Spaniards allocate 39.3% of their salary to pay taxes, almost five points more than the OECD average

MADRID, 24 May. (EUROPA PRESS) –

39.3% of the salary of Spanish workers was used to pay taxes and Social Security contributions in 2021, compared to 34.6% of the average of the Organization for Economic Cooperation and Development (OECD), according to the ‘Taxing Wages’ report published by this organization.

While in the OECD the tax burden on wages was reduced by 0.06 percentage points compared to 2020, in Spain an increase of 28 basis points was observed.

Specifically, personal income tax weighed 11.3% on salary in Spain, compared to 13% of the OECD average. For its part, the social contributions paid by companies accounted for 23% and those paid by workers, 4.9%, when the average of the members of the ‘think tank’ of developed countries stood at 13.5 % and 8.2%, respectively.

Thus, Spain remained in the sixteenth position of the countries with the highest tax wedge in the OECD, in a ranking headed by Belgium, where workers have 52.6% of their salary withheld. The Belgians are the only ones who must transfer to the Administration and Social Security a larger sum of their salary than they receive in net.

Behind Belgium, the countries with the greatest difference between gross and net salary are Germany, where 48.1% is retained, Austria (47.8%), France (47%), Italy (46.5%), Slovenia (43.6%), Hungary (43.2%), Finland (42.7%), Sweden (42.6%), Portugal (41.8%), Slovakia (41.3%), Latvia (40 .5%) and Luxembourg (40.2%).

By contrast, the OECD countries with the lowest tax wedges in 2021 were Colombia (0%), Chile (7%), New Zealand (19.4%), Mexico (19.6%), Switzerland (22.8 %), South Korea (23.6%), Israel (24.2%), Australia (27.1%), the United States (28.4%) and Costa Rica (29.2%).

“The tax wedge increased in 24 of the 38 OECD countries, decreased in 12 and remained unchanged in two,” the organization explained, adding that increases of more than one percentage point were observed in Israel (1.02), the United States (1.2) and Finland (1.33).

“In almost all countries where the tax wedge for the single worker increased, the increase was driven by higher personal income tax,” the OECD added, which, in some countries, was the result of higher average wages interacting with tax systems. progressive income tax rates, while in other cases it was driven by a higher share of taxable earnings as the value of tax allowances and tax credits fell relative to average wages.