AGI – Labor taxes in Italy are down, but they are still too high among OECD countries: between 2019 and 2020, the tax wedge moves back from 47.9% to 46%, attesting to 11.4 points above the OECD average, which is 34.6% (from 35% in 2019).
A share that places our country in fourth place in the area, behind Belgium, Germany and Austria, on a par with France. This is what we read in the report ‘Taxing Wages‘of the OECD.
More specifically, the tax wedge in Italy fell by 1.91 percentage points between 2019 and 2020, reaching the 46% for an average single worker with no children.
This is the fourth highest tax wedge among the 34 countries in the OECD area, after Belgium (51.5%, the Germany (49%) el‘Austria (47.3%), while the France it is also at 46%.
At the bottom of the ranking we find Chile, with a tax wedge of 7%. The average of the OECD area is down by 0.39% to 34.6%
Returning to Italy, the cost of labor in Italy is approximately 49,000 thousand euros for each individual worker, above the OECD average (almost 45,000 thousand euros), al nineteenth place among the most advanced countries.
The report also shows that in Italy the average gross wage is over 37 thousand euros (€ 37,178), below the OECD average of 39.188 euro.
Furthermore, Italian gross wages are taxed at 29% against 24.9% of the OECD average. In 2020 alone, the cost of labor in Italy stood at 48.919 euro per year for each single worker without children, taking into account income taxes and contributions from businesses and workers. This is the nineteenth highest labor cost among the 34 countries of the OECD area.
Furthermore, in Italy the greatest weight of the cost of labor is on the shoulders of the companies, whose contributions they represent 24% of the total, while workers’ contributions account for 7.2% and income tax for 14.8%.
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