment tax and the outlook for US economic growth.
  • Africa's cities at the forefront of progress: Africa is urbanising at a historically rapid pace coupled with an unprecedented demographic boom. By 2050, about 56% of Africans are expected to live in cities. This poses major policy challenges, but make no mistake: Africa’s cities and towns are engines of progress that, if harnessed correctly, can fuel the entire continent’s sustainable development.
  • OECD Observer i-Sheet Series: OECD Observer i-Sheets are smart contents pages on major issues and events. Use them to find current or recent articles, video, books and working papers. To browse on paper and read on line, or simply download.
  • How sustainable is the ocean as a source of economic development? The Ocean Economy in 2030 examines the risks and uncertainties surrounding the future development of ocean industries, the innovations required in science and technology to support their progress, their potential contribution to green growth and some of the implications for ocean management.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • They are green and local --It’s a new generation of entrepreneurs in Kenya with big dreams of sustainable energy and the drive to see their innovative technologies throughout Africa.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at .

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2017