The OECD's annual publication “Taxing Wages” says that the average tax and social security burden on employment income has increased in 26 out of 34 OECD countries in 2011.

Taxpayers in Ireland, Luxembourg, Portugal and the Slovak Republic were among those hit with the largest increases while taxpayers in New Zealand and the United States saw their tax burden fall.

The tax burden is measured by the ‘tax wedge as a percentage of total labour costs’ or the total taxes paid by employees and employers, minus family benefits received, divided by the total labour costs of the employer. “Taxing Wages” also breaks down the tax burden between personal income taxes, including tax credits, and employee and employer Social Security Contributions.

The average overall ‘tax wedge’ for those earning the average wage increased by 0.3 percentage points between 2010 and 2011. Of the 26 countries where the tax wedge rose, the personal income taxes wedge also rose in 18 countries, most notably in Ireland (+3.8 percentage points), Hungary (+2.4 percentage points) and Portugal (+1.4 percentage points).

Falls in the overall tax burden were also primarily due to personal income taxes changes, with the largest decrease taking place in New Zealand where the tax wedge fell by 1.1 percentage points due to changes in the income tax rates in 2011.

In twelve OECD countries including Ireland, the income tax burden faced by a one-earner married couple with two children is less than half that faced by a single individual. In contrast, there is no difference in six countries-Chile, Finland, Israel, Mexico, New Zealand and Sweden.

For full details of the OECD's ‘Taxing Wages’ see http://www.oecd.org/document/8/0,3746,en_21571361_44315115_50165640_1_1_1_1,00.html