- Tax Wedge Trends: The average tax wedge for single workers earning the average wage increased to 34.9% in 2024, with notable increases in countries like Italy and Slovenia. However, it decreased for single-parent households and some two-earner couples, highlighting varying impacts across household types.
- Post-Tax Income Recovery: In 2024, average wages and post-tax incomes recovered in real terms for many OECD countries, with single workers’ post-tax income increasing in 28 countries after declines in previous years due to inflation and fiscal drag.
- Impact of Tax Reliefs: The report’s special feature emphasizes the significant role of tax credits and allowances in shaping personal income tax rates, particularly benefiting households with children. Tax credits notably reduced tax liabilities more for single parents compared to single workers, indicating a targeted approach to tax relief.
Source OECD
