Taxing Wages: Key findings for Greece 2016
Tax on labour income
The tax wedge is a measure of the tax on labour income, which includes the tax paid by both the employee and the employer..
Single worker
• Greece is ranked 14th among the 34 OECD member countries in decreasing order with a tax wedge for an average single worker at 39.3% in 2015, compared with the OECD average of 35.9%. The country occupied the same position in 2014.
• In Greece, employee and employer social security contributions combine to account for 82% of the total tax wedge compared with 63% of the total OECD average tax wedge.
One-earner married couple with two children
The tax wedge for a worker with children may differ from the tax wedge of a worker on the same income without children, since many OECD countries provide benefits to families with children through cash transfers and preferential tax provisions.
• Greece had the 6th highest tax wedge in the OECD for an average married worker with two children at 38.1% in 2015, which compares with the OECD average of 26.7%. The country had the 3rd highest position in 2014. • Child related benefits and tax provisions tend to reduce the tax wedge for workers with children compared with the average single worker. In Greece in 2015, this reduction (1.2 percentage points) was less than the OECD average (9.2 percentage points).
Tax wedge trends between 2000 and 2015
• In Greece, the tax wedge for the average single worker increased by 0.2 percentage points from 39.1 to 39.3% between 2000 and 2015. During the same period, the average tax wedge across the OECD decreased by 0.7 percentage points from 36.6 to 35.9%.
• In Greece, there has been considerable volatility in the tax wedge for the average single worker since 2010. Most notably, there was an increase of 3.1 percentage points between 2010 and 2011 and there has been a subsequent decrease of 3.9 percentage points since 2011.
Employee tax on labour income
The employee net average tax rate is a measure of the net tax on labour income paid directly by the employee
In Greece, the average single worker faced a net average tax rate of 24.3% in 2015 compared with the OECD average of 25.5%. In other words, in Greece the take-home pay of an average single worker, after tax and benefits, was 75.7% of their gross wage.
• Taking into account child related benefits and tax provisions, the employee net average tax rate for an average married worker with two children in Greece was reduced to 22.9% in 2015, compared with 14.6% for the OECD average. This means that an average married worker with two children in Greece had a take-home pay, after tax and family benefits, of 77.1% of their gross wage compared to 85.4% for the OECD average.
page source http://www.oecd.org/greece/
