Where is work taxed most heavily, and where least? The OECD tax wedge — income tax plus employee and employer social-security contributions as a share of total labour cost — gives a clean, comparable answer for a single average worker.
The heaviest tax wedges
| Rank | Country | Tax wedge |
|---|---|---|
| 1 | Belgium | 52.7% |
| 2 | Germany | 47.9% |
| 3 | Austria | 47.2% |
| 4 | France | 46.8% |
| 5 | Italy | 45.1% |
| 6 | Finland | 43.6% |
| 7 | Slovenia | 43.3% |
The top of the table is a continental-European cluster funding large social-insurance systems through payroll contributions. In every one, social security — not income tax — does most of the work.
The lightest tax wedges
| Rank | Country | Tax wedge |
|---|---|---|
| 1 (lowest) | Colombia | ~0% |
| 2 | Chile | 7.2% |
| 3 | Mexico | 20.0% |
| 4 | New Zealand | 21.1% |
| 5 | Israel | 23.2% |
| 6 | Switzerland | 23.5% |
| 7 | Korea | 24.6% |
Colombia’s near-zero figure reflects the OECD model: an average-wage worker there falls below the income-tax and contribution thresholds. Switzerland is notable as the lightest-taxed major European economy, with low, evenly-split employee and employer contributions.
Where the big economies land
- United States: 29.9% — below the OECD average.
- United Kingdom: 31.3%.
- Japan: 33.0%.
- Canada: 31.9%.
- OECD average: 34.9%.
What the ranking doesn’t tell you
The tax wedge measures labour taxes only. A low-wedge country may raise revenue through high consumption or property taxes instead, or simply provide fewer publicly-funded services. And the wedge says nothing about what your contributions buy — universal healthcare, pensions and parental leave often come bundled with the heaviest wedges. Read it as a precise measure of one thing: how much of the cost of employing an average worker is taken in tax before it reaches them.
Related reading
- Highest tax wedge countries — the full ranking.
- Lowest tax wedge countries.
- What is the tax wedge?
- Tax wedge by country — every OECD country.
Figures from OECD Taxing Wages (2023 data year), CC BY 4.0. Modelled averages — not personal tax advice.