THE Organisation for Economic Cooperation and Development (OECD) report on the composition of the taxes levied on wages and salaries across its member nations will be released on April 29.

'Taxing Wages 2021' is the OECD's annual flagship publication that provides cross-country comparative data on income tax paid by employees, cash benefits received by in-work families and the associated social security and payroll tax contributions made by employees and employers, all of which are key factors when individuals consider their employment options and businesses make hiring decisions.

The report illustrates how these taxes are calculated in each OECD member country and examines the impact on household incomes. This year, it also provides indicators for 2020, which was heavily affected by the crisis related to the COVID-19 pandemic.

"It pays particular attention to what drove the changes in the indicators in 2020, including changes in average wages, as well as to changes made by countries to tax and benefit systems in response to the pandemic," said the Paris-based body. These include changes in personal income tax at both central and State/local levels, social security contributions, payroll taxes and cash benefits paid to workers.

The tax burden on labour is referred to as a "tax wedge" referring to the difference between an employer's cost of an employee and the employee's net disposable income. This enables quantitative cross-country comparisons of labour costs and the overall tax and benefit position for eight different household types, varying by income level and household composition (single persons, single parents, one or two-earner households, with or without children).

The average tax rates measure the part of gross wage earnings or labour costs taken in tax and social security contributions, both before and after cash benefits, and the marginal tax rates the part of a small increase of gross earnings or labour costs that is paid in these levies.