Foreword 3

Notes 4

Executive Summary 15

Key findings 16

Part I Effective tax rates on labour income - Comparisons and trends 18

1 Overview 19

Introduction 20

Taxation of single workers 21

Single versus one-earner couple taxpayers 31

Taxation of two-earner couples 34

Wages 38

References 43

Notes 43

2 Progressivity of labour taxation in OECD countries 45

Introduction 45

The progressivity of labour taxation is at the heart of the tax, inequality and growth agenda 46

Calculating the OECD tax progressivity indicator 50

Applying the tax progressivity indicator across OECD countries in 2025 51

Conclusion 66

Annex 2.A. Additional figures 68

Notes 71

3 Effective tax rates on labour income in 2025 73

Average tax rates 74

Marginal tax rates 76

Notes 98

4 Graphical exposition of effective tax rates in 2025 99

Notes 140

5 Effective tax rates on labour income in 2024 141

6 Evolution of effective tax rates on labour income (2000-25) 156

Long-term trends in labour taxation since 2000 157

Note 184

Part II Country details, 2025 185

Australia (2024-2025 Income tax year) 186

Personal income tax system 189

Social security contributions 191

Other taxes 192

Universal cash transfers 192

Recent changes in the tax/benefit system 195

Memorandum items 196

2024-25 Tax Equations 199

Austria 201

Personal Income Tax 204

Compulsory Social Security Contributions to Schemes Operated within the Government Sector 207

Universal Cash Transfers 207

Main Changes in Tax/Benefit Systems Since 2004 208

Memorandum Items 210

2025 Tax equations 212

Belgium 214

Personal income tax system 217

Compulsory social security contributions to schemes operated within the government sector 220

Universal cash transfers 222

Main changes in the tax/benefit system since 2016 223

Memorandum Items 224

2025 Tax equations 227

Canada 229

Personal Income Tax Systems 232

Compulsory Social Security Contributions to Schemes Operated Within the Government Sector 235

Universal Cash Transfers 237

Main changes in the Tax/Benefit system since 2009 238

2025 Tax equations 242

Notes 244

Chile 245

Personal income tax system 248

Compulsory social security contributions 249

Universal cash transfers 251

Recent changes in the tax/benefit system 252

Memorandum items 252

2025 Tax equations 254

Notes 255

Colombia 256

Personal income tax system 259

Compulsory social security contributions to schemes operated within the government sector 260

Universal cash transfers 261

Main Changes in Tax/Benefit Systems Since 2019 262

Memorandum items 262

2025 Tax equations 264

Notes 265

Costa Rica 266

Personal income tax system 269

Compulsory social security contributions to schemes operated within the government sector 270

Universal cash transfers 270

Recent changes in the tax/benefit system 270

Memorandum items 270

2025 Tax equations 272

Czechia 273

Personal Income Tax System 276

Compulsory Social Security Contributions to Schemes Operated within the Government Sector 277

Universal Cash Transfers 278

Main Changes in Tax/Benefit Systems since 2025 279

Memorandum Items 279

2025 Tax equations 281

Denmark 282

Personal income tax system 285

Compulsory Social Security Contributions to Schemes Operated Within the Government Sector 287

Universal Cash Transfers 288

Main Changes in Tax/Benefit Systems 288

Memorandum Items 291

2025 Tax equations 293

Estonia 295

Personal income tax system 298

Compulsory social security insurance system 299

Payroll tax 300

Universal cash transfers 300

Main changes in tax/benefit system since 2005 300

Memorandum items 301

2025 Tax equations 303

Finland 304

Personal Income Tax System 307

Compulsory Social Security Contributions to Schemes Operated within the Government Sector 308

Universal Cash Transfers 309

Main Changes in the Tax/Benefit System since 2024 309

Memorandum Items 310

2025 Tax equations 312

France 313

Personal income tax system 316

Compulsory social security contributions to schemes operated within the government sector. 318

Universal cash transfers 320

Main changes in the tax system and social benefits regime since the taxation of 2015 income 321

Memorandum items 323

Notes 329

Germany 330

Personal Income Tax Systems 333

Compulsory Social Security Contributions to Schemes Operated Within the Government Sector 335

Universal Cash Transfers 338

Main Changes in Tax/Benefit Systems Since 1997 338

Memorandum Items 340

2025 Tax equations 343

Greece 344

Personal income tax system 347

Mandatory Social Security Contributions to schemes operated within the Government Sector 351

Universal Cash Transfers 352

Main Changes in the Tax/benefit System since 2016 353

Memorandum items 353

2025 Tax equations 356

Note 356

Hungary 357

Personal Income Tax Systems 360

Compulsory Social Security Contributions to Schemes Operated within the Government Sector 361

Universal cash transfers 363

Main Changes in the Tax/benefit System Since 2010 364

Memorandum Items 364

2025 Tax equations 366

Iceland 367

Personal Income Tax System 370

Compulsory Social Security Contributions to Schemes Operated Within the Government Sector 371

Universal Cash Transfers 371

Main Changes in the Tax/Benefit System Since 1998 372

Memorandum Items 375

2025 Tax equations 377

Note 378

Ireland 379

Personal income tax systems 382

Compulsory Social Security Contributions to Schemes Operated within the Government Sector. 384

