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Income Tax

Where The System Takes The Biggest Bite From Paychecks

Last week, the OECD released the latest edition of its report which focuses on the net personal average tax rate in different nations. It takes into account income tax and social security contributions paid by employees without family benefits as a share of gross wages. Last year, the average share of gross wages paid in tax across the OECD was 25.5 percent. There is a considerable difference in tax rates between countries and they are heavily dependent on earnings and family status.

A single worker in Belgium and Germany will face a high combination of income tax and social security payments that will account for just under 40 percent of his or her gross earnings. Despite that, workers in both countries do get something back such as health insurance, pensions, old-age care and unemployment benefits. In Italy, the break down is 21.9 percent for income tax and 9.5 percent for social security, adding up to 31.4 percent in total. The U.S. trails with 16.1 percent for income tax and 7.7 percent for social security making for 23.8 percent of gross earnings in total.

Description

This chart shows the average share of gross wages paid in tax/social security contributions in 2018.

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Number of people subject to social security contributions in Germany 2000-2026
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U.S. number of retired Social Security beneficiaries 2025, by age
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U.S. number of retired workers receiving Social Security 2008-2025
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Number of Social Security beneficiaries in the U.S. 1967-2025
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Comprehensive social security expenditure in Hong Kong 2015-2025
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U.S. share of retired Social Security female beneficiaries 2025, by age

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