Taxes and levies for domestic workers are still high in international comparison. At 34.6 percent, Austria has the fourth highest “tax wedge” of the 38 OECD member states.
The so-called “tax wedge” includes not only the taxes payable by the employees (ie payroll taxes and social security contributions), but also the employer’s social security contributions less the family benefits received. With 46.8 percent of total wage costs, Austria ranks fourth in terms of taxes for middle-income earners without children – after Belgium, Germany and France. In 2021, Austria was still in third place with 47.8 percent.
Taxes for employees with children have fallen sharply
As the OECD’s “Taxing Wages” study published on Tuesday shows, taxes for workers with children have fallen significantly. The figure for an average single-earner couple with two children was 30.2 percent in 2022, up from 34.1 percent the year before, making it the 13th highest “tax wedge” in the OECD. The OECD average was 25.6 percent (2021: 24.6). In 2021, Austria was still in eighth place.
Increased workload in 2022
Overall, the OECD notes that the tax burden on labor increased in 2022 as higher nominal wages led to higher taxes and workers were less likely to receive tax credits and transfers. At the same time, real wages have fallen due to inflation in the OECD area. As a result, the employees were negatively affected in two ways. In 2022, inflation will reach its highest level in more than 30 years.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
