New data released by the Organisation for Economic Co-operation and Development’s (OECD) has revealed that Australian workers were hit by the largest tax rate increase in the developed world last year.
In Australia, social security payments are not paid by the employee. Instead, social security is paid for entirely out of income tax.
But some countries have a high income tax rate, and social security payment on top of that.
Here’s a look at how the income of the average worker in other developed countries is paid into tax and socialsecurity.
2 of 16Attribution: Getty Images/iStockphoto
South Korea
At the low end of the spectrum, South Koreans pay 16.2 per cent of their wages back to the government through tax or social security. 9.4 per cent of the payments go to social security payments alone, leaving the average income tax rate at just 6.8 per cent of earnings.
3 of 16Attribution: Getty
Japan
In Japan, the average worker pays around 22.6 per cent of their income in tax and social security contributions. They have a relatively higher rate of social security contributions, paying 14 per cent of their income there, compared to 7.9 per cent in income tax.
4 of 16Attribution: AP
United Kingdom
The United Kingdom’s average worker will pay 23.7 per cent of their income in tax and social security, just a touch under Australia.
5 of 16Attribution: AP Photo/Ted Shaffrey
United States
The US worker, on average, pays just shy of a quarter in their income to tax and social security, at 24.2 per cent. Only 7.7 per cent of the average worker’s salary is paid in social security.
6 of 16Attribution: The Age / Joe Armao
Australia
While Australia was lumped with a large tax increase last year, it is far from the highest overall country for payment when combining tax and social security.
24.9 per cent of the average Australian wage is paid in income tax.
Counting just income tax, Australia would have the fourth highest average income tax.
However, most other developed countries take more of their citizen’s wages back, as Australia does not pay a separate social security contribution – the entire sum is taken in income tax.
