Lowest tax wedge countries
The lowest tax wedge in the OECD is Colombia at 0% of total labour cost for a single average worker, ahead of Chile (7.2%) and Mexico (20%). Low-wedge countries lean less on payroll social-security contributions. The OECD average is 34.9%. A low wedge taxes labour lightly, but says nothing about other taxes. Modelled averages — not tax advice.
Source: OECD Taxing Wages. Data as of June 2026 (OECD Taxing Wages, 2023 data year).
Tax wedge ranked, lowest first
| # | Country | Tax wedge | Income tax | Total social security | Net take-home (USD PPP) |
|---|---|---|---|---|---|
| 1 | Colombia | 0% | 0% | 0% | $16,615 |
| 2 | Chile | 7.2% | 0.1% | 7% | $27,228 |
| 3 | Mexico | 20% | 9.6% | 12.7% | $14,998 |
| 4 | New Zealand | 21.1% | 21.1% | 0% | $40,381 |
| 5 | Israel | 23.2% | 10.8% | 13.7% | $39,975 |
| 6 | Switzerland | 23.5% | 12.2% | 12.8% | $81,465 |
| 7 | Korea | 24.6% | 6.8% | 20.5% | $55,956 |
| 8 | Costa Rica | 28.6% | 0% | 35.8% | $24,740 |
| 9 | Australia | 29.2% | 24.9% | 6% | $52,668 |
| 10 | United States | 29.9% | 16.6% | 15.8% | $50,954 |
| 11 | United Kingdom | 31.3% | 14.8% | 20.1% | $52,790 |
| 12 | Iceland | 31.7% | 27.3% | 6.5% | $55,620 |
| 13 | Canada | 31.9% | 19.2% | 15.6% | $54,408 |
| 14 | Japan | 33% | 7.9% | 30.3% | $41,562 |
| 15 | Poland | 34.3% | 5.7% | 34.2% | $32,636 |
| 16 | Ireland | 35.1% | 24% | 15.1% | $55,475 |
| 17 | Netherlands | 35.1% | 16.4% | 23% | $56,816 |
| 18 | Norway | 36.4% | 20.2% | 20.9% | $59,594 |
| 19 | Denmark | 36.4% | 36% | 0.6% | $52,734 |
| 20 | Türkiye | 38.4% | 12.6% | 32.5% | $33,314 |
| 21 | Greece | 38.5% | 10.9% | 36.2% | $32,983 |
| 22 | Lithuania | 38.9% | 18.3% | 21.3% | $28,683 |
| 23 | Estonia | 39.4% | 17.3% | 35.4% | $29,254 |
| 24 | Czechia | 40.2% | 9% | 44.8% | $30,492 |
| 25 | Spain | 40.2% | 15.6% | 36.9% | $38,064 |
| 26 | Latvia | 41.1% | 16.6% | 34.1% | $25,533 |
| 27 | Hungary | 41.1% | 15% | 31.5% | $26,544 |
| 28 | Luxembourg | 41.3% | 20.9% | 26.1% | $55,929 |
| 29 | Slovak Republic | 41.6% | 10.9% | 43.1% | $22,614 |
| 30 | Sweden | 42.1% | 16.9% | 38.4% | $43,556 |
| 31 | Portugal | 42.3% | 17.6% | 34.8% | $29,328 |
| 32 | Slovenia | 43.3% | 12.1% | 38.2% | $29,918 |
| 33 | Finland | 43.5% | 21.1% | 31.7% | $44,359 |
| 34 | Italy | 45.1% | 22.1% | 37.2% | $38,114 |
| 35 | France | 46.8% | 16.2% | 47.6% | $44,152 |
| 36 | Austria | 47.2% | 15% | 45.6% | $51,288 |
| 37 | Germany | 47.9% | 17% | 40.5% | $50,959 |
| 38 | Belgium | 52.7% | 25.9% | 41% | $48,922 |
Source: OECD Taxing Wages. Data as of June 2026 (OECD Taxing Wages, 2023 data year).
Low wedge, low taxes overall?
A light wedge on labour doesn't always mean a light overall tax burden — some low-wedge countries shift the load to consumption or property taxes, or provide fewer public services. For the heavy end, see the highest tax wedge; to see where workers keep the most of their gross pay, see best net take-home.
Frequently asked questions
Which OECD country has the lowest tax wedge?
Colombia has the lowest tax wedge in the OECD at 0% of labour cost for a single average worker, followed by Chile (7.2%) and Mexico (20%). Low-wedge countries tend to rely less on payroll-based social-security contributions, especially on the employer side. The OECD average is 34.9%.
Does a low tax wedge mean low total taxes?
Not necessarily. The tax wedge only measures taxes on labour income. A country can have a low wedge but raise revenue elsewhere — through consumption taxes (VAT/GST), property or resource taxes — or simply provide fewer publicly-funded services. The wedge is one slice of the overall tax picture.
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Last updated: 2026-06-29