Income after taxes increased by almost three quarters of OECD countries in 2024, because real wages have straightened, according to a new organization report. With the fall of inflation rates throughout the OECD area, income after taxes of a single employee paid to the average salary increased in real terms by 28 of the 38 OECD countries last year, after having decreased in 21 countries in 2023 and in 33 countries in 2022.
The report provides comparisons between the “fiscal corner” countries at work, which the OECD defines as “the sum of work at work, paid by employees and employers, reduced to cash benefits perceived by active homes, expressed as a percentage of labor costs.” The report examines eight household categories. The effective tax rates for seven of them increased slightly in 2024: for each one, the average tax corner has now found its 2019 level, before the COVVI-19 pandemic.
Decrease in effective tax rates for the “isolated father who receives 67% of the average salary”
The increase in social security contributions is the main factor that explains the increases in the tax corner in 2024. These increases were generally lower in 2024 than in the previous two years, when high inflation had increased the effective rate of income tax of natural persons, in the absence of automatic indexation of fiscal systems in many OCED countries, explains the report.
In 2024, the tax corner of a single worker paid to the average salary increased in 20 countries and won 0.05 percentage points on average in OECD countries, reaching 34.9%. The tax corner was between 52.6% in Belgium and 0% in Colombia, where workers who receive the average salary do not pay income tax and pay social security contributions that are not considered taxes.
For the second consecutive year, the only category for which effective tax rates fell in 2024 was that of the “isolated father who received 67% of the average salary.” For this category, the fiscal area has decreased in 24 countries. The strongest decrees have occurred in Portugal and Poland. For a single employee with the average salary, France has the third highest tax corner, behind Belgium and Germany.
Source: BFM TV
