Rome, 26 April 2024 – Pay slips a little richer for workers with families, taxes always very heavy for singles. The tax wedge cut confirmed for the whole of 2024 by the government (with the aim of making it structural) has moved Italy’s position by only a few decimals in the unenviable OECD ranking of countries where the difference between the salary pocketed and that actually paid by companies is higher. On average, the tax wedge was 34.8% in 2023, compared to 34.7 the previous year.
Fiscal wedge, Italy still suffers
But in Italy, for a single worker, the burden of overall payroll taxes has remained at 45.1%substantially stable compared to 2022 (it was 45%). The average rate in OECD countries – body led by Mathias Cormann – stands at 34.8% (34.7% in 2022) e Italy is in fifth place for the highest incidence among the 38 countries of the Parisian organization, after Belgium (52.7%), Germany (47.9%), Austria (47.2%) and France (46.8%). Among the other big Western players, the United Kingdom drops to 31.3% (-0.3) and the USA to 29.9% (-0.5%). Switzerland stops at 23.5% and the Netherlands drops by 0.7% to 35.1%. In our country, It is above all taxes and social security contributions that make the difference, which represent 90% of the tax wedge, compared to an average of 77%. Things are better for a married worker with two children.
In this case, Italy drops to eighth place in the ranking, with a wedge of 33.2% against the average of 25.7%. Yet, something has also moved in our country since between 2000 and 2023 the tax wedge for the single worker fell by 2 percentage points (from 47.1 to 45.1%), while in the same period, in OECD countries, it fell by 1.4 percentage points (from 36.2 to 34.8%). But it was a sufficient pace to recover places in the standings. The combined effect of the increase in taxes and that of inflation has effectively reduced the purchasing power of workers. Average wages increased in nominal terms in 37 countries, but decreased in real terms in 18 countries, including Italy.
In the case of the Peninsula, the overall value of the wedge is obtained by adding 16.8% of income taxes (OECD average 13.3%), 4.3% of contributions paid by the worker (8.1% OECD) and 24 % of contributions paid by the employer (13.4% OECD).
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