Tax Wedge
Share of total labour costs taken by income tax and social security contributions for a single worker without children earning 67% of the average wage.
This page uses the latest available Eurostat / OECD observation (2024). Country-level datasets often lag the current calendar year because they depend on official reporting and validation.
What is the global average Tax Wedge?
The global average Tax Wedge is 34.87 % of labour cost as of 2024. Switzerland has the highest at 19.99 % of labour cost, while Belgium has the lowest at 45.8 % of labour cost. Data covers 33 countries. Source: Eurostat / OECD.
Top Countries
Regional Averages
Country Rankings
View full rankings| # | Country | Value |
|---|---|---|
| 1 | Switzerland | 19.99 % of labour cost |
| 2 | Cyprus | 23.27 % of labour cost |
| 3 | Ireland | 26.27 % of labour cost |
| 4 | Netherlands | 26.86 % of labour cost |
| 5 | Iceland | 27.28 % of labour cost |
| 6 | United States | 27.6 % of labour cost |
| 7 | Malta | 28.99 % of labour cost |
| 8 | Japan | 30.72 % of labour cost |
| 9 | Norway | 32.31 % of labour cost |
| 10 | Luxembourg | 32.48 % of labour cost |
| 11 | Poland | 33.01 % of labour cost |
| 12 | Denmark | 33.54 % of labour cost |
| 13 | Lithuania | 33.87 % of labour cost |
| 14 | Turkey | 34.71 % of labour cost |
| 15 | Bulgaria | 34.91 % of labour cost |
| 16 | Estonia | 34.96 % of labour cost |
| 17 | Finland | 35.24 % of labour cost |
| 18 | Greece | 35.25 % of labour cost |
| 19 | Portugal | 36.14 % of labour cost |
| 20 | Croatia | 36.57 % of labour cost |
| 21 | Spain | 37.16 % of labour cost |
| 22 | Italy | 38.11 % of labour cost |
| 23 | Romania | 38.3 % of labour cost |
| 24 | Latvia | 38.36 % of labour cost |
| 25 | Czechia | 38.88 % of labour cost |
| 26 | Sweden | 39.15 % of labour cost |
| 27 | Slovakia | 40.4 % of labour cost |
| 28 | France | 41.14 % of labour cost |
| 29 | Hungary | 41.15 % of labour cost |
| 30 | Slovenia | 41.71 % of labour cost |
| 31 | Austria | 42.49 % of labour cost |
| 32 | Germany | 43.92 % of labour cost |
| 33 | Belgium | 45.8 % of labour cost |
Definition
The tax wedge measures the share of total labour costs taken by income tax and social security contributions. WorldStats computes it from Eurostat net earnings data for a single worker without children earning 67% of the average wage, using the gap between total labour costs and net earnings as a percentage of total labour costs.
How it is calculated
Eurostat's net earnings dataset provides modeled total labour costs and net earnings based on OECD Taxing Wages methods. For the WorldStats tax wedge indicator, the formula is: tax wedge = (total labour costs - net earnings) / total labour costs x 100. The selected case is a single worker without children at 67% of average wage, which matches the standard structural tax-wedge scenario described in the Eurostat metadata.
Interpretation
A lower tax wedge means a larger share of employer labour cost reaches the worker as net pay. A higher tax wedge can reflect higher income taxes, employee social security contributions, employer contributions, or payroll taxes. The indicator does not judge whether taxes fund valuable public services, and it should be compared with benefits, wages, and public-service context.
Frequently Asked Questions
The tax wedge is the share of labour cost not received as net pay. A lower value means more of the employer's labour cost reaches the worker after modeled taxes and social contributions.
Yes. The total labour cost measure includes gross earnings plus employer social security contributions and payroll taxes where applicable. That is why the tax wedge can be higher than an employee-only tax rate.
No. It is a labour-tax measure for one worker type. It does not include consumption taxes, property taxes, capital taxes, or the value of public benefits and services.
Eurostat identifies the structural tax wedge indicator for a single worker without children at 67% of the average wage. Using that case keeps the comparison aligned with the source methodology.
About this data
- Source
- Eurostat / OECD
earn_nt_net:P1_NCH_AW67 - Definition
- Share of total labour costs taken by income tax and social security contributions for a single worker without children earning 67% of the average wage.
- Coverage
- Data for 33 countries (2024)
- Limitations
- Coverage varies by country and reporting period.