OECD: Estonia has one of the highest tax burdens on earnings in OECD

30.04.2012, 11:46

An OECD survey of average tax and social security burden on employment incomes showed that in Estonia, employers pay in average 40.1 euros in taxes for every 100 euros earned by the worker, writes Postimees.

This is one of the highest indicators in OECD, according to the new OECD Taxing Wages survey.

The tax burden is measured by the ‘tax wedge as a percentage of total labour costs’ – or the total taxes paid by employees and employers, minus family benefits received, divided by the total labour costs of the employer. Taxing Wages also breaks down the tax burden between personal income taxes (PIT), including tax credits, and employee and employer Social Security Contributions (SSC)

According to the survey, Estonia’s tax wedge was 40.1 percent in 2011 which was 11th highest indicator and higher than in Denmark (38.4 percent), Norway (37.5 percent), but lower than in Sweden (42.8 percent) and Finland (42.7 percent).

The highest average earnings tax wedge was in Belgium (55.5 percent), followed by Germany (49.8 percent) and Hungary (49.4).
The lowest tax wedge was in Chile (7 percent).