The OECD has published Taxing Wages 2016 which shows that tax on income from labor remained at 35.9% for OECD countries in 2015, the same as in the previous year. Before that the tax burden on labor had been rising for some years. The publication shows the calculation of the tax wedge, this being the total taxes paid by employers and employees, less family benefits received, expressed as a percentage of the total labor costs of the employer.

Taxes on wages have risen by around one percentage point for the average worker in the OECD countries in the years between 2010 and 2015. This is due to the phenomenon of wages rising faster than tax allowances and credits rather than any increase in the statutory tax rates. Of the OECD countries only seven had higher income tax for workers in 2015 compared to 2010 while eight of the countries had lower rates.

The highest average tax burden in the case of a single worker without children who earned the average national wage was in Belgium where the tax burden was 53% for this category in 2015. Rates of 49% or more were also applicable in Austria, Germany and Hungary. The highest tax burden for families with two children earning the average wage were in France and Belgium where the burden was just over 40%. The average tax burden in OECD countries for families with two children earning the average wage was 26.7%.

The OECD report contains a chapter outlining the tax and in-work benefits for families with children and how these affect the incentives for the second earner in the household to re-enter the workforce. The second earner in this case would normally be a woman and the OECD emphasizes the importance of taking into account gender factors in designing a tax and benefits system. The tax burden for the second earner is affected by the use of dependent spouse tax provisions; the way in which tax credit allowances or benefits are withdrawn; and the use of individual or family based taxation.

When a tax credit or allowance is given for a dependent spouse thereby lowering the tax burden on the primary earner in a household this will lower the incentive for the second earner to enter the workforce, as in this case that allowance for the first earner would be lost. This also applies where the tax allowance or tax credit is given or withdrawn on a family basis. In fact countries using family based taxation (taxing income jointly) often have a higher tax wedge and lower tax incentives for second earners, as the combined income including that of the second earner move the tax into a higher rate band.