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Single NZ workers paying less tax: OECD

NZ Newswire logoNZ Newswire 11/04/2017

Single, childless workers in New Zealand are surrendering much less of their wages to the state than their counterparts in Australia and the United Kingdom, according to the OECD.

The organisation's calculations of the "tax wedge" for its 35 members were released on Wednesday (NZT).

The percentage came in at 54 for Belgium, 49.4 for Germany, 48.2 for Hungary and 48.1 for France.

However, workers in Chile, New Zealand and Mexico surrendered the lowest proportion of their wages to the state.

Chileans paid at least 7 per cent, followed by New Zealanders at 17.9 per cent and Mexicans at 20.1 per cent.

Australians paid 28.6 per cent and those in the UK 30.8 per cent.

Taxes on labour income for the average worker across the OECD continued to decrease for the third consecutive year during 2016, dropping to 36 per cent of labour costs.

"The decrease in the average tax wedge seen since 2013 is partly explained by reforms in some countries to reduce taxes on labour income," the reports authors said, citing Belgium and Austria as countries that both experienced significant reductions in their tax wedges in 2016 as a result.

Only Greece saw an increase of more than one percentage point in the tax wedge.

The 1.06 percentage point increase was driven by an increase in both personal income tax and social security contributions.

Established in 1961, the Organisation for Economic Cooperation and Development seeks to promote policies that improve the economic and social well-being of people in its 35 member countries.

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