Taxing Wages 2022
Impact of COVID-19 on the Tax Wedge in OECD Countries
This annual publication provides details of taxes paid on wages in OECD countries. It covers 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.
Taxing Wages 2022 includes a special feature entitled: "Impact of COVID-19 on the Tax Wedge in OECD countries".
Also available in: French
Special feature: Impact of COVID-19 on the tax wedge in OECD countries
In 2021, the COVID-19 pandemic continued to cause disruption around the world. However, the economic impact was not as damaging as in 2020: across the OECD, GDP grew by an estimated 5.3% in 2021 after contracting by 4.7% the previous year as countries were able to better manage the virus, aided by growing vaccination coverage over the course of the year. Unemployment fell across the OECD, although employment levels, hours worked and labour force participation generally remained below pre-crisis levels, and wage growth in many countries did not keep pace with sharp rises in consumer prices. As economies recovered, governments were able to scale back many of the measures such as job retention schemes and cash benefits introduced to protect livelihoods and incomes in 2020. Nonetheless, the recovery in 2021 was uneven between and within countries. Low-income jobs were disproportionately affected by the pandemic and many of those who lost their jobs have struggled to find new employment. Meanwhile, acute labour shortages emerged in certain sectors (OECD, 2021[1]).
Also available in: French
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