Among OECD countries, Hungary imposed the second highest tax wedge – including income taxes and social security charges – on a single person earning average wages last year, behind Belgium and ahead of Germany, according to the OECD’s latest annual study on taxing wages. The tax wedge is the difference between an employee’s net take-home pay and the cost of their employment, including income taxes and social-security contributions.
In 2007, single individuals without children earning the average wage in services and manufacturing industries faced a tax wedge of 55.5% of the cost of their labor to their employers in Belgium, 54.4% in Hungary and 52.2% in Germany, compared with 15.3% in Mexico, 19.6% in Korea and 21.5% in New Zealand. The average for OECD countries was 37.7%.
For a single-earner married couple with two children on average earnings, Hungary (43.8%), Turkey (42.7%) and Greece (42.6%) charged the most, while Ireland (1.1%), New Zealand (2.8%) and Iceland (11.4%) took the least, the study showed. The average for OECD countries was 27.3%.
The survey noted that in Hungary and some other OECD countries, families with children paid less in tax as a percentage of their income in recent years and that in many member countries average full-time earnings rose considerably between 2000 and 2006, with Hungary among nine countries showing nominal increases of more than 40%.
Considering that Belgians earn 75% more than Hungarians, and therefore have that much more take home, this is a very sorry indictment of the country or of its government’s concern for its people’s living standards.
and the cost in Belgium is on the same level as in Hungary?
The Hungarians I know who went to Sweden to work the last 10 years discovered that the difference was not so big what they got in their hand after paying the high rent for the flat etc.