39.3% of Spanish workers’ wages went towards paying taxes and Social Security contributions in 2020, compared with 34.6% of the Organisation for Economic Co-operation and Development (OECD) average, according to the ‘Taxing Wages’ report published by the organisation.
While in the OECD the tax burden on wages fell by 0.39 percentage points compared to 2019, in Spain the decline was limited to 0.12 basis points.
Specifically, personal income tax accounted for 11.4% of wages, compared to 13.1% of the OECD average. For their part, social contributions paid by companies accounted for 23% and 4.9%, paid by workers, while the average for the members of the ‘think tank’ of developed countries stood at 13.1% and 8.3%, respectively.
Spain therefore ranks sixteenth among the countries with the highest tax rate in the OECD, in a ranking headed by Belgium, where 51.5% of workers’ wages are withheld from their salaries. Belgians are the only ones who have to transfer more of their salary to government and social security than they receive in net income.
Behind Belgium, the countries with the greatest difference between gross and net pay are Germany, where 49% is withheld, Austria (47.3%), France (46.6%), Italy (46%), the Czech Republic (43.9%) and Hungary (43.6%).
By contrast, the OECD countries with the lowest tax rates in 2020 were Colombia (0%), Chile (7%), New Zealand (19.1%), Mexico (20.2%), Switzerland (22.1%), Israel (22.4%), South Korea (23.3%), the United States (28.3%) and Australia (28.4%).