Greece is one of the OECD countries with the highest tax burden on labour income for families with children. Compared to the OECD average, the average tax wedge (average income taxes plus employee and employer social security contributions minus cash transfers as a percentage of total labour costs) is particularly high for lone parents with 2 children at 67% of the average wage and for married couples with children. For single taxpayers either at low, average or high earnings, the tax wedge is closer but remains about 4 to 5 percentage points above the OECD average.

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In 2009, the overall tax burden has not changed except for single taxpayers and lone parents with 2 children earning 67% of the average wage. For both family types, the tax wedge increased with about 0.6 percentage points. Single taxpayers earning 67% of the tax wedge without children faced a tax wedge of 36.8% of the total cost to the employer of employing that person (total labour costs). The tax wedge for lone parents with 2 children at 67% of the average wage was 36%. Single taxpayers with average earnings paid 41.5% while the tax wedge for one-earner married couples with 2 children at average earnings equalled 41.7%.

The tax wedge in Taxing Wages is calculated on the basis of the average gross wage earnings of full-time employees in the private sector (including employees at management level). The corresponding 2009 annual average gross wage in Greece was EUR 25,145.

More Information

A detailed description of the Greek tax system and the calculations for the tax wedge in Greece is included in the Taxing Wages Report.

Θεοφάνης Γιώτης / Theofanis Giotis
Theofanis.Giotis@12pm.biz