Universal Cash Transfers 384

Other Main Changes in Tax/Benefit System Since 2016 386

Memorandum Items 386

2025 Tax equations 389

Note 390

Israel 391

Personal income tax system 394

Compulsory social security insurance system 395

Payroll taxes 396

Universal cash transfers 396

Main changes in the tax and benefit systems since 2002 397

Memorandum items 398

Italy 402

Personal Income Tax 405

Compulsory Social Security 409

Universal Cash Transfers 409

Main Changes 410

Memorandum Item 411

2025 Tax equations 413

Notes 414

Japan 415

Personal Income Tax Systems 418

Compulsory Social Security Contribution to Schemes Operated Within the Government Sector 422

Cash Benefits 424

Main changes in the Tax/benefit Systems since 1998 426

Memorandum Item 428

2025 Tax equations 431

Note 432

Korea 433

Personal Income Tax System 436

Compulsory Social Security Contribution to Schemes Operated Within the Government Sector 440

Universal Cash Transfers 442

Main Changes in Tax/Benefit System since 2000 442

Memorandum Item 443

2025 Tax equations 445

Latvia 447

Personal income tax system 450

Compulsory social security contributions to schemes operated within the government sector. 453

Universal cash transfers 455

Main changes in tax/benefit system in 2025 455

Memorandum items 456

2025 Tax equations 457

Lithuania 458

Personal income tax system 461

Compulsory social security insurance system 462

Universal cash transfers 464

Main changes in tax/benefit system since 2000 465

Memorandum items 469

2025 Tax equations 472

Luxembourg 474

Personal income tax system 477

Compulsory social security contributions to schemes operated within the government sector 480

Universal cash transfers 480

Main changes since 2008 481

Memorandum item 481

2025 Tax equations 484

Mexico 486

Personal Income Tax 489

Compulsory Social Security Contributions to Schemes Operated within the Government Sector 491

Universal Cash Transfers 491

Main Changes in the Tax/Benefit System since 1995 491

Memorandum Items 492

2025 Tax equations 494

Notes 495

Netherlands 496

Personal Income Tax System (Central Government) 499

Compulsory Social Security Contributions to Schemes Operated Within the Government Sector 501

Universal Cash Transfers 502

Main Changes in the Tax/Benefit Systems Since 2000 503

Memorandum Items 505

2025 Tax equations 508

Note 510

New Zealand (2025-2026 Income tax year) 511

Personal Income Tax System 514

Compulsory Social Security Contributions to Schemes Operated Within the Government Sector 514

Universal Cash Transfers 515

Main Changes in Personal Tax/Benefit Systems since 2024/25 516

Memorandum Items 516

2025 Tax equations 518

Norway 519

Personal Income Tax System 522

Social Security Contributions 523

Universal Cash Transfers 523

Main Changes in Tax/Benefit Systems Since 2002 524

Memorandum Items 528

2025 Tax equations 530

Poland 531

Personal income tax system 534

Social Security Contributions 537

Universal Cash Transfers 537

Main Changes in Tax/benefit Systems Since 2012 539

Memorandum Items 541

2025 Tax equations 544

Notes 545

Portugal 546

Personal Income Tax 549

Compulsory social security contributions to schemes operated within the government sector. 552

Universal cash benefits 553

Main Changes in tax/benefit systems since 2006 554

Memorandum Items 554

2025 Tax equations 556

Slovak Republic 557

Personal Income Tax System 560

Compulsory Social Security Contributions to Schemes Operated within the Government Sector 563

Universal Cash Transfers 565

Main Changes in Tax/Benefit Systems since 2017 566

Memorandum items 568

2025 Tax equations 570

Note 571

Slovenia 572

Personal income tax system 575

Compulsory social security insurance system 577

Payroll tax 578

Universal cash transfers 578

Main changes in tax/benefit system since 2005 579

Memorandum items 581

2025 Tax equations 583

Spain 584

Personal Income Tax System 587

Compulsory Social Security Contributions to Schemes Operated within the Government Sector 589

Universal Cash Transfers 590

Recent Changes in Tax/Benefit Systems 590

Memorandum Items 590

2025 Tax equations 593

Sweden 595

Personal Income Tax Systems 598

Compulsory Social Security Contributions to Schemes Operated within the Government Sector 600

Universal Cash Transfers 601

Main Changes in Tax/Benefit Systems Since 1998 601

Memorandum Items 602

2025 Tax equations 604

Switzerland 605

Personal income tax systems 608

Compulsory social security contributions to schemes operated within the government sector 612

Universal cash benefits 613

Main changes in the tax/benefit system since 1998 613

Memorandum item 613

2025 Tax equations 617

Türkiye 618

Personal Income Tax Systems 621

Compulsory Social Security Contributions to Schemes Operated within the Government Sector 622

Universal Cash Transfers 623

Main Changes in Tax/Benefit System Since 2004 623

Memorandum Items 624

2025 Tax equations 625

Notes 625

United Kingdom (2025-2026 Income tax year) 626

Personal Income Tax System 629

Compulsory Social Security Contributions to Schemes Operated Within the Government Sector 630

Universal Cash Transfers 631

Recent changes in the tax/benefit system 631

Memorandum Items 632

2025 Tax equations 634

United States 635

Personal Income Tax System 638

Compulsory Social Security Contributions to Schemes Operated within the Government Sector 641

Universal Cash Transfers 641

Principal Changes to Individual Provisions since 2017 642

Memorandum Items 642

2025 Tax equations 645

Notes 646

Annex A. Methodology and limitations 647

Reference 666

Notes 666