Brussels, 26/03/2013 (Agence Europe) - Deductions from pay - tax and social security payments by workers and employers - increased in 19 of the 34 OECD countries (Organisation for Economic Cooperation and Development) from 2011 to 2012, to an average of 35.6% for the OECD, according to figures released by the organisation on 26 March 2013. The increase was highest in four EU member states - the Netherlands, Poland, Slovakia and Spain - due to rises in tax and employers' social security contributions in the first three and a rise in income tax in Spain.
The highest deductions from wages in 2012, however, were in other EU member states - Belgium, France, Germany, Greece, Hungary, Austria, Italy and Sweden - but vary widely from one country to another depending on the number of people in a household. For a single worker without children who earns the average wage, Belgium has the highest tax and social security levels, equivalent to 56% of a worker's total cost, followed by France (50.2%), Germany (49.7%), Hungary (49.4%), Austria (48.9%), Italy (47.6%) and Sweden (42.8%). The lowest taxes on pay in the EU for single people without children are in Ireland (25.9%), the United Kingdom (32.3%) and Poland (35.5%). For a married couple on a single average income and with two dependent children, France comes top with deductions of 43.1%, followed by Greece (43.0%), Belgium (41.4%), Italy (38.3%), Austria (38.0%), Sweden (37.5%), Finland (37.3%), with Spain (35.4%) and Germany (34.2%) in ninth and tenth position. The lowest deductions are in Ireland (6.4%), followed by Luxembourg (13.3%).
In terms of changes in the two income tax wedges (“tax wedge as a percentage of total labour costs” - or the total taxes paid by employees and employers, minus family benefits received, divided by the total labour costs of the income tax burdens for employee and employer) from 2011 to 2012 the biggest increases were in Spain (up 1.4% and 1.1%), Poland (up 1.2% and 1.2%), Slovakia (up 0.8% and 1.0%) and the Netherlands (up 0.6% and 1.1%), with decreases in Portugal (-1.3% and -1.2%), the Czech Republic (-0.2% and -1.6%) and Greece (-0.5 and -0.4%).
In May 2013, these figures will be complemented by a report on income tax and can be compared with recent Eurostat figures showing a 1.3% increase in the average labour cost per hour in the EU27 in 2012, or an average of €31, with the most expensive labour in Sweden, Belgium, Denmark, France and Germany and the cheapest in Bulgaria. (FG/transl.fl